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Meta has closed at least three of its XR studios, and seems to have also drastically reduced its budget for third-party Quest content too, reportedly including a now-cancelled Harry Potter VR title.

The News

In his latest video, YouTuber ‘Gamertag VR’ maintains Skydance Games, the makers of Skydance’s Behemoth (2024), was working on an official Harry Potter title set to be exclusive to Quest. At least, that was before Meta ostensibly pulled funding to a number of third-party studios earlier this week.

Skydance hasn’t publicly announced work on the game, however Gamertag cites a “very reliable source” that a Harry Potter VR title was indeed in the making before Meta pulled the plug. We’ve reached out to Skydance and will update this piece when/if we hear back.

You can see Gamertag’s video below:

Additionally, Gamertag maintains that the recent Cloudhead Games layoffs, which affected 70 percent of the veteran XR studio, also came as a direct result of Meta pulling funding.

Cloudhead Games, the studio behind rhythm shooter Pistol Whip (2019), announced in 2024 it was working on two new games, the status of which is still under wraps.

It’s said Meta had already invested $60 million meant to fund new exclusive content for Quest this year.

My Take

In a vacuum, pulling funding from a single massively recognizable title like Harry Potter is worrying. But cutting what appears to be most, if not all of its gaming efforts signals a much bigger shift in the landscape. Meta is doubling down on smart glasses and AI, while VR and its metaverse ambitions are taking a back seat—and everyone is still digesting that, yours truly included.

While Meta reportedly axed 10 percent of Reality Labs in the process, the company even seems to be counting their XR pennies in a way we simply haven’t seen. XR hardware analyst Brad Lynch claims Meta layoffs also affected “some individuals who were running Meta’s Horizon Start Program,” which is tasked with funding independent XR developers—a tool the company used over the years to not only seed goodwill in the dev community, but amplify content that may not have existed without the expectation of platform exclusivity.

As for the veracity of Gamertag’s report: we’re only a year away from the release of the new Harry Potter HBO series, set to kick off in 2027. It makes sense to me that the IP would be everywhere in effort to maximize eyeballs, making an official Quest title a pretty logical extension to the forthcoming attempt at rekindling Potter Mania.

And I can’t think of any other studio with deeper ties to traditional media than Skydance Games, which also developed The Walking Dead: Saints & Sinners VR franchise. Notably, Skydance Games’ parent company is Paramount Skydance—the result of a merger last year between Paramount Global, National Amusements, and Skydance Media.

That said, I expect to hear more in the coming days from insider sources, which of course we’ll be reporting on here, so check back soon.

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