Meta’s recent restructuring of its Reality Labs division has sparked widespread concern across the VR industry, with many fearing the onset of a so-called "VR winter." The company laid off approximately 1,000 employees—about 10% of Reality Labs—targeting VR-focused teams, including those behind the Quest headsets and Horizon Worlds, Meta’s virtual social platform. The cuts are part of a broader strategic shift to prioritize artificial intelligence and smart glasses, such as the Ray-Ban Meta glasses developed with EssilorLuxottica. Despite Meta’s claim that it remains committed to VR, the move has sent shockwaves through the developer community. Jessica Young, an independent VR content creator who has built a career on Horizon Worlds, expressed concern, noting that the platform now feels stale and lacks momentum. “I can see how it feels like a VR winter,” she said, reflecting on the loss of creative energy and support. Meta’s pivot comes after years of heavy investment in VR. Since acquiring Oculus in 2014, the company has poured over $70 billion into Reality Labs, with little return in terms of mainstream consumer adoption. While VR has found success in gaming and niche markets, it has failed to achieve the mass appeal once envisioned by CEO Mark Zuckerberg. The company’s decision to skip a major Quest headset announcement at its 2025 Connect event in favor of introducing the $799 Ray-Ban Display glasses underscores the shift in focus. Andrew Bosworth, Meta’s chief technology officer, acknowledged that VR growth has been slower than expected. “We're still continuing to invest heavily in this space, but obviously, VR is growing less quickly than we hoped,” he said in a statement to Sources. He emphasized the need to “right-size” investments. Oculus co-founder Palmer Luckey echoed this sentiment, suggesting the layoffs were necessary for long-term health, even as he expressed sympathy for those affected. Market research from IDC paints a clear picture: while the broader Extended Reality (XR) category is expected to grow by 41.6% in 2025, driven largely by AI-powered smart glasses, shipments of VR and mixed-reality headsets are projected to drop by 42.8%. Jitesh Ubrani, IDC’s research manager, said the VR headset market has proven to be too niche for average consumers, who remain uninterested in bulky, immersive devices. Andrew Eiche, CEO of Owlchemy Labs, a Google-owned VR studio, compared the current state of VR to the video game crash of 1983. He warned against expecting a sudden breakthrough, noting that VR’s evolution will likely be gradual, much like the industry’s recovery after Nintendo’s comeback. He remains hopeful that new hardware—such as Valve’s Steam Frame, Samsung’s Galaxy XR, and Apple’s Vision Pro—will help reignite interest. However, Apple’s high-priced headset has struggled to gain traction, with production reportedly halted by its Chinese manufacturer, Luxshare, in January. Still, the enterprise market offers a glimmer of promise. IDC reports steady growth in business use cases, such as training and remote collaboration, where VR delivers measurable ROI. Meta’s decision to discontinue its Horizon managed services for businesses has been seen as a setback, but some believe the enterprise sector may eventually sustain the industry. Sean Mann, CEO of VR startup RP1, lamented Meta’s failure to see VR’s potential beyond gaming. “They missed the bigger picture,” he said. Young, despite her concerns, plans to continue creating content for Horizon Worlds, citing its past role as a lifeline during the pandemic. She hopes the platform’s legacy isn’t forgotten, even as Meta shifts focus toward mobile and AI.