Meta has confirmed it is closing down three of its internal virtual reality (VR) studios, marking another major shift in its long-running bet on the metaverse. The decision affects teams working under Meta’s Reality Labs division and comes as the company continues to rein in costs. While Meta remains committed to VR and mixed reality, the move underscores a sharper focus on fewer, higher-impact projects.

Over the past few years, Meta has invested billions of dollars into Reality Labs, the division responsible for VR hardware, software, and metaverse experiences. Despite popular devices like the Quest headset lineup, the unit has faced sustained financial losses. Industry-wide, VR adoption has grown more slowly than early projections, prompting several tech companies to reassess content investments.

Meta stated that it is shutting down three VR-focused studios as part of an internal restructuring aimed at improving efficiency. Employees impacted by the closures are being offered opportunities to apply for other roles within the company. Meta emphasized that this is not an exit from VR but a recalibration of how resources are allocated across its product portfolio.

Executives have reiterated that flagship platforms such as Horizon Worlds and first-party VR experiences tied closely to Quest hardware remain strategic priorities.

VR studios within Meta typically develop immersive games or social experiences designed specifically for Quest headsets. Closing a studio does not mean the underlying technology is being abandoned; rather, it’s similar to a film studio cancelling certain productions while still investing in blockbuster franchises that promise broader reach.

For users, this could mean fewer experimental VR titles but potentially better-polished flagship experiences. For the industry, Meta’s move highlights the ongoing challenge of balancing innovation with commercial viability in immersive tech. Developers and investors may see this as a signal that VR is entering a more disciplined, sustainability-focused phase.

Critics argue that repeated restructurings could slow creative experimentation in VR, a space that still relies on bold ideas to attract mainstream users. There are also concerns about employee morale and the long-term impact on Meta’s content ecosystem if fewer in-house studios are active.

Meta is expected to continue prioritizing mixed reality, AI integration, and hardware innovation, especially as competition intensifies from other major tech players. Future investments are likely to focus on scalable platforms and partnerships rather than maintaining a large number of internal content studios.

The closure of three VR studios marks a pragmatic reset rather than a retreat for Meta. As the metaverse vision matures, the company appears intent on narrowing its focus to projects with clearer paths to impact—making this a development worth watching in the evolving VR landscape.