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nDreams, one of VR’s most senior game studios, announced plans to close two internal studios responsible for some of its most forward-thinking VR projects, which could also include a sizable number of layoffs.

While nDreams hasn’t officially shuttered Near Light or Compass at this point, the company says in a LinkenIn post that it could soon see a reduction of 78 roles across “all levels and multiple teams, including senior leadership.”

“Despite every effort to make our existing structure a success and avert this outcome, the VR games market remains challenging, making further changes necessary to ensure a commercially viable and sustainable future,” nDreams says.

nDreams spun up Elevation in 2022 to produce ‘AAA’ quality VR games. Elevation released its debut solo title Reach (2025) across all major VR headsets last year, making for a strong opening bid as the company’s remote-first studio.

That same year, nDreams acquired Near Light, a Brighton, UK-based studio known for virtual travel experience Perfect (2016) and single-player arcade shooter Shooty Fruity (2018). More recently, Near Light released PvP shooter Frenzies, which launched into early access in Quest in 2024.

In early 2025, nDreams opened internal an additional internal studio called ‘Compass’, which melded staff from both its nDreams Studio Orbital and nDreams Studio after a layoff round in late 2024 that affected 17.5% of the company.

Founded in 2013, nDreams has released a host of VR games over the years as both developer and publisher, including Phantom: Covert Ops (2020), Fracked (2021), Ghostbusters: Rise of the Ghost Lord (2023), and Vendetta Forever (2024).

This follows wider turmoil in the VR games industry, most recently precipitated by Meta’s reorganization of its Reality Labs XR division and rash of first-party studio closures, which included the shuttering of Armature Studio (Resident Evil 4 VR), Twisted Pixel (Deadpool VR), and Sanzaru Games (Asgard’s Wrath).

Here’s nDreams’ full statement below:

Our team was today informed of proposals to restructure nDreams, including a significant reduction in overall staffing levels. These changes would impact all levels and multiple teams, including senior leadership.

Since 2024, our staff have been divided across three internal studios: Elevation, Near Light, and Compass. At the core of the restructured business will be Elevation, which currently has around 120 staff engaged on unannounced projects. nDreams will also retain a lean group dedicated to XR R&D. Together, we will remain focused on delivering world-class VR and XR games.

Regrettably, the proposals include the closure of the Near Light and Compass studios, and a reduction in our Facilities, Talent, Shared Technology, and Executive teams, with 78 roles at risk of redundancy. Despite every effort to make our existing structure a success and avert this outcome, the VR games market remains challenging, making further changes necessary to ensure a commercially viable and sustainable future.

We’re committed to exploring every option to retain talent and will now enter a collective consultation process with the people impacted by these proposals. We recognise that this will be stressful and challenging for everyone affected and will be offering support throughout the process.