Meta shuts VR studios in a move that has stunned developers, investors, and long-time followers of the company’s virtual reality ambitions. VR internal games once an integral part of Meta’s digital universe, are now being shut down. May of the VR game studies are closing shop and employees being laid off. It seems Meta is trying to curb the losses and cutting cost and working on products that can give immediate growth. Around 10% of employees have been laid off in its Reality Labs division.
The reality Labs division was responsible for virtual and augmented reality products. Meta has shut down many virtual reality game studios as per the report. Meta Reality Labs has been a loss leader for the company for quite some time, regularly losing around $4 billion per quarter for several years
A Shift in Strategy
The Reality Labs shutdown of multiple internal studios highlights a clear shift in Meta’s long-term thinking. Reality Labs was established to drive innovation in VR and AR; however, the division has also been responsible for significant financial losses year after year. Cutting studios is Meta’s way of slowing the cash burn while reassessing what role immersive technology should play in its future.
Why Meta shutting VR
As per the company’s spokesperson Tracy Clayton, the company was to divert some investment from metaverse toward wearables. Meta is planning to reinvest whatever it saved from the VR division to support wearables growth.
Meta is going to use the savings made from the closure of Reality Labs toward mobile experiences, wearable devices, and AI. Except for some related tools, the compete VR workspaces are being phased out. For example, Meta Quest Remote Desktop with continue with operation allowing basic PC access through Quest headsets.
Other studios shutting down
Meta is going to shut down Twisted Pixel, Armature Studio, and Sanzaru Games.
Twisted Pixel: Responsible for Deadpool VR
Armature: Created Resident Evil 4 VR
Sanzaru: Worked on Asgard’s Wrath.
Meta VR Pivot Smart Glasses Take Center Stage
As Meta shuts VR studios, the company’s attention is clearly moving toward a Meta VR pivot smart glasses strategy. Meta is now shifting its attention towards tangible hardware. Meta and EssilorLuxottica, its manufacturing partner and trying to figure out a way to double the production of their AI smart glasses to more than 20M by this yearend. This again reiterates Meta’s wish to go all out on production. Focus for Meta is to extend the AI strategy into hardware it controls end-to-end, they by gradually reducing the reliance on rival’s smartphones
Meta VR Wearables Shift and the Rise of AI Devices
The broader Meta VR wearables shift goes beyond glasses alone. Meta’s strategic plan is to pivot from being a entertainment device to becoming a AI-powered wearable. this clearly shows Meta’s desire to tap into the growth seen in the wearable market. As per the analysts, this shift could be beneficial to Meta as there is a ever growing demand for the wearables. The Meta VR wearables shift shows a willingness to adapt, even if it means abandoning earlier dreams of a fully virtual world.
What This Means for Meta’s Future
Meta wants to sustain and that is the major reason for it to shut down its VR studios. The Reality Labs shutdown and layoffs are painful, but they free resources for new bets.
Meta wants to focus on the smart glasses as it wants to catch the AI wearables wave as there is tremendous scope for growth. The company’s future may no longer be fully virtual, but it is clearly wearable and powered by AI.
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