One of VR’s greatest development studios is closing its doors permanently today. Ready at Dawn Studios, renowned for the critically acclaimed Echo VR and Lone Echo games, will cease operations effective immediately. The studio, which has also produced beloved PSP classics like God of War and Daxter, has not launched a new game since Echo VR was ported to Quest in May 2020. The sales performance of Lone Echo 2, a PCVR-only game, may have influenced this decision.
Impact on Employees
Meta, the parent company of Oculus Studios, has encouraged Ready at Dawn employees to apply to other studios within the Oculus Studios umbrella. The company aims to retain as many talented developers as possible despite the closure. Meta assured that all employees will receive severance pay similar to previous rounds of layoffs at the company.
Budgetary Constraints
The decision to close Ready at Dawn was driven by new budgetary constraints within Meta's Reality Labs division. According to an internal memo from Gio Hunt, VP of Oculus Studios, the cuts are not a proactive cost-saving initiative but rather a measure to ensure that Reality Labs stays within its new budgetary ceiling. This move aligns with a report from mid-July indicating that Meta plans to reduce Reality Labs' budget by 20% by 2026.
Meta spokespersons have clarified that these cuts are intended to make a "better long-term impact" in VR development. They emphasized that this decision does not signal wider cuts to the number of first-party games on Quest and that the company remains committed to VR development.
Future of VR Development
While Reality Labs has historically spent billions per quarter on developing XR hardware like the Meta Quest 3 and Ray-Ban Meta Smart Glasses, as well as VR games and Meta AI features, the company is now implementing a hard cap on quarterly spending. Despite these financial constraints, Meta recently announced that Quest 3 sales are "exceeding their expectations," as reported in the company's most recent quarterly earnings call.
Meta also addressed concerns regarding the California WARN Act, which requires companies to give employees notice ahead of time if more than 50 employees are laid off in a 30-day period. The company stated that the closure of Ready at Dawn does not trigger this act.
As Ready at Dawn closes its doors, the VR community reflects on the studio's significant contributions to the industry. From the immersive worlds of Lone Echo and Echo VR to their earlier PSP classics, Ready at Dawn has left an indelible mark on gaming. While this chapter ends, Meta's commitment to VR development suggests that new opportunities and innovations are on the horizon.
