One of VR’s Most Senior and Successful Studios is Laying Off 70% of Staff

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Cloudhead Games, the veteran VR studio behind hit rhythm shooter Pistol Whip (2019), announced that it’s laying off 70% of staff, making for at least 37 affected employees.

Cloudhead CEO Denny Unger released the news via a Bluesky post, explaining the decision was based a “downturn of the gaming industry, VR’s still nascent challenges, including a lack of platform funding.”

Unger, who co-founded the studio in 2012 alongside Tracey Unger, characterizes the decision as a “difficult choice,” noting the studio’s mission still includes the core belief in the power of VR and its coming mainstream relevance.

Unger maintains that mainstream relevance isn’t here yet though; when devices that “do everything” eventually arrive, it will “take studios like ours to be there.”

“Our ongoing priority is to find ‘the reason’ to use VR and we will continue on that road until we can no longer,” Unger says. He further notes that a future update will include more about the challenges and potential opportunities in the VR games industry.

Notably, Unger says interested studios looking to hire former staff can consult this contact form.

Cloudhead Games is one of the most veteran studios in VR space, with releases including Pistol Whip, Aperture Hand Labs (2019), The Gallery – Episode 1: Call of the Starseed (2016) and its sequel Heart of the Emberstone (2017). The studio also announced in 2024 it was working on two new games.

Cloudhead is far from the only VR studio to see financial turmoil, much of which started in 2024. Notable shutdowns include Meta’s Ready at Dawn (Lone Echo, Echo VR), Sony’s London Studio (PlayStation Worlds, Blood & Truth) and indie studio Archiact (DOOM 3 Quest port).

More recently, a number of XR studios have tightened their belts with staff layoffs and reorganizations, including VRChat, nDreams (Reach, Fracked), Cyan (MYST, RIVEN), Fast Travel Games (Action Hero, Mannequin), Soul Assembly (Drop Dead series), and XR Games (Hitman 3 VR: Reloaded).

You can read Unger’s message in full below:

A MESSAGE FROM DENNY UNGER / CEO / CLOUDHEAD GAMES

I have some very difficult news to share. Due to industry forces beyond our control, Cloudhead must make the difficult choice to reduce our workforce effective January 7th 2026. 30% of us will remain to continue the mission.

The team leaving us are consummate professionals and wonderful people in general. We took great collective pride in creating a culture that was as caring about VR content as they were working to support each other. Each and every one of them shared a true sense of “give a damn” as we worked through still unseen projects, and they will all be deeply missed at our studio. And although we have done our best to pad the landing with supports, if you have room on your team please see the link below to our “Reverse Recruiting” spreadsheet and contact them directly.

The general downturn of the gaming industry, VR’s still nascent challenges, including a lack of platform funding have placed us in an impossible position. And while we’ve done all we can to reinvest in our people and VR’s future from prior successes, we can’t build “bigger swings” alone.

Cloudhead has weathered many storms in our 14 years in Virtual Reality. Our belief remains in the power of VR as a medium, as a shared dream machine that will one day transform humanity. We have no doubt VR’s mainstream relevance is predestined, with future devices that do “everything”, but it will take studios like ours to be there when that time comes. Our ongoing priority is to find “the reason” to use VR and we will continue on that road until we can no longer.

I will have much more to say about the challenges and potential opportunities of our industry in a future update. Until then, please help us support the talented people who leave us for other opportunities. You won’t regret it.

To them, to you, please take care.
Sincerely, Denny

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NBA Announces Full Schedule for Immersive Lakers Games on Apple Vision Pro

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Apple Vision Pro users are getting a good slate of immersive Lakers games this season starting this month, captured in 180 degree video.

Six Lakers games will be broadcast live as a front-row immersive experience through the Spectrum SportsNet app or NBA: Live Games & Scores on Apple Vision Pro.

First, here’s the full schedule:

Date	Time (PT)	Home Team	Away Team
Jan 9	7:30 PM	Lakers	Milwaukee Bucks
Feb 5	7:00 PM	Lakers	Philadelphia 76ers
Feb 20	7:00 PM	Lakers	Los Angeles Clippers
Mar 5	7:00 PM	Lakers	Denver Nuggets
Mar 10	8:00 PM	Lakers	Minnesota Timberwolves
Mar 30	7:00 PM	Lakers	Washington Wizards

Games are slated to include seven different viewing angles, including the scorer’s table, the area beneath the basket, a high-and-wide view of the arena, the player tunnel, the broadcast booth, and a roaming courtside perspective for interviews and commentary.

What’s more, broadcasts will also come with special pre-game introductions, team huddles and in-arena entertainment, as well as in-game 3D graphics like lower thirds, player rosters, the game and shot clocks, and scores.

Unfortunately, the games won’t be livestreamed across the board globally. Some regions in the US will be able to access livestreams, while others will have to wait 24 hours after the game. It’s the same story for countries outside of the US. Here’s the breakdown based on your location, courtesy Apple:

Southern California, Hawaii, and parts of Nevada: Spectrum Internet customers and video subscribers of any provider with a package that includes Spectrum SportsNet can access live games, full-game replays, and highlights by downloading the new Spectrum SportsNet app for Apple Vision Pro and authenticating their active subscription. Users with a free NBA ID will also have access to live games, full-game replays, and highlights via the NBA app.

All other U.S. markets: Apple Vision Pro users with a free NBA ID will have access to full-game replays and highlights in the NBA app as early as 24 hours after the game ends. All Spectrum Internet and TV subscribers outside the Lakers’ broadcast territory can also access full-game replays and highlights via the Spectrum SportsNet app.

Outside of the United States: Apple Vision Pro users in Japan, Singapore, and South Korea can access live games using the NBA app with a free NBA ID. Apple Vision Pro users with a free NBA ID in Australia, France, Germany, Japan, Singapore, South Korea, the UAE, and the UK can access full-game replays and highlights on demand via the NBA app as early as 24 hours after each live game.

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After Ditching Meta Headset Plans, Asus Partners with XREAL on ROG AR Glasses with 240Hz Display

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While the long-awaited Quest-style VR headset from Asus has been put on ice, the Taiwanese tech giant announced it has now partnered with XREAL on a pair of AR glasses for traditional gaming, which boast an impressive 240Hz refresh rate.

The News

In 2024, Asus and Lenovo announced they were creating Quest-style VR headsets running Horizon OS—the first third-party devices to do so. However last month, we learned that deal has been indefinitely “paused”.

At CES 2026 this week, Asus Republic of Gamers (ROG) announced it’s partnering with XREAL to release a pair of “gaming glasses” that feature dual 1,920 x 1,080 240Hz microOLED displays: ROG XREAL R1.

Similar to XREAL One Pro, the glasses are slated to offer a 57° field of view via its birdbath optics, 3DOF tracking, electrochromic tinting, and Sound by Bose audio.

ROG XREAL R1 is also shipping with an external ‘ROG Control Dock’ that extends connectivity to PCs and consoles with the addition of one DisplayPort 1.4 port and two HDMI 2.0 ports. Notably, it can also connect directly to supported USB-C devices, such as ROG Ally.

Image courtesy Asus ROG

Like XREAL One Pro, Asus says ROG XREAL R1 serves up the equivalent of a 171-inch virtual screen at 4 meters, substantively making its 240Hz refresh microOLEDs the major outlying difference between the two; XREAL One Pro ($650) only features 120Hz refresh.

Asus hasn’t mentioned pricing or release date yet, however ROG XREAL R1 is expected to ship globally in the first half of 2026.

Check out the spec sheet below:

ROG XREAL R1 Specs

Display	Sony 0.55-inch micro-OLED
Resolution	1,920 x 1,080
Refresh rate	240Hz
Field of view (FOV)	57°
Motion-to-photon latency	2ms
Peak brightness	700 nits
Color gamut	107% sRGB
3 Degrees of Freedom (DoF)	Native 3DoF, 6DoF supported
Adjustable lens transparency	3-level adjustable
Digital IPD adjustment	Yes
Audio	Sound by Bose
Weight	91g

ROG Control Dock Specs

I/O ports (Input)	2 x HDMI® 2.0 1 x DisplayPort 1.4
I/O port (Output)	1 x USB-C®
Video resolution	4K@60Hz
Dimensions	215 x 100 x 25mm
Weight	230g

My Take

When Asus and Lenovo announced last year they were working with Meta to create their own XR headsets running Horizon OS, the game plan was pretty clear: ROG would appeal to enthusiast VR gamers while Lenovo would hone in on productivity, and maybe even enterprise.

And I’ll admit, I didn’t really know what that meant at the time. Neither company had the leeway to meaningfully change the underlying Quest 3 hardware without fracturing the Horizon OS ecosystem, which is mostly now geared to content made specifically for Quest 3 and 3S, both of which run the Qualcomm Snapdragon XR2 Gen 2.

Quest 3S Xbox Edition | Image courtesy Meta, Microsoft

Light speculation: this essentially left Asus hamstrung. The company may have been faced with creating little more than an expensive, flashier Quest 3 running the same chipset—with maybe even the same resolution displays, and little else. Whatever the case, it was always going to be difficult to compete against Meta’s own subsidized first-party headsets without having a clear path towards differentiation.

Asus and Lenovo exiting the partnership may have come down to a shift in the overall competitive landscape. In 2024, getting third-party manufacturers in the mix was supposed to be Meta’s new ethos as the ‘open’ XR alternative—a foil to Vision OS, which, in Apple style, is a monolithic platform that will never be open to anyone but the Cupertino tech giant itself.

That ‘open’ ethos seems to be more of Google’s game with Android XR though—its opening salvo being the recently released Samsung Galaxy XR. I’d expect more Android XR-running headsets to come eventually too.

Meanwhile, Meta seems to be shifting the bulk of Reality Labs’ focus to developing AR and smart glasses, which feels especially relevant since ROG has decided to back long-time AR glasses maker XREAL instead of, say, announcing it was creating an Android XR headset in the vein of Quest.

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Asymmetric PC vs. VR Game ‘Panoptic’ is Getting a Sequel with 1v4 Multiplayer and Quest Support

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Panoptic (2020) is an innovative ‘PC vs. VR’ game that plays out like a game of 1v1 hide-and-seek, with one VR player seeking out a flatscreen PC player who tries to blend into the crowd. Now the studio behind the game has announced Panoptic II and says it plans to expand the game with up to 1v4 multiplayer and make the game more widely accessible with support for Quest 3 and mobile devices.

The News

Developer Team Panoptes announced Panoptic II late last month in a livestream where the studio elaborated on plans for the game.

The studio confirmed that Panoptic II will continue to be designed around a singular VR player who acts as the ‘seeker’. But the studio plans to make the game accessible for larger groups and on more platforms than the original.

Instead of a single non-VR as the ‘hider’, Panoptic II is said to support up to four non-VR players who can work together to outwit the seeker. And this time around the non-VR players will join the game from mobile devices (presumably iOS and Android), making the game more accessible than the original game which required the non-VR player to play on the same PC being used by the VR player.

That new approach to non-VR players also stands to make Panoptic II more accessible to VR users; the studio says it has plans to bring the game to PC and, for the first time, Quest 3 as well.

Team Panoptes tells Road to VR that the gameplay loop will be expanded from the first game, and include brand new maps.

The studio is aiming to fund development of Panoptic II with crowdfunding support via a Patreon campaign, and says it plans to release early versions of the game closed testing, with a first build expected in Q1.

My Take

Panoptic’s asymmetric PC vs. VR gameplay is undoubtedly niche, but incredibly fun. During the Covid pandemic, friends and I spent many hours playing the game remotely using Discord and Steam’s ‘Remote Play Together’ feature.

Thanks to VR, the seeker’s embodied presence and giant scale feel exceptionally imposing to the tiny non-VR player, creating tense moments where a single slip-up could lead to a suspenseful cat-and-mouse chase. The seeker may be powerful, but with roaming NPCs that look identical to real non-VR player, there’s many opportunities to blend in and outwit the seeker.

For as unique and enjoyable as the gameplay was, the technical structure of Panoptic (a multiplayer game where both the VR and non-VR player are expected to play from the same PC) made it minimally accessible.

Panoptic II’s approach should make the game considerably more accessible. Not only because it will add support for Quest 3, but also because non-VR players will be able to join from their phones. With any luck, the phone version of the game will be ‘free’, which would turn the Quest 3 version of Panoptic II into a portable party game.

Back when I was playing with my friends over Discord, it was easy for the non-VR players to take turns being the ‘hider’. But as the only one with local access to the VR headset, I was the only one who got to play the role of the seeker. With the purported changes to Panoptic II, I’m already looking forward to being able to take my Quest anywhere and pass it around to friends so they can finally experience the other side of the game.

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Magic Leap Signs Deal with Taiwan’s Pegatron, Strengthening AR Manufacturing Position

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Magic Leap announced a manufacturing partnership with Pegatron, a major global electronics manufacturer, to scale production of AR glasses components, including Magic Leap’s waveguide technology.

The News

Under the agreement outlined in a press statement, Pegatron will apply its manufacturing capabilities to help turn Magic Leap’s optical designs into mass-produced components.

Taiwan-based Pegatron specializes in developing and producing computing, communications, and consumer electronics for major brands, in addition to being the parent company of PC component company ASRock.

Details are still under wraps, however Magic Leap Product and Partner Development exec Jade Meskill says the partnership will create “a clear path to bring AR components to market at scale.”

“This collaboration reflects the growing maturity of the AR ecosystem,” said Jason Cheng, Vice Chairman at Pegatron. “By combining Magic Leap’s component-level expertise with Pegatron’s manufacturing infrastructure, we can support more efficient pathways from development to production.”

This follows the announcement in October that Magic Leap was entering into a multi-year AR hardware partnership with Google.

My Take

Despite early market missteps that saw millions (if not billions) go to the development of its ML 1 and ML 2 headsets, Magic Leap seems to be making good on its pivot from AR headset creator to major AR component player, as the company is leveraging its designs, know-how and catalogue of patents to stay in the fight.

And despite the years of grinding, it’s a fight that still hasn’t really heated up just yet, as companies like Meta, Apple and Google are still in deep in preparation to create their own AR glasses (note: not smart glasses) for release sometime before 2030.

Still, if the coming AR revolution is anything like the smartphone revolution of the early 2000s, there will potentially be a lot of players beyond those three tech giants to spin up competition when AR components eventually get cheaper with economies of scale.

And while we’re not there yet, Magic Leap seems to have found a solid raison d’être in the meantime, and a much better shot at one day becoming profitable as a result.

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‘VRChat’ Breaks Concurrent User Record on New Year’s Eve

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VRChat’s head of community says the popular social VR platform set a new concurrent user record over the New Year’s Eve celebrations.

The News

As first reported by UploadVR, VRChat’s head of community ‘Tupper’ detailed concurrent user numbers as they rolled in across the various Western Hemisphere time zones during the platform’s annual 24-hour NYE celebration, making for a peak of 148,886 concurrent users during the Central Time Zone ball drop.

Here’s the full breakdown, courtesy Tupper, which includes all supported platforms:

Across the board for US TZs:

• ET: 147,226
• CT: 148,886
• MT: 141,184
• PT: 127,708

Notably, Tupper says that also Japan’s had “a strong showing,” although they declined to details the exact numbers, noting however “it did surprise me.”

Additionally, Tupper says that recent “normal weekend” numbers float around 120-125k concurrent users at peaks.

My Take

VRChat doesn’t regularly publish user figures, or user breakdowns across platforms, which is a real shame since it could be one of the best ways of telling just how well VR is doing overall during these post-holiday periods—right as a flock of new users is coming in to try the massive, free and extremely well-known social VR platform.

And yes, while I tend to call it a social VR platform, VRChat is actually much more than that nowadays, as it also undoubtedly pulls in a significant share of users across flatscreen, which include PC, Android, and iOS.

Image courtesy SteamDB

As it is, engagement doesn’t appear to be slowing down on PC, according to data obtained from SteamDB. Above, you can see the massive bump in 2018 leading up to recenrt ~75,000 concurrent users connected through the Steam version of the app. Notably, those local peaks always coincide with the holiday season.

That said, all platforms eventually plateau, although it’s difficult to say when that might be for VRChat. It’s still attracting a lot of maker talent, thanks to its flexible user-generated content platform, and is still the go-to place for a variety of Internet subcultures.

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