Meta has begun axing more than 1,000 roles in Reality Labs, and the fallout is hitting the teams that created some of the most well-known VR games.
Meta is also shifting money and attention away from the most expensive Metaverse bets and toward AI hardware and mobile-first experiences. If you own a Quest headset, this shift may mean fewer Prestige releases, longer wait times between new launches, and less clarity about what Meta will fund next. That’s a big change from when Meta looked at standout games as a reason to join its platform.
Reality Labs is still the umbrella for VR and mixed reality work, but there is an increasing demand to do more with less. The layoffs are another indication that Meta wants lower expenses and faster payouts.
The closures affect real games
The cuts aren’t just found in an organizational chart. Meta has shut down the studios behind Resident Evil 4 on Quest and Marvel’s Deadpool VR, a move that shows how quickly the company is scaling back internal game development.
Bloomberg reported that the layoffs at Reality Labs would eliminate 1,000 jobs as Meta reallocates its resources. Engadget also pointed to an internal memo from CTO Andrew Bosworth giving greater priority to wearables, including the AI-powered Ray-Ban smart glasses. All in all, it looks like Meta is reallocating its talent and budget to products that it believes can scale faster.
Why this is important for quest owners
When a platform owner downsizes their gaming teams, the impact will be reflected in your library. Fewer in-house studios typically mean fewer exclusive programs highlighting new hardware features and greater reliance on third-party developers who need a strong business case to stay in VR.
Money is the pressure point. Reality Labs has lost more than $70 billion since 2020 and still hasn’t posted a profit. These kinds of sustained losses make it harder to justify large, risky gaming budgets, even if the results are critically acclaimed.
Engadget also noted that there is no sequel to Quest 3 planned for Meta any time soon. This slows down the usual cycle in which new hardware and new games reinforce each other.
What to watch next
According to Meta, VR is still part of the plan, but VR gaming is no longer the focus. Expect more ports, updates, and smaller releases with fewer tentpole bets that require years of staff work.
What will be most noticeable will be how Meta talks about gaming in the context of its next hardware announcements. If the demos focus on AI features and utility rather than big new titles, you’ll know where the company sees next growth. Until then, buy new hardware for what you can play now, not what might arrive later.
