Hey, Daily Quest readers. We have some heavy news from the frontlines of VR gaming. In a move that has sent shockwaves through the industry, Meta has reportedly canceled a direct sequel to Batman: Arkham Shadow following a massive internal restructuring.
This news comes at a particularly bittersweet time, as the original Batman: Arkham Shadow just swept the VR categories at recent award ceremonies, including a major win at the NYX Game Awards 2026 for "Best VR Adventure" and widespread acclaim from the New York Game Awards.
The Reality Labs Purge
On January 13, 2026, Meta confirmed the closure of three prominent VR studios under its Reality Labs division. The victims of this shift include:
Sanzaru Games: The heavy-hitters behind Asgard’s Wrath 2. Reports from Aftermath and UploadVR indicate that Sanzaru was the studio actually leading development on the now-canceled Arkham Shadow sequel.
Armature Studio: Known for the legendary Resident Evil 4 VR port.
Twisted Pixel: The team that just released Marvel’s Deadpool VR.
According to Meta, this "strategic pivot" is part of a larger move away from high-budget "Metaverse" gaming and toward AI-integrated wearables and AR (Augmented Reality) tech.
What We Lost: The Arkham Sequel
Rumors of a sequel first gained traction in late 2025 when Mark Rolston (the voice of Commissioner Gordon) hinted that the cast was heading back into the recording booth.
The Scope: The sequel was reportedly moving deeper into the Arkhamverse, potentially bridging the gap between Arkham Shadow and Arkham Asylum.
The Studio: While Camouflaj developed the first game, Sanzaru Games had allegedly taken the reins for the follow-up to allow Camouflaj to focus on a "new user experience" for Meta's upcoming hardware.
Status: Following the layoffs, Camouflaj has reportedly been reduced to a "skeleton crew," and the Sanzaru project has been officially scrapped.
Meta's Remaining VR Powerhouse Studios
With the closure of these three giants, Meta’s internal VR development now rests on just three remaining pillars:
Beat Games (Beat Saber)
BigBox VR (Population: ONE)
Ouro Interactive (Horizon Worlds development)
The "Arkham VR" Timeline
| Game | Release | Developer | Status |
| Batman: Arkham VR | 2016 | Rocksteady | Released |
| Batman: Arkham Shadow | 2024 | Camouflaj | Released (Award Winning) |
| Untitled Arkham Sequel | Canceled | Sanzaru Games | Production Halted (Jan 2026) |
Final Drop: A Dark Night for VR
The cancellation is particularly stinging because Arkham Shadow was hailed as a "system seller" for the Quest 3, proving that high-fidelity, triple-A experiences could thrive in VR. With Meta shifting its billions toward "Wearables," the future of high-end VR gaming feels more uncertain than ever.
What’s your take, Quest squad? Is Meta making a mistake by killing off its best gaming IP, or is the shift to AR glasses the right move for the company? Let us know in the comments!
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