The video game industry has been facing a wave of layoffs in 2024, affecting thousands of workers across various sectors. However, one of the hardest-hit segments has been the virtual reality (VR) game developers, who have seen several studios close down or reduce their staff in the past few months.
According to Kotaku, the first round of video game layoffs in 2024 happened at VR games developer Archiact, known for its Doom 3 VR port, Journey to the Foundation, and Freediver: Triton Town. The company announced on social media that it had laid off an unspecified number of staff on January 4, 2024.
“We are working with these individuals to offset this difficult transition as much as possible, including through reverse recruiting,” said the studio in its announcement post.
Archiact was not the only VR game developer to face layoffs in 2024. TechRaptor reported that Bossa Studios, the maker of Surgeon Simulator and I Am Bread, also cut 19 people from its staff in late 2023, mostly from its VR division. The layoffs were confirmed on January 5, 2024, by the studio’s co-founder Henrique Olifiers.
“We’ve been working on VR for a while now, and while we love the medium and the potential it has, we also have to be realistic about the market and the challenges it poses,” Olifiers said in a statement.
Olifiers added that the studio will continue to support its existing VR titles, such as Surgeon Simulator 2 and I Am Fish but will focus more on its non-VR projects in the future.
The VR game industry has also seen some major closures in 2024, such as the shutdown of CCP Games’ Atlanta studio, which was responsible for the VR shooter EVE: Valkyrie. The studio was closed in February 2024, as part of a larger restructuring of the Icelandic company that also affected its London and Shanghai offices.
CCP Games’ CEO Hilmar Veigar Pétursson said that the decision was made due to the slow growth of the VR market, which did not meet the company’s expectations.
“While we continue to believe in the long-term vision for VR, it is clear that the market will take longer to develop than we anticipated,” Pétursson said in a press release.
Another VR game studio that closed its doors in 2024 was nDreams, the developer of Phantom: Covert Ops and Fracked. The studio announced its closure in March 2024, citing financial difficulties and the impact of the COVID-19 pandemic on its operations.
“It is with great sadness that we announce the closure of nDreams. We have been unable to secure the funding we need to continue developing our VR games, and the ongoing effects of the pandemic have made it impossible for us to sustain our business,” said the studio’s founder and CEO Patrick O’Luanaigh in a farewell message.
O’Luanaigh thanked the studio’s fans, partners, and employees for their support and contributions over the years, and expressed his hope that VR gaming will thrive in the future.
The VR game industry has been struggling to find a stable and profitable niche in the video game market, despite the advances in technology and the availability of affordable VR headsets. According to SuperData, a research firm that tracks the VR market, the global VR software revenue in 2023 was $2.4 billion, a 17% increase from 2022, but still far below the $180 billion revenue of the overall video game industry.
The VR game industry has also faced challenges in attracting and retaining a large and diverse audience, as many gamers still prefer traditional gaming platforms and genres. Some of the common barriers to VR adoption include the high cost of VR hardware, the lack of compelling VR content, the technical issues and bugs of VR software, and the physical discomfort and motion sickness caused by VR experiences.
The VR game industry is not giving up, however, as some developers and publishers continue to invest in and innovate the medium. For example, Sony announced in February 2024 that it is working on a new VR headset for the PlayStation 5, which will offer improved resolution, field of view, tracking, and ergonomics. The company also revealed some of the upcoming VR games for the PS5, such as Horizon: Call of the Mountain and Resident Evil 4 VR.
Other VR game developers and publishers that have announced or released new VR titles in 2024 include Valve, Ubisoft, Bethesda, and Oculus. Some of the notable VR games that have launched or are expected to launch in 2024 include Half-Life: Alyx – Aftermath, Assassin’s Creed VR, Starfield VR, and Medal of Honor: Above and Beyond 2.
The VR game industry is facing a critical moment in 2024, as it tries to survive the layoffs and closures that have plagued it and to prove its value and potential to the gamers and the market. Whether VR gaming will become a mainstream and profitable segment of the video game industry, or remain a niche and experimental one, remains to be seen.
