Meta is undergoing a significant restructuring in its Reality Labs division, laying off more than 1,000 employees, which represents approximately 10% of its workforce. According to an internal memo, these measures are part of an effort to make the division “more sustainable.” As the company changes its course, three virtual reality development studios will be closed: Armature Studios, Sanzaru Games, and Twisted Pixel, responsible for notable titles such as Resident Evil 4 VR and Asgard’s Wrath.
Forget about VR video games
The decision to reduce the focus on virtual reality and the metaverse has arisen after accumulating losses of approximately $50 billion between 2020 and 2024. Despite the massive investment, Meta has failed to produce a successful and widely used product in the market. Andrew Bosworth, CTO of Meta, had warned that the metaverse could become a “legendary misadventure” if Reality Labs did not recover soon. However, the future of the metaverse is now centered on mobile devices and wearables powered by artificial intelligence, far from fully immersive virtual reality headsets.
The company plans to reinvest the savings generated by these layoffs into the development of new wearable technologies, although this raises concerns about privacy and potential legal complications. The new devices could offer innovative features, but they also present a dilemma regarding their general acceptance and effectiveness in the market. With a starting price of $799 for certain devices, doubts are raised about their viability in an environment where consumer trust is at stake.
Meanwhile, Meta will continue to work on the metaverse, but with a more limited focus and at a slower pace in the development of VR headsets. Although the company is expected to explore new avenues, the path to consolidating its vision for the future seems to be fraught with obstacles.
