Gaming within Meta's Reality Labs division is getting more attention and resources as the company continues to reorganize during what Meta CEO Mark Zuckerberg dubbed the "Year of Efficiency."
Teams working on gaming-related projects at the company, formerly known as Facebook, are some of the only ones deemed to be safe amid a new round of layoffs set to begin Wednesday and conclude toward the end of May, three people familiar with the company said. The next wave of this round of layoffs is expected to begin the week of May 22, the people added.
As Zuckerberg's efficiency mandate takes shape and new layoffs get underway, many projects and teams within the Facebook app and Reality Labs are expected to be dissolved, all three of the people familiar noted. On the other hand, teams focused on gaming will be able to hire for some roles once layoffs conclude, one of the people familiar said.
Enthusiasm from Zuckerberg and other company executives around gaming has grown in recent months, two of the people added, while the founder and CEO's overall tone on the metaverse has become more subdued. Some hardware elements are already in the process of being "retooled" to improve Quest headsets for gaming and game developers, one of the people familiar said.
"There's a recognition now that they need the real game developers onside," one of the people familiar added.
The company is also discussing how to get a "major game" along the lines of "Call of Duty" or "Grand Theft Auto" into the Quest app store, the person added.
A Meta spokesperson did not respond to a request for comment.
Increased focus on gaming from Reality Labs is a shift for Zuckerberg. Although the Quest app store has scores of games available, the CEO has boosted the technology as being more than a new world for gamers since he went public with his metaverse ambitions in fall 2021.
Instead, Zuckerberg promoted the metaverse for social interactions, work, and e-commerce. All of that activity was expected to take place through avatars in its new platform Horizon Worlds. But the Horizon avatars have been ridiculed as too cartoonish and the product has not seen widespread adoption. The company's last update on its usage was in February 2022, saying it had 300,000 monthly users.
Facebook, with the largest head count within Meta, is looking at an overhaul of its operational structure to be more streamlined, as Insider previously reported. Reality Labs, overseen by the company's chief technology officer, Andrew Bosworth, and responsible for all of the company's metaverse projects, is also pulling back in spending as it lost nearly $14 billion in 2022. Still, projects and teams producing tangible results, like gaming, are seeing budgets stay the same or increase, the people familiar added.
Besides gaming, Zuckerberg and Bosworth have publicly commented on the importance of AI at the company, with the metaverse taking a backseat.
Investors and Wall Street analysts have asked for a "killer app" to come to Meta's headsets since the company changed its name from Facebook and pivoted toward building the metaverse. Meta now recognizes internally that traditional gaming is the most likely path to gaining financial ground with Reality Labs, one of the people familiar noted.
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