The past few days have been pretty complicated for our XR ecosystem. In this newsletter episode, of course, I’ll talk a lot about the negative situation at Meta, but I’ll also leave space to other pieces of news… and some of them are actually pretty positive. So here you are, the most interesting XR news of the past week!
Top news of the week
(Image by Meta)
Meta disinvests in VR and Horizon Worlds
In the end, Meta did what a report teased in December. What was downplayed by the company as “just budgets moving from VR&metaverse to the smartglasses division” was actually a bloodbath. In short, this is what happened:
- Meta laid off around 10% of its Reality Labs staff: we are talking about around 1500 people affected
- Budgets have been moved from the VR & Horizon Worlds divisions to smartglasses
- Meta shut down its internal game studios like Armature Games, Twisted Pixels, and Sanzaru Games. It also performed layoffs in the studio behind Supernatural
- Meta canceled the sequel to Batman: Arkham Shadow, an unannounced Harry Potter game, and stopped all updates to Supernatural
- Meta put its enterprise program on life support and discontinued Horizon Workrooms. The good news is that for the time being, if you want to use Quest for business, the monthly fee has been removed
- The 3rd party headsets that should have been made with ASUS and Lenovo have been canceled
- It is also rumored that a big chunk of the third-party developer funding to develop VR games has been cut out
I have already written a long editorial about what I think of this situation, and you can read it from the links below. In short, I think that in the short term, this is a disaster: many people lost their jobs, and many studios won’t have the funding from Meta they were expecting, and will lay off people, too. Also, the news is spreading around, and this will create a lot of negativity in the VR space, which will translate into less trust in XR companies from investors. There will be a lot of negative ripple effects of this news. I think because of this, we are entering into a VR winter.
The outlook of XR is still positive, though: Meta is not abandoning XR, and is even doubling down its investment in smartglasses. This year, we are still going to see the consumer Snap Spectacles and the Steam Frame. And probably Meta being less aggressive on the market will give the opportunity to smaller companies to shine. The last VR winter was when we realized PCVR couldn’t enter the mainstream, and finished when the Quest came out. Probably in this case, we are just waiting for a new generation of devices, too. So, tomorrow things will be better. But today, they are really bad.
(And just to try to be helpful to all the people laid off, I’m sharing in the links also a few open job positions in XR)
More info (My editorial on the situation)
More info (Meta laid off 10% of its Reality Labs staff)
More info (Meta closed its game studios)
More info (Batman Arkham Shadow sequel canceled)
More info (Harry Potter VR game canceled)
More info (Supernatural won’t get new updates)
More info (Meta shuts down Workrooms — Road To VR)
More info (Meta shuts down Workrooms — Upload VR)
More info (Meta put its enterprise program on life support)
More info (A better explanation of what happened to Meta Quest enterprise program)
More info (Palmer Luckey commenting the news with positivity)
More info (Cix Liv commenting the news with anger)
More info (Open job positions at DeoVR)
More info (Open job positions at Google)
More info (Open job position at Apple)
Other relevant news
(Image by Ray-Ban)
Meta is considering doubling or tripling the production of smartglasses
I told you that Meta is moving some budget from VR to smartglasses, and in fact, Meta is doubling down its investment in smartglasses. The Meta Ray-Ban devices are selling incredibly well in all their variants, and so Meta is talking with EssilorLuxottica about increasing the production of these devices by a 2x or even 3x factor.
The numbers we are talking about are pretty big for our sector. Luxottica was already planning to produce 10 million units this year, but the two companies are talking about increasing the production to 20 million, or even 30 million if the demand justifies it. Just for comparison, the Quest 2, which has been the most successful VR device ever, has sold around 25M units in all its lifetime according to the estimates. Here we are talking about replicating the same number in just one year.
As I’ve told you, it is pretty impressive: if smartglasses start selling this much, it means they really enter mainstream adoption. But before celebrating it, let’s see if these numbers are actually becoming true. And let’s also see how much people will use the “smart” functionalities: if these glasses are just used as standard glasses, this is pretty useless for us. In any case, this is pretty good news.
XREAL has become a unicorn
Chinese manufacturer XREAL has announced to have just raised a new round of investment: we are talking about $100M coming from “supply chain partners” and other undisclosed backers. Thanks to more than $400M raised in its lifetime and its success in the XR space, now the company is valued at more than $1B. We can so say it has become a “Unicorn”.
It is good to read about success stories in our space. And I would say the success is well deserved, since XREAL has always been able to release interesting devices, and I’m personally intrigued by the Project Aura glasses that are coming this year. I hope that this success continues also in the upcoming years.
Lynx will reveal its headset on Wednesday
Tomorrow, the French startup Lynx will reveal its new headset, the Lynx R2. It is still going to be a lightweight mixed reality headset, and the company promises that it will be much better than the first unit because they have all learned from the many mistakes that happened with the previous device. The CEO Stan Larroque has also shared some teaser pictures about it.
I wish Lynx the best of luck: it is the most important startup doing standalone headsets in Europe, and Stan and all his team are great guys. I hope tomorrow’s launch will be a success.
More info (Teaser picture of the headset)
More info (Link to full reveal livestream)
News worth a mention
(Image by Another Axiom)
Gorilla Tag set its record of concurrent users
According to Another Axiom, more than 110,000 people were in Gorilla Tag to witness a live event that had been teased for some time. And in general, more than 1 million unique users accessed Gorilla Tag in headset from Friday to Sunday. This is a record for the very successful game, and it has been possible because this event has been prepared for many weeks. Compliments to the team for this result!
PCVR people are mostly playing old games
Steam revealed the most-played PC VR games of 2025. We don’t know the exact numbers, we only know the tiers they are in: Platinum, Gold, Silver, Bronze. These are the Platinum games, courtesy of Road To VR:
- No Man’s Sky (2016)
- Beat Saber (2019)
- Hot Dogs, Horseshoes & Hand Grenades (2016)
- The Elder Scrolls V: Skyrim VR (2018)
- Phasmophobia (2020)
- Gorilla Tag (2023)
- Blade & Sorcery (2024)
- Ark: Survival Evolved (2017)
- Vtol VR (2017)
- VRChat (2017)
- Half-Life: Alyx (2020)
- Assetto Corsa (2014)
As you can see, no game is from 2025, and most games are from 2020 or even before. In the whole classification, only VR Secretary: Ailey Edition is a game from 2025, and it belongs to the Silver tier. This shows that there is a lack of good content in PCVR, and many people are still having fun with old, good games.
Some news about content
- Fun Train is removing Tarzan from the stores because renewing the IP is not financially viable
- “Plonk! A 4D Puzzle” is a game where the user completes animated puzzles, and it looks good from a Reddit video
- Luke Ross’s Cyberpunk 2077 VR mod has been taken down after CD PROJEKT RED issued a DMCA notice.
More info (Tarzan)
More info (Plonk! A 4D Puzzle)
More info (Cyberpunk 2077)
Some reviews about content
- Knights of Fiona looks like an interesting RPG
- Stellar Cafe shows an interesting use of AI characters to make a game
More info (Knights Of Fiona)
More info (Stellar Cafe)
Other news
Apple’s open-source on-device AI model can instantly turn images into scenes
Merge Labs is a new BCI startup with the long-term mission of bridging biological and artificial intelligence
XREAL sued Viture for patent infringement
Road To VR’s Ben Lang wrote an interesting piece with his review of 2025 in XR and some predictions for 2026
Teslasuit launches XR5 suit for enterprise, priced at $10,000
News from partners (and friends)
No news from partners this week… so I just wish you again happy 2026!
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Some XR fun
Some jokes about the current situation with Meta
Funny link / 1
Funny link / 2
Funny link / 3
Me trying to make a game for kids on Quest
Funny link
I wonder if it is compatible with OpenXR…
Funny link
Donate for good
Like last week, also this week in this final paragraph I won’t ask you to donate to my blog, but to the poor people who are facing the consequences of the war. Please donate to the Red Cross to handle the current humanitarian situation in Ukraine. I will leave you the link to do that below.
Let me take a moment before to thank anyway all my Patreon donors for the support they give to me:
- Alex Gonzalez VR
- DeoVR
- GenVR
- Eduardo Siman
- Jonn Fredericks
- Jean-Marc Duyckaerts
- Reynaldo T Zabala
- Richard Penny
- Terry xR. Schussler
- Ilias Kapouranis
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- Immersive.international
- Nikk Mitchell and the great FXG team
- Jake Rubin
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- Marco “BeyondTheCastle” Arena
- Eloi Gerard
- Adam Boyd
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- Lynn Eades
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- Casie Lane
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- Qcreator
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- Sb
- Boule Petanque
- Pieter Siekerman
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- Vooiage Technologies
- Caroline
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- Alan Smithson
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- Tiago Silva
- Matt Cool
- Mark G
- Simplex
- Gregory F Gorsuch
- Paul Shay
- Matias Nassi
And now here you are the link to donate:
Support The Red Cross in Ukraine
(Header image by Meta)
The post The XR Week Peek (2026.01.20): Meta performs layoffs in VR but doubles down on smartglasses, and more! appeared first on The Ghost Howls.
This is a companion discussion topic for the original entry at https://skarredghost.com/2026/01/20/meta-layoffs-metaverse-smartglasses/