Meta’s enormous bet on virtual reality ended this week with the company reportedly laying off roughly 1,500 employees from its Reality Labs division — about 10% of the unit’s staff — and shutting down several VR game studios, according to The Wall Street Journal. It’s a huge reversal for a company that, just four years ago, staked its entire identity on the concept.
Few are going to miss it.
As industry watchers might remember, Facebook rebranded itself as Meta in 2021, promising to usher in a new era of technology led by VR devices.
In part, the decision was a bet on Gen Z’s preference to socialize in online games like Fortnite and Roblox as opposed to traditional social media apps. The change also helped Meta distance itself from the negativity surrounding its Facebook brand. Over the years, the brand had been damaged by data privacy scandals like Cambridge Analytica; reports from Facebook whistleblower Frances Haugen, who shared documents indicating Facebook knew of its negative impacts on children and teens; Congressional hearings over Facebook’s digital surveillance; its role in the spread of misinformation; its monopolistic practices, and more.
Meta’s vision at the time was that the metaverse would be the next big social platform, where users connected in a virtual world via Meta’s Horizon Worlds app and played games on their VR headsets.
Fast-forward, and the metaverse has effectively been abandoned in favor of AI.
According to CNBC, some of the casualties include studios making VR titles inside Meta, like Armature Studio (“Resident Evil 4 VR“), Twisted Pixel (“Marvel’s Deadpool VR“), and Sanzaru (“Asgard’s Wrath). Meanwhile, the VR fitness app Supernatural, which Meta acquired in 2023 for $400 million, will no longer produce new content and will move into “maintenance mode.” Camouflaj, the studio behind the “Batman: Arkham Shadow” VR game, has also been impacted by layoffs, as reported by GeekWire.
And this week, The Verge noted that Meta’s program to bring VR to work, Workrooms, is shutting down, as well.
The news follows an earlier Bloomberg report from December, which said that Meta was slashing the virtual reality department’s budget by up to 30%. Around the same time, Meta announced that it was pausing its program to share its Meta Horizon operating system, which runs on its Quest-branded VR headsets, with other third-party headset device makers.
Unlike the news of Meta’s rebrand, the deprioritization of the company’s metaverse efforts should come as no surprise — the division lost money at an excessive rate, worrying investors, and had never turned a profit.
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