Meta has canceled the Batman: Arkham Shadow sequel, UploadVR has learned, and conducted significant layoffs at Camouflaj, the developer of the first game.
Unlike Twisted Pixel Games (Deadpool VR), Sanzaru Games (Asgard's Wrath), and Armature Studio (Resident Evil 4 VR), Camouflaj has not been entirely shut down. But it has seen significant layoffs, and will no longer be developing VR games.
Further, UploadVR can confirm that Sanzaru was working on the Arkham Shadow sequel, and the studio's closure earlier this week ended this work.
David Heaney
Batman: Arkham Shadow was the blockbuster bundled title for Quest 3S, given for free with new headset purchases for well over a year, and we strongly praised it in our review.
In 2024, the founder and studio head of Camouflaj, Ryan Payton, told UploadVR that he would "love to" make a sequel. Then, four months ago, the voice actor for Commissioner Gordon confirmed that a sequel was about to enter development.
Work on that sequel had started – at Sanzaru Games rather than Camouflaj – but has now fully ended, and the sequel will no longer be happening.
David Heaney
Taking into account the Camouflaj layoffs, we can now confirm that only three game studios still remain meaningfully active at Meta:
- Beat Games (Beat Saber)
- BigBox (Population: One)
- Ouro Interactive (Super Rumble, Super Strike)
Beat Saber and Population: One are live service games, and there's no indication of a sequel arriving for either. Meanwhile, Ouro Interactive's focus remains entirely on Horizon Worlds.
The closure of three studios and significant layoffs at Camouflaj are part of a wider strategy shift at Meta, seeing funding from VR reallocated toward smart glasses, a reaction to the sales momentum the company saw last year for each type of device.
Through at least the first three quarters of the year, Quest headset sales were down compared to 2024. Meanwhile, sales of Ray-Ban Meta glasses skyrocketed, with several variants selling as fast as they can be manufactured. This week, Bloomberg reported that Meta was considering doubling or even tripling smart glasses production capacity.
Last month, Meta officially confirmed "shifting some of our investment from Metaverse toward AI glasses and Wearables", and the layoffs at its acquired studios are some of the first casualties of this shift.
