Meta has closed Twisted Pixel Games, Sanzaru Games, and Armature Studio as part of layoffs in its Reality Labs division. The move supports a shift toward wearables and AI, reducing first-party VR development for Quest headsets. Developers confirmed the full shutdowns on social media.
On January 13, 2026, Meta announced the closure of three internal VR studios: Twisted Pixel Games, Sanzaru Games, and Armature Studio. This action is part of broader layoffs affecting Meta's Reality Labs, which oversees VR game development and employs around 15,000 people. The company aims to cut 10 to 15 percent of the division after reporting a $4 billion loss in the metaverse sector.
Meta's statement emphasized a pivot from the metaverse to wearables: “We said last month that we were shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.” A spokesperson confirmed the shutdowns to outlets like Bloomberg and Polygon, noting the focus on products like Ray-Ban Meta AI glasses.
Developers shared their experiences online. Senior designer Ray West posted on LinkedIn: “Welp. As many will hear soon, several Meta game studios were closed today, including Sanzaru. It was an amazing team of powerhouse talent, and I’m really glad to have gotten to know everyone there.” Another developer tweeted: “I’ve just been laid off. It appears the entire Twisted Pixel games studio has been shut down. Sanzaru Games, too.” Twisted Pixel VR gameplay designer Kathryn Yu wrote on Bluesky: “Unfortunately, I was part of the layoffs today at Meta, and will be seeking a new role.”
The studios had notable histories. Twisted Pixel, acquired in 2021, was known for Xbox titles like 'Splosion Man and recently released Marvel's Deadpool VR in November 2025. Sanzaru, bought in 2020, developed Asgard's Wrath in 2019 and its sequel, a free pack-in for the Meta Quest 3 in December 2023; it also worked on Sly Cooper spin-offs. Armature, founded by ex-Retro Studios staff and acquired in October 2022, ported games like ReCore and Resident Evil 4 to VR in 2021.
While Beat Games (Beat Saber) and Camouflaj (Batman: Arkham Shadow) remain operational, the closures significantly impact Meta's AAA VR capabilities as the leading player in the space.
