Meta CTO: VR Gaming “gravy train” Has Stopped, Customer Acquisition Now the Real Problem

By
Scott Hayden
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16

Meta CTO and Reality Labs chief Andrew Bosworth detailed why he thinks he might have failed VR gaming fans, and why some people are angry, noting that it’s probably because the “gravy train has come to a stop.”

The News

Bosworth took to Instagram for another one of his weekly Q&As, where he fields questions from followers. In yesterday’s session, Bosworth answered this: “Do you feel that you have failed VR gaming fans? With so many sunsets and studio closures?”

“It’s really up to the people to decide whether I failed them or not,” Bosworth says. “I suppose it does raise the age-old question: ‘is it better to have loved and lost than never to have loved at all?'”

Here, Bosworth is describing the Reality Labs re-org in January, which saw 10 percent of the XR division laid off amid several VR game studio closures, including Twisted Pixel, Armature Studio and Sanzaru Games.

Quest 3S (left), Quest 3 (right) | Images courtesy Meta

“Many of the people who might say I failed them would say so because they loved things that I gave them, and are mad that the gravy train has come to a stop. But I still respect that,” Bosworth says.

But it’s not the first-party studio closures and near full-stop on VR game funding that Bosworth thinks is the failure: it’s customer acquisition.

“I don’t think I failed them because obviously they’re already fans. They love the work. The people that argue that I’ve failed are not yet VR gaming fans, who I think could be—who we hoped would be by now, but who aren’t.”

The failure, in Bosworth’s eyes, is not having created the right product for people who haven’t already adopted VR.

“And I haven’t built the right thing, or the right software to get them into the ecosystem. That is the failure. That is what we’re trying to attack in new and different ways: is to grow the base, to make this thing sustainable.”

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My Take

Essentially, Bosworth’s statement reads me like this: be glad for what I gave you, because you’re not getting any more. You have to realize that the only thing we can do now is try to get more people in… somehow.

But who are those people that Meta hopes to reach? And if they don’t want big, expensive single-player content that pushes the boundaries of standalone gameplay, what do they want? Meta’s strategy is too opaque to say for sure, but here’s my best guess at what’s happening.

For years, Meta funded big, polished single-player titles to prove standalone VR could deliver console-style gaming. That bought goodwill with core enthusiasts, but didn’t materially expand the addressable market, or drive recurring revenue at scale. That’s the only thing Meta is focused on now it seems, as the “gravy train” has effectively stopped.

Asgard’s Wrath 2 | Image courtesy Sanzuru Games, Meta

In that context, Bosworth’s “failure” comment makes more sense. It’s not that the existing fans weren’t served—they were. It’s that the strategy didn’t convert enough non-fans into regular, paying users. That, and Meta has always been the ones to ‘show’ other studios how to build VR games—what with best practices and all—but for the past few years it’s been less about best practices and more about being the only company with deep enough pockets to create prestige content for Quest.

But before running off to compare Meta’s pullback to Sony’s vis-à-vis PSVR 2, there are at least two rumored headsets on the horizon: codename ‘Griffin’, expected to arrive sometime in 2027 and possibly succeed Quest 3, and a slim and light, puck-tethered headset codenamed ‘Puffin’ or ‘Phoenix’, also expected in 2027.

That said, kids have been big revenue drivers since the release of Quest 2, which has directly translated to Quest 3S. As it is, Meta announced last year that younger users were helping to push a new emphasis on free-to-play content, which in turn has helped drive in-app purchases. Last week, Reality Labs VP of Content Samantha Ryan revealed in-app purchases increased by 13% year-over-year, which notably didn’t even coincide with a new headset launch. Quest has no real competitor in the West, so Quest 3S is likely going to be around for a few more years so younger players have an easy entry point and continue to drive in-app purchases.

And at the same time, Meta has effectively decoupled Quest from its Horizon Worlds social platform, which was dead weight on Quest. This has essentially left the Quest platform re-focused back on VR gaming, albeit created solely by third-party studios and not Meta itself. So, Quest is back to gaming without the Horizon Worlds faff mixed in, but it won’t have any new first-party sponsored content either.

In all, this feel less like abandonment and more like a tactical retreat. Meta is investing in VR more than anyone, not to mention upcoming AR glasses and possible quick follow-up to Meta Ray-Ban Display. Games will still come, and some may even benefit from Meta funding to some extent, albeit not at the same scale as before. At least as Meta presents it, the long-term vision is still there; it just needs more sustainable spending and a different model to scale.

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Scott Hayden
Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 4,000 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.

  • Quote:‘is it better to have loved and lost than never to have loved at all?'”
    I think he is really wrong here! They took companies from the market, so that no other can buy them or so that said companies couldn't work for Sony etc.

    So the questions should be: is it better to merry a person, just so no other should be with them? And thats highly depressing to say the least!

    No, meta f@cked up with all their metaverse stuff, cumbersome software and now they drop the games division like hot potatoes.

    • Hussain X

      Almost all the companies Meta bought, Meta funded the VR titles in the first place before buying them. So the big VR games, before Meta bought the studios, won't have existed anyway without Meta funding. Sony buying Insomniac games accelerated this buying.

      If anything, Meta took companies from flat gaming market into VR gaming market. Like Gabe took VR gaming file hosting fee of 30% from the VR market into the super yachts market.

  • mellott124

    They got a lot more new users into VR. More than we've ever had before. It just isn't enough for them.

  • Leisure Suit Barry

    VR gaming is on the severe decline, only delusional people like @nl_vr disagree

  • Nothing to see here

    Meta, please pay attention: There is a reason why more people play console games than any other. The controllers work great. Look at the PS5 controller. Compare it to the PS2 controller. Not a lot different, right? Still the same basic shape. Buttons and sticks are in the same positions. A few more bells and whistles but it's pretty much the same. The reason why VR sales are not growing like they should be is that the vast majority of potential users are put off by the weird hand waving user interface you insist upon for all your VR games. Now look at the Switch 2 and compare it to the Wii controllers. Notice how the Switch 2's controls are basically a PS2 controller split to both sides of the screen? Remember how the Wii failed miserably in the end? That's the Quest right now. Please require games to at least support standard PS5 controller compatibility via Bluetooth. Allow the Quest to act as an amazing VR display for PC games. I know you thought that the future was Ready Player One or Sword Art Online in which the user believed they were actually inside the VR world but we are very, very far from full dive technology. Literal hand waving (sometimes bone breaking) is a completely failure just like the Nintendo Virtual Boy was. Go with what actually works in gaming first and expand into more immersive games once you have a large self sustaining user base.

  • My understanding of using the phrase "gravy train" is that someone is getting something for free or at a greatly reduced cost.

    As a VR user since 2015 I find this yet another slap in the face from Meta.

    Can we have Oculus back now please?

    • JakeDunnegan

      I feel like the gravy train was really to the developers. They were getting paid a LOT of money to produce things that did not produce customers or make sales. It's also developers and Meta's job to get new customers, not gamers'.

      I don't think this guy is pointing at gamers, since it's not like the stuff was free, but perhaps in his confused delivery, gamers are getting a bit of splash damage of "blame" b/c Meta subsidized the development and took a loss, but it was by no means free, and again, it's not our job to get customers.

      • Christian Schildwaechter

        The development of Quest and Horizon OS was "free" for users, as Meta sold headset at production costs, eating all other expenses. So the gamers were on the gravy train too, and we will see the impact of that once Meta starts releasing no longer subsidized hardware.

        It is the "job" of the customers to spend enough to keep a platform sustainable, even if companies will often be willing to bankroll the initial phase until enough people have gotten onboard. There are both too few VR users, and they on average don't spend enough money to pay for all the development, so we have gotten tons of stuff maybe not completely free, but at unsustainable low prices.

        Of course you can shift the responsibility for growing the user base to only Meta, Pico or Valve, but then you also have to accept if those cut their losses because it didn't work out. People complain about the Google graveyard of killed projects, but conveniently forget that these were usually shut down due to lacking users engagement.

  • Keng Yuan Chang

    too many steps to put on, too many steps to initiate, too many steps to put down, clunky and constant adjustments required, hot spots, sore spots, sore arms, getting through limited functionalities complicatedly, too much effort

  • Oxi

    I would think they are just going to buy out the free to play games, but this whole idea is absurd. They were very clear that they were going to burn money on XR and monopolize the industry, that's not a "gravy train." I'm not thanking standard oil for anything. I love that the steam frame is an open platform and can play existing games, if I can't get on the train then I can make my own.

    • mwbrady

      If you knew anything about them, you would thank Standard Oil.

  • Christian Schildwaechter

    TL;DR: Meta didn't lose their future platform bet due to a lack of trying or making too many mistakes, but due to betting on the wrong horse/medium.

    I'm with Bosworth on this one. You can blame Meta for a number of things, like pushing others out of the market, lots of inconsistent strategies, and a lack of necessary focus, but you can't say they didn't try to make VR a success. They were in fact willing to pay a very high price for this for a very long time, long after it had become clear that it wasn't going to be anywhere as easy as they initially hoped. There was no money grabbing involved, only money burning. And part of their pushing and inconsistency and seeming lack of focus was them adjusting and trying to figure out how to still get there.

    So I agree, Meta didn't fail VR fans, even though it tried to force Horizon Worlds down everybody's throat, shut down their PCVR efforts way too early and recently killed several studios and projects. Simply because they also really pushed the technology forward, made VR affordable and paid millions for AAA titles and supporting lots of VR developers, in a hope to attract more users.

    They failed to grow VR beyond its limited user base to where it would either fit their plans or became self sustainable. But so did everybody else. Meta no doubt messed up details, but the overall problem wasn't Horizon Worlds or the controllers or some specific game or the shitty UI or software bugs. These were no doubt screw ups, but the main problem is still that the vast majority of gamers/people don't like/want VR. And a lot of what people suspected were the reasons for this has been fixed, from lower prices to higher resolution displays to much simpler setup and extensive game libraries.

    Someone will no doubt still say that if only the FoV was larger, if only they had released GTA SA, if only they used OLED, if only the battery was at the back/in a puck, if only they included DP-In, this would have finally have made VR interesting for the masses. But given that the tremendous advances VR has seen over the last decade barely twitched the needle on how many gamers pick VR, that seems very unlikely.

    So far VR is not a mass medium, not even close. And there is a decent chance that it will never become one, because people don't like to strap things to their faces. Not even if they are superlight and well balanced and can also play flat games, so Frame won't change this either. Maybe future XR glasses that are almost indistinguishable from sunglasses, but still provide the immersion of today's VR HMDs will be more acceptable. But for one these won't exist for a long time. And it is possible that people still will not want to use them for VR, because they just don't care about high immersion, and don't want to be disconnected from others and their environment.

    I recently rewatched an LTT video quoting an IGN study saying that 93% of Gen Alpha prefer their phone as their primary gaming device, as well as 32% of all Millennials. That caused groaning noises by the presenters deep into PC gaming and at least expecting a controller for a decent gaming experiment. In another video by Pirate Software Thor was shocked to find young kids just don't know what a controller is, and automatically touch the display to control games instead.

    We are talking about 98% of the Steam users willing to put up with mouse/keyboard/controllers still rejecting VR, and even these 98% are now becoming a tiny minority in a large sea of people that do all things on an always connected touch screen they carry with them at all times, immersion be damned. Meta switching Horizon Worlds to mobile first/only and seeing user numbers quadruple in 2025 is a reaction to this development.

    So maybe the discussion should switch from trying to blame Meta for not doing better with growing VR, to how we deal with VR being and staying a niche that will now see a lot less investment in the future. It's not Meta's fault that VR didn't take off, in fact they deserve some gratitude for pushing VR to where it is today, and probably never would have gotten if actual VR revenue had had to pay for the development, similar to how it works in most other areas.

  • JakeDunnegan

    That "gravy train" comment is a bit confused. Surely Bosworth doesn't think gamers received some type of gravy train, considering those AAA games weren't cheap.

    After listening to it, I can only interpret Bosworth as using a very weird word choice and the question is a bit odd. In the end, the question should be, "How do you respond to VR gamers who are disappointed that so many studios are closing?" (the word "fans" here is just odd – who's a "fan" of VR gaming vs. who's just a VR gamer?)

    The actual answer to the question would be, "Many of the people who might say I failed them would say so because they loved things that I gave them, and are mad that the gravy train subsidized AAA games hasve come to a stop. But I still respect that,” Bosworth says."

    And this is where it gets weird.

    “I don’t think I failed them because obviously they’re already fans. They love the work. The people that argue that I’ve failed are not yet VR gaming fans, who I think could be—who we hoped would be by now, but who aren’t.”

    And, I interpret his response to be a dodge. He says the only disappointed fans are the ones who aren't VR gamers yet. Uh, sure, maybe they are. But if they're disappointed, they likely don't acknowledge it as such. Most NON-VR "fans" likely don't even know the studios were shut down in the first place. (How many billions of people do NOT pay attention to what's going on in the VR universe? It's just a stupid conceit on his part.)

    And yes, VR Gamers probably like or even love a fair number of the AAA games, but you are dodging the question which is – we've bought your hardware, expected to have a line-up of games to BUY (NOT a gravy-train), and despite being "fans" – it sure would be to imagine more are on the way – but there are NOT more on the way, based on how you handled this question.

    And yes, the next phase in VR adoption is to continue to perfect the hardware. Smaller, easier to use, easier to use with people around, just like other gaming systems. Also, make better games, and make them cheaper.

    Compare what's happening across the board in AAA gaming. Ubisoft is on its last legs. Xbox just changed out management. Games like Clair Obscur made for about $.37 beat out all kinds of other games, and yet, the studios keep putting out slop like Concord, Redfall, Skull & Bones, Forspoken, Avowed, The Outer Worlds 2, The Day Before, Suicide Squad, and on and on.

    Having huge studios does not guarantee money or success. VR's biggest game, Beat Saber, was not made by a huge studio. Three dudes in the Czech Republic made it.

    Meta (and other gaming companies) would be smart to remember that.

    • Christian Schildwaechter

      The Quest AAA games were incredibly cheap, because they never made back their development costs. Just because you can buy a console AAA title for USD 60 that distributes these costs over tens of millions of buyers doesn't mean that USD 60 would in any way be enough to pay for Asgard's Wrath 2. Which was one of the few titles sold for more than USD 40, and vanished from the sales Top 20 the second it was no longer bundled for free.

      We don't know the costs of porting RE4, but heard from Ubisoft that sales for the USD 40 Assassin's Creed Nexus (with financial support from Meta) were so disappointing that they stopped further VR projects. If the VR game market was an actual market, AAA titles would have to costs hundreds of dollars per copy, which of course nobody would pay, meaning there would be no AAA VR titles at all without heavy subsidization.

      We/VR fans were just incredibly lucky that the long term strategic goals of a few trillion dollar companies led to one of them providing us with incredibly cheap (compared to their actual costs) hardware and games for a decade. That's in no way how things normally work, and not acknowledging that smells a lot like entitlement.

  • BananaBreadBoy

    >“It’s really up to the people to decide whether I failed them or not,” Bosworth says. “I suppose it does raise the age-old question: ‘is it better to have loved and lost than never to have loved at all?'”

    lol fuck off Boz. You gave precious little worth "loving".