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Veteran VR developer and publisher nDreams announced it’s opened an internal studio, called ‘Compass’, after having closed both its nDreams Studio Orbital and nDreams Studio in September.

The studio announced back in September it had laid off 17.5% of the company in a response to “a challenging VR games market, situated within a tough gaming landscape more broadly.”

Now, Game Developer learns the restructuring includes the shuttering of nDreams Studio Orbital and nDreams Studio. Both its first-party nDreams Studio Elevation and Nearlight, which was acquired by nDreams in late 2022, are still operational.

An unspecified number of staff have been laid off as a result, with remaining staff now comprising Compass, which seeks to target the “growing audience of young VR natives.” The 40-person team is being led by Callum Godfrey, veteran of Activision, EA, King and Codemasters.

“This unfortunately meant closing nDreams Studio Orbital and meant that nDreams Studio could not continue in its current form,” the studio tells Game Developer. “Both teams did brilliant work and many people from those affected studios have been retained within nDreams’ new look structure, with several of those forming part of the new Compass studio.”

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), Frenzies (2024) and Vendetta Forever (2024).

This follows turbulence both in the XR games industry, which largely started in early 2024. Notable shutdowns include Meta’s Ready at Dawn (Lone Echo, Echo VR), Sony’s London Studio (PlayStation Worlds, Blood & Truth) and indie studio Archiact (DOOM 3 Quest port).

More recently, a number of XR studios have tightened their belts with staff layoffs, including VRChat, Fast Travel Games (Action Hero, Mannequin), Soul Assembly (Drop Dead series), and XR Games (Hitman 3 VR: Reloaded).