Harry Potter VR Game Reportedly Cancelled Amid Meta Budget Cuts

By
Scott Hayden
-
12

Meta has closed at least three of its XR studios, and seems to have also drastically reduced its budget for third-party Quest content too, reportedly including a now-cancelled Harry Potter VR title.

The News

In his latest video, YouTuber ‘Gamertag VR’ maintains Skydance Games, the makers of Skydance’s Behemoth (2024), was working on an official Harry Potter title set to be exclusive to Quest. At least, that was before Meta ostensibly pulled funding to a number of third-party studios earlier this week.

Skydance hasn’t publicly announced work on the game, however Gamertag cites a “very reliable source” that a Harry Potter VR title was indeed in the making before Meta pulled the plug. We’ve reached out to Skydance and will update this piece when/if we hear back.

You can see Gamertag’s video below:

Additionally, Gamertag maintains that the recent Cloudhead Games layoffs, which affected 70 percent of the veteran XR studio, also came as a direct result of Meta pulling funding.

Cloudhead Games, the studio behind rhythm shooter Pistol Whip (2019), announced in 2024 it was working on two new games, the status of which is still under wraps.

It’s said Meta had already invested $60 million meant to fund new exclusive content for Quest this year.

SEE ALSO
Valve Says No New First-party VR Game is in Development

My Take

In a vacuum, pulling funding from a single massively recognizable title like Harry Potter is worrying. But cutting what appears to be most, if not all of its gaming efforts signals a much bigger shift in the landscape. Meta is doubling down on smart glasses and AI, while VR and its metaverse ambitions are taking a back seat—and everyone is still digesting that, yours truly included.

While Meta reportedly axed 10 percent of Reality Labs in the process, the company even seems to be counting their XR pennies in a way we simply haven’t seen. XR hardware analyst Brad Lynch claims Meta layoffs also affected “some individuals who were running Meta’s Horizon Start Program,” which is tasked with funding independent XR developers—a tool the company used over the years to not only seed goodwill in the dev community, but amplify content that may not have existed without the expectation of platform exclusivity.

As for the veracity of Gamertag’s report: we’re only a year away from the release of the new Harry Potter HBO series, set to kick off in 2027. It makes sense to me that the IP would be everywhere in effort to maximize eyeballs, making an official Quest title a pretty logical extension to the forthcoming attempt at rekindling Potter Mania.

And I can’t think of any other studio with deeper ties to traditional media than Skydance Games, which also developed The Walking Dead: Saints & Sinners VR franchise. Notably, Skydance Games’ parent company is Paramount Skydance—the result of a merger last year between Paramount Global, National Amusements, and Skydance Media.

That said, I expect to hear more in the coming days from insider sources, which of course we’ll be reporting on here, so check back soon.

If you’re an affected developer looking to talk on or off record, drop us a line at tips@roadtovr.com

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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.
  • NL_VR

    So both Harry Potter and Batman in the bin. Sad day

    • ErickTheDiver

      Why not just finish the projects and announce nothing new afterwards? So much wasted talent and money.

  • ErickTheDiver

    Welp, jumping off the Meta ship moving forward. Still not giving up on VR though.

    • sfmike

      That's OK because the industry has given up on VR. They see the future in AI glasses to cause permanent brain rot with the goal of you being surrounded by ads during your waking hours making them more profit for the only people that matter in the world, their greedy investors and of course their now right wing politically connected CEO.

  • Nothing to see here

    Meta fails to understand Apple's lesson: It's not the product, it's the ecosystem. My interest in Meta's AI glasses was due to the fact I used my Quest 3 every day. If the Quest goes away, so does my interest in Meta's other products.

    • Christian Schildwaechter

      So far there is no connection between Meta Quest and Meta Ray-Ban glasses. Their use cases are completely different, they run completely different software, and at best Meta was able to recycle some of their algorithms on the ultra-low power smartglasses. But most likely everything they created for Quest was way to compute expensive.

      There simply exists no ecosystem like it does for Apple with central services shared between Macs, iPhones and AVP, and there is nothing on the Horizon(OS) hinting that would change within the next few years. Which apparently wasn't a problem, as the Meta Ray-Bans are a surprise hit, with most likely almost no overlap between Quest and Ray-Ban buyers.

      So if your interest in Meta smartglasses was bound to Quest, this is about brand loyality, not about (non-existing) ecosystems. It's like saying you don't want to buy a Samsung fridge anymore, now that Samsung RAM has become so expensive, because this destroyed the ecosystem you were counting on.

    • Andrew Jakobs

      I'll bet they sure as hell know damn well as the (rayban) AI glasses seem to sell much better as the Quest, and mostly to non vr-users..

  • STL

    I would love to buy Harry Potter on Steam PCVR. Quest 3 with its limited resources isn’t my first choice anyway.

    • Andrew Jakobs

      Hogwarts legacy with UEVR is the closest you'll probably get.

  • Christian Schildwaechter

    TL;DR: The sky isn't falling.

    This is the current sales top 20 on the Horizon store:

    1. UG
    2. Gorilla Tag
    3. Beat Saber
    4. Yeeps
    5. Animal Company
    6. Blade & Sorcery: Nomad
    7. FitXR
    8. BONELAB
    9. GOLF+
    10. VRChat
    11. I Am Cat
    12. PokerStars – Vegas Infinite
    13. TAXI DRIVER VR
    14. Virtual Desktop
    15. Rec Room
    16. I Am Monkey
    17. Five Nights at Freddy's: Help Wanted
    18. Roblox
    19. Marvel's Deadpool VR
    20. NFL PRO ERA

    AFAIK, only Deadpool VR was developed by a Meta studio. Beatsaber was bought by Meta after it had already become a cross platform VR hit. It's possible that some of the other titles received financial support from Meta, but overall Meta no longer creating games themselves won't change much. Simply because they focused on expensive high profile titles that other studios wouldn't touch, as they were unlikely to ever make their development costs back. But these aren't the games that the average Quest users are actually buying/playing.

    I'm somewhat surprised how many people now see doom and gloom due to what is clearly a cost cutting measure by Meta in reaction to their strategy of attracting lots of new gamers with high profile titles simply never having worked. Closing these studios and canceling already started projects will have a much smaller impact on the actual Quest games market than Meta slowing down hardware development and reducing Quest subsidies, and it's not like they are suddenly dropping out of VR.

    From the (intentionally?) leaked 2025-12 memo by Meta's new metaverse leads Gabriel Aul/Ryan Cairns:

    We’ve been working hard to bend the curve and accelerate ahead of the category’s natural growth rate, which means running multiple programs in parallel as well as carrying costs like tariffs and subsidies for content, GTM, and devices. […]

    Our devices will be more premium in price going forward, but we’ll have a healthier business to anchor on and free ourselves from feeling existential about any singular device’s success, […]

    We’re committed to VR for the long-haul so we need to align our business model and roadmap to an approach that will make this possible, […]

    So basically they tried to push VR by throwing money at it, saw that this didn't work, still intend to keep working on it, but at a slower pace ("the category's natural growth rate"). And they will most likely try to keep their current leading position by still offering the most affordable headsets. The adjustment is quite understandable after burning through USD 10B each year at MRL for rather limited results. They are simply trying to turn what was an expensive high risk bet into a (more) sustainable business.

    This will of course (at least initially) be somewhat unpleasant for Quest users that so far got their hardware for much less than it was technically worth. But hopefully this will longterm lead to a healthier VR market with more competition and more options to chose from. A market that companies engage in with realistically sized projects that may actually succeed, not because a platform owner pays them to create exclusive titles that will never make back their development costs.

    • Denny Unger

      You know that exhausted feeling when you have a relative or friend with a political or religious slant that just isn't worth "getting into"? That's what I feel when reading the above.

  • Jonathan Winters III

    "VR and its metaverse ambitions are taking a back seat".

    Actually, kicked out of the car at full speed.