Meta Closes Twisted Pixel, Armature & Sanzaru Games

Meta shut down Twisted Pixel Games (Deadpool VR), Sanzaru Games (Asgard’s Wrath), and Armature Studio (Resident Evil 4 VR).

The New York Times reported earlier that Meta is laying off more than 10% of its Reality Labs division, specifically targeting teams working on VR and Horizon Worlds.

Now, UploadVR can confirm that these layoffs are being conducted today, and we’ve seen a document indicating the entirety of three of Meta’s acquired VR games studios are affected: Twisted Pixel Games, Sanzaru Games, and Armature.

Twisted Pixel Games

Twisted Pixel Games was founded in 2006 and mostly made Xbox games published by Microsoft for the first decade of its existence. In fact, Microsoft owned the studio from 2011 until 2015, when it became an independent company again.

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On contract from Facebook, between 2017 and 2019 Twisted Pixel released four VR games:

  • Wilson’s Heart (Rift): a 2017 black & white psychological horror game with voice acting from Peter Weller, Alfred Molina, Rosario Dawson, and Michael B. Jordan.
  • B-Team (Go/Quest): a 2018 collection of minigames, including a running game where you avoid obstacles and a wave shooter, ported to Quest in 2020.
  • Defector (Rift): a 2019 action-packed spy thriller reminiscent of Mission: Impossible.
  • Path of the Warrior (Rift/Quest): a 2019 brawler, essentially a first-person VR take on games like Streets of Rage, Final Fight, or Double Dragon.

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In 2022, Twisted Pixel Games was acquired by Meta. And just two months ago, it released what it had been working on since then: Deadpool VR, the latest Quest-exclusive VR game.

That Meta is shutting down the studio already strongly suggests the $50 exclusive did not sell as well as the company had hoped, or that it didn’t spur enough new Quest headset sales, the real purpose of Meta’s high-budget content.

Sanzaru Games

Sanzaru Games was also founded in 2006, and made a combination of its own games and contract titles for companies such as Sony, porting the original God of War series to PS Vita.

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Sanzaru Games was also contracted by Facebook to build VR games for the Oculus Rift and its Touch controllers, between 2016 and 2019:

  • Ripcoil (2016): a launch title for the Oculus Touch controllers that was essentially an active VR take on Pong, where you leaned your body to catch and throw a cybernetic frisbee.
  • VR Sports Challenge (2016): another Oculus Touch launch title that featured football, basketball, hockey, and baseball, hoping to be the Wii Sports of early PC VR.
  • Marvel Powers United VR (2018): Facebook’s 2018 blockbuster title for Rift+Touch, featuring 18 playable Marvel superheroes and online multiplayer co-op. Meta shut down the game in 2020, and while a fan project brought back singleplayer in 2024, Meta got it taken down.
  • Asgard’s Wrath (2019): one of the meatiest made-for-VR games of all time, Facebook’s 2019 Rift exclusive and Oculus Link launch title, an action-adventure RPG with over 30 hours of gameplay.

In 2020, Sanzaru Games was acquired by Facebook, and in 2023 released Asgard’s Wrath 2, taking the core essence of Asgard’s Wrath to Quest 2 and Quest 3 standalone, with a semi-open world and a campaign more than 60 hours long.

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Exactly one year ago, Sanzaru released the last major content update for Asgard’s Wrath 2, stating that it was now working on the “next big thing” with no detail released on what that would be before the studio closed.

Armature Studio

Founded in 2008, Armature Studio was mainly a porting studio, bringing PC titles to consoles and console titles to PS Vita.

Like Twisted Pixel and Sanzaru, Armature too was contracted by Facebook to build early consumer VR games:

  • Fail Factory (2017): a whimsical puzzle game for the Samsung Gear VR where you complete tasks in a cartoon robot factory. It was later ported to Oculus Go, Rift, and Quest.
  • Sports Scramble (2019): a launch title for the Oculus Quest and yet another hopeful “Wii Sports of VR”, it included tennis, bowling, and baseball.
  • Resident Evil 4 VR (2021): By far Armature’s most significant VR project was porting Resident Evil 4 to Quest 2, one of the first major traditional games to arrive on standalone headsets.

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Armature was acquired by Meta in 2022, and many VR gamers had been eagerly anticipating what it had been working on since. Whatever it was, Armature too is now shut down.

Camouflaj & Others Continue

These are not the first acquired VR game studios Meta has eliminated.

In 2024, the company shut down Lone Echo and Echo Arena creator Ready At Dawn. And last year it merged Onward developer Downpour Interactive into Camouflaj, the developer of Batman: Arkham Shadow, after ceasing development of the VR shooter.

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According to the documents UploadVR saw, four studios still remain active at Meta:

Beat Saber and Population: One are live service games, and there’s no indication of a sequel arriving for either. For Camouflaj, four months ago the voice actor for Commissioner Gordon confirmed that a Batman: Arkham Shadow sequel was about to enter development. It’s unclear whether this is still happening, though UploadVR can confirm that Camouflaj is not on the shutdown list.

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The closure of three studios is part of a wider strategy shift at Meta seeing funding from VR reallocated toward smart glasses, a reaction to the sales momentum the company saw last year for each type of device.

Through at least the first three quarters of the year, Quest headset sales were down compared to 2024. Meanwhile, sales of Ray-Ban Meta glasses skyrocketed, with several variants selling as fast as they can be manufactured.

Last month, Meta officially confirmed “shifting some of our investment from Metaverse toward AI glasses and Wearables”, and the closures of Twisted Pixel, Sanzaru, and Armature are some of the first casualties of this shift.

Meta Reportedly Laying Off More Than 10% Of Reality Labs

Meta is laying off more than 10% of its Reality Labs division, specifically targeting VR and Horizon Worlds, The New York Times reports.

Reality Labs, if you’re unaware, is the division of Meta behind its Quest headsets, Horizon software, smart glasses, and sEMG wristband, as well as researching future technologies such as Codec Avatars and true AR glasses.

The New York Times estimates Reality Labs at roughly 15,000 staff, suggesting that more than 1500 could be losing their job.

Meta CTO Andrew Bosworth has scheduled an all-hands meeting for tomorrow, both the NYT and Business Insider claim, describing it as the “most important” of the year.

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The report comes just over a month after Meta officially confirmed “shifting some of our investment from Metaverse toward AI glasses and Wearables”, a statement which itself followed early reports of the cuts from The New York Times, The Wall Street Journal, and Business Insider.

“Within our overall Reality Labs portfolio we are shifting some of our investment from Metaverse toward AI glasses and Wearables given the momentum there,” last month’s statement read. “We aren’t planning any broader changes than that.”

With the layoffs reportedly taking place this week, we’ll bring you updates as we learn of Meta staff affected.

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Meta’s funding shift from Horizon Worlds and VR to smart glasses is happening just over a year after a leaked memo from Meta CTO Andrew Bosworth told Reality Labs staff that 2025 will determine whether their projects are “the work of visionaries or a legendary misadventure”.

In the memo, Bosworth described 2025 as “the most critical year in my 8 years at Reality Labs”, and told staff they “need to drive sales, retention, and engagement across the board but especially in MR”. Note that at the time, Meta was using MR to refer to VR too, a nomenclature that it ended earlier this year.

“And Horizon Worlds on mobile absolutely has to break out for our long term plans to have a chance”, Bosworth followed that sentence with.

Since then, Reality Labs saw its highest-ever quarterly revenue in Q4 2024 with the launch of Quest 3S, which was the top-selling console on Amazon US for Christmas. But this momentum did not carry through into 2025 at all.

The first two quarters of 2025 saw Quest sales decline year-over-year, revealing that while Quest 3S was a popular stocking stuffer, it simply is not a successful year-round product. While Q3 saw a rebound, Meta explained that this was due to retailers stocking up on Quest 3S for this year’s holiday season.

Meanwhile, Meta has continued to push its Horizon Worlds “metaverse” platform with multi-million-dollar creator competitions, especially focused on smartphone-only worlds, as the company hopes to scale the platform from a social VR space to a cross-platform Roblox and Fortnite competitor. But this doesn’t seem to have gained much traction.

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This relative stagnation in Meta’s Quest and Horizon Worlds effort is contrasted with skyrocketing sales and significant public and investor interest in its smart glasses.

In multiple earnings calls last year, Meta’s partner EssilorLuxottica said that the Ray-Ban Meta glasses were performing “exceptionally well”, with sales having more than tripled compared to 2024. Both companies have claimed to be selling many models as fast as they can make them.

Meta has also claimed “unprecedented demand” for its higher-end Meta Ray-Ban Display glasses, recently announcing a delay of its international expansion plans to catch up with US production.

Gorilla Tag & VRChat Set Usage Records In VR Headsets

Millions of people plan their weekends around a visit to virtual reality.

Solid total figures are hard to come by given the competitive nature of the immersive industry. A great many people are solo flying or driving in VR headsets, and spending time in single-player offline virtual worlds where they watch movies in virtual theaters, shoot at virtual gun ranges, bowl at virtual alleys, fish at virtual ponds, or play games in virtual apartments. In many cases, the designers of these digital spaces have zero interest in tracking the usage of the visitors to the spaces they’ve made.

Our systems for tracking and monetizing actions on the Internet and on Earth are alien to a generation learning to entertain themselves distributing spaces online to anyone who might wish to exit reality for half a day of headset sim and chill. For all intents and purposes, these people are pretty much just packing up in reality after the week is done with them and setting off for parts unknown in VR with the freedom of the weekend.

When it comes to going online and interacting with others, some of the most popular destinations in headset, like VRChat and Rec Room, also have flat-screen editions that make it difficult to cut out a singular figure on how many people are wearing a VR headset and being transported at any given moment. And in some of these places, where the servers need to scale constantly to accommodate fluid interactions delivered everywhere, there’s a constant flow of people arriving and departing in and out of headsets.

On New Year’s Eve, nearly 150,000 people spent the holiday in VRChat worlds, a majority of them in headset while setting a concurrent user record as the calendar changed from 2025 to 2026 across the United States. Then, last Saturday January 10, 2026 at 10 a.m. Pacific, Another Axiom’s planet of apes received an off-world visitor and broke their own record too.

The moment when around 110K people logged in simultaneously in Gorilla Tag.

The alien’s arrival in Gorilla Tag was preceded by a long build-up of lore that kicked off with the sighting of a green dot visible to everyone in the sky. According to Another Axiom, more than 110,000 people put on their headsets at the same time to witness the green comet collide with the planet, a moment executed as a once-in-a-lifetime live event hosted exclusively in virtual reality. More than 1 million unique users accessed Gorilla Tag in headset from Friday to Sunday, according to Another Axiom.

“Live Events are the modern version of Must See TV,” wrote Jake Zim, Another Axiom Chief Marketing Officer.

Virtual worlds are becoming important and reliable destinations for the adults and teens up at midnight partying like it’s 2050 in VRChat, and kids gathering a few weeks later to witness a comet in Gorilla Tag as well as countless more dipping in and out of other virtual worlds. As Meta shifts its hiring focus again and institutes another round of layoffs this week, I’ve put together this piece in hopes of shifting the broader narrative.

These narratives should probably acknowledge some things about VR.

VR Is Science & The Metaverse Is Fiction

VR was around as an idea with “presence” and its relationship to focus studied as a concept for years by researchers before Mark Zuckerberg started Facebook. To put a finer point on it, the metaverse is science fiction and virtual reality is studied in science.

Author Neal Stephenson wrote of the metaverse in Snow Crash while William Gibson wrote of the cyberdeck in Neuromancer and both are impactful works of science fiction today. Meanwhile, in actual real world VR headsets, researchers recently worked out the user interface that would let robots make actual deliveries to a person in headset without disturbing them from their virtual environment.

If VRChat and Gorilla Tag were cities, or public venues, then virtual reality in 2026 is already regularly accommodating roughly 100,000 people per place at one time. They’re not all in the same exact room in each locale, but the people who go to these places (usually on the weekend) experience a sense of togetherness something like what other generations in a different century felt spotting Hale-Bopp in the sky together, or singing karaoke and counting down to midnight in a happy room with friends.

“Gorilla Tag itself, and I think the VR ecosystem, is reliant on a low cost headset that is parent-trusted and kid-friendly and sold in the toy aisle,” Zim said over a voice call. “The health of the ecosystem is driven by the audience that is spending on the platform, and that audience is the younger audience, the Gorilla Tag audience.”

Last weekend, Apple broadcast a whole live Lakers game from some of the first Apple Immersive VR cameras bringing Vision Pro owners closer than courtside seats. Later this week in Walkabout, a new mini golf theme park will release representing the creative output of a couple dozen artistic souls who complete the full loop of VR as an engine of creation. They build courses together in headsets more like chefs in the kitchen than architects making blueprints, even if their output is still architecture.

Former Oculus CTO and technical adviser to Meta John Carmack once sat with a triple monitor setup behind him and explained to VR’s biggest believers what might be ahead for Meta’s next few years trying to brute force the creation of a metaverse:

“Setting out to build the metaverse is not actually the best way to wind up with the metaverse…the metaverse is a honeypot trap for architecture astronauts,” he warned. “Mark Zuckerberg has decided now is the time to build the metaverse….my worry is we could spend years and thousands of people possibly and wind up with things that didn’t contribute all that much to the ways that people are actually using the devices and hardware today…we need to concentrate on actual products rather than technology, architecture, or initiatives.”

Those interested in sharing anything relevant to VR usage can message 1-949-610-3857 or email ian@uploadvr.com.