A new era appears to be kicking off in immersive hardware as long-time VR developers reel from a Christmas season without new consumer hardware drawing in audiences.
UploadVR spoke with a number of developers finding themselves in varying degrees of distress over the overall direction of investment in VR and the overwhelming cost of reaching people in headsets about their wares.
Several spoke on condition of anonymity for fear of their business relationships with platform companies being affected by their comments. If you have comments you’d like to share with UploadVR, you can email ian@gamexplore.com or message 1-949-610-3857. I will assume comments are fine to associate with your name unless you include the words “on background” in your message to request I take steps to anonymize your statements.
“We are definitely seeing a shift in the market and a need to diversify in terms of platforms,” wrote Tommy Palm, the head of Resolution Games. “We’ve been preparing for this for some time as we’ve aimed to make our games available to players across as many platforms as possible for the last few years. While it’s no easy task to launch a game like Demeo x Dungeons & Dragons: Battlemarked across Quest, PlayStation and Steam – with the goal of more platforms to come – the game did exceed our sales goals over the holidays, and being cross platform helped with that.”
Creature led by Doug North-Cook released several projects in 2025 with partners of the label launching new games and downloadable content at a regular pace. Maestro continues dropping hugely appealing DLC content and our reviewer found Deadly Delivery from Creature-associated Flat Head Studio to be “hilarious horror best played with friends”.
“The state of the industry leaves no room for error,” North-Cook wrote. “With no new headset this holiday sales were up over the holidays but not where they would be in a new device era. I fully expect most studios will have a difficult time finding a positive path forward this year as industry trends, lack of investment, and declining per-developer revenue hit everyone hard.”
“Creature isn’t slowing down at all though. We have several large titles in development across multiple partner studios – some of our most ambitious yet. We also had a positive holiday with our catalog overall doing pretty well and Deadly Delivery ranking as one of the top selling titles leading into the holidays.”
Cloudhead Games laid off 40 people after teasing for years work on a major title following their standout release Pistol Whip. The studio confirmed in the comments on our initial article about the layoffs that both versions of the game – one for Intel machines and one for ARM systems – will be packaged for sale on the forthcoming Steam Frame. At 16 people now, founder Denny Unger’s first week of 2026 involved resetting Cloudhead’s strategy and “reverse recruiting” for dozens of now-former colleagues looking for new remote positions.
Some VR game developers have been buoyed by revenue from the subscription programs offered by Sony and Meta that their games are downloadable through. Some developers, however, see these subscriptions becoming a larger percentage of a smaller income pie overall. With no new VR hardware from Meta in 2025 and confirmation that their third-party Horizon OS headset program has been shelved, developers growing overly dependent on subscription revenue likely face difficult decisions about how to maintain independence or continue VR development.
Forking Inputs
Do VR developers build games for controller-free hand tracking or for a new set of controllers from Valve that differ from Meta Quest in the number of buttons they have?
Do they build volumes that float in space alongside other volumes and windows, or do they construct fully immersive virtual worlds?
Can VR developers expect the targeting of eye tracking in all future headsets to help them build more responsive software?
In early 2025, we met virtually with Ryan Payton of Meta-owned studio Camouflaj to cover their work on the Batman: Arkham Shadow Game of the Year edition.
“We’re as hungry as ever,” Payton told us during the broadcast. “I think a Wolverine VR game would be incredible. I want that.”
A Meta Neural Band worn on each wrist could conceivably make that dream come true. When combined with the idea that computer vision could help more accurately detect precision microgestures, we’re glimpsing an era with Meta’s Display glasses that could see users do much more than just navigating menus in headsets or glasses privately with simple thumb swipes.
In the dreams we seem to share with the director of one of the best VR games produced by Meta, we want something wholly more robust from our experience in headset. Wolverine’s adamantium claws can seem to slide out from underneath the skin of our wrists and then we can use our new tools to climb up brick walls in wide field of view virtual reality. This can be done without controllers in hand as wristbands vibrate haptic effects for us instead. If this is the way, it would require Meta figuring out how to transition its ecosystem from selling two inexpensive controllers in the box with each headset to bundling up a pair of Neural Bands instead.
Without third-party Horizon OS headsets to differentiate the experience inside Meta’s ecosystem near term, and as executives court partners like UFC and James Cameron long term, VR game developers are left wondering what space Meta is making for them in their future endeavors.
50-degree field of view AR glasses with a wristband on your dominant hand to interact with menus or handwrite will certainly be interesting to some people for tasks out in the physical world. However, that’s so very far from the presence-inducing VR of the sort we would want in a Wolverine game. We can only have dual-wielding indestructible claws via a pair of bands on both wrists with wide field of view virtual reality doing the work of transporting us into a world of superheroes.
Platform Focus
Consider the next two years facing two of the best games made for VR – Batman: Arkham Shadow and Half-Life: Alyx. Near term, pirates are likely to try to run Batman: Arkham Shadow on the Frame headset before Meta chooses to put it for sale on the Steam store.
Meanwhile, Valve is working to get Half-Life: Alyx running performant in the standalone Steam Frame. If that should happen, will there be the same demand to get that experience running directly on a Meta standalone?
I’m illustrating that some of the biggest-budget exclusive software products made for VR headsets – games owned 100% by the platform – find their virtual worlds diametrically opposed in the pressure ahead for their distribution.
Alyx faces developer-led optimization to bring an experience that sings with a high-powered PC down to run performant on a low-powered standalone headset. Batman faces the demand of PC buyers hungry for more high-quality content than the market can produce, and a publisher with some motivations against selling software via a competitor’s storefront.
Nintendo releases the revamped Virtual Boy next month and we’ll be curious if Sony can pull together a coherent strategy after the PlayStation VR2. Meanwhile, Apple chips away at major software updates for visionOS and we’ll have a review of Steam Frame once we receive the completed headset from Valve.
For now, multiple long-time VR development studios still find themselves committed to the medium and working on new software, but they are also recalibrating their expectations for a smaller market near-term and difficult decisions ahead about focus and differentiation.
