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<\/a>Image courtesy Meta<\/p>\nIn early 2025, Meta CTO Andrew Bosworth issued a memo<\/a> calling it a \u2018make or break\u2019 year for the company\u2019s XR ambitions.<\/p>\n \u201cThis year likely determines whether this entire [XR] effort will go down as the work of visionaries or a legendary misadventure,\u201d Bosworth wrote.<\/p>\n Well, by early 2026 it\u2019s looking like \u201clegendary misadventure\u201d takes the cake.<\/p>\n Apparently not seeing the growth and traction it wanted, Meta is making an aggressive shift in its XR strategy. The last few days have seen reports of multiple first-party VR studios being cut down to size<\/a> or outright shuttered<\/a>. The company\u2019s business-focused virtual collaboration space, Horizon Workrooms, is being shut down<\/a>, and more.\u00a0In total, the company is said to be cutting roughly 10% of its entire Reality Labs division<\/a> as it shifts focus away from VR and \u201cmetaverse\u201d efforts.<\/p>\n What it Means for 2026<\/p>\n It\u2019s going to take a while for the dust to settle on this, and it probably won\u2019t be until Q2 that the company shares a clear vision for what it hopes to accomplish with the cuts and new direction.<\/p>\n From what I\u2019m seeing and hearing, it sounds like Meta isn\u2019t exiting the XR space, but it\u2019s shifting focus more strongly toward the glasses end of the spectrum, while doing away with the notion that building a \u201cmetaverse\u201d (a digital space where people would gather, play, and work) is a strategic imperative.<\/p>\n Rather, it looks like Meta will continue to run its XR headset platform and let it evolve naturally rather than trying to place big content bets or force the metaverse into existence. Meanwhile, the company is said to be focused on boosting production of its smart glasses to serve growing demand<\/a>.<\/p>\n Although that likely means a greater focus on smart glasses and AI assistants for the time being, it\u2019s clear that the company\u2019s end-goal is (and has been) to evolve its smart glasses into full-blown augmented reality glasses over time. In fact, Meta showed an early vision of this end goal back in 2024 with the Orion prototype<\/a>. The 2025 release of the Ray-Ban Display glasses<\/a>, and the \u2018neural band\u2019, was a clear step toward that goal.<\/p>\n Ray-Ban Display is still just a pair of smart glasses (ie: a small field-of-view and a static display with no tracking). But already the company that makes the waveguide in Meta\u2019s glasses says it has a much larger 70\u00b0 field-of-view waveguide that\u2019s ready for production<\/a>.<\/p>\n For many years I\u2019ve explained that the industry has been working on the challenge of compact and affordable XR devices from two sides. On one hand, the industry has started by packing a wishlist of features into a bulky headset, and then trying to make it smaller. On the other hand, the industry is starting a tiny glasses-like package, and then trying to add back all the features enjoyed by the bulkier headsets.<\/p>\n Meta has mostly focused on the former (headsets), but it\u2019s now shifting focus to the latter (glasses). The end goal, however, remains the same: an affordable and comfortable device that can digitally alter the world around you.<\/p>\n This big shift isn\u2019t just a big deal for Meta, it\u2019s a big deal for the whole industry. Meta has been dominant in the space for years, thanks in a big part to being able to out-price the competition and attract developers, thus building the leading standalone headset platform. With its standing in the industry, Meta has been able to direct much of what has happened within the industry, either explicitly or implicitly.<\/p>\n If Meta is pulling back on its VR and metaverse initiatives, the door may open for another company to take over its influential role. Or, the space might settle into a new equilibrium with a renewed competitive landscape, which has long been suffocated by Meta.<\/p>\n All we can say for certain is that 2026 will be a year of major realignment as the industry figures out how hands-on Meta plans to be with its VR platform going forward.<\/p>\n The Biggest Year in Recent History for XR Hardware 2025 turned out to be a huge year for XR hardware launches and announcements.<\/p>\n Google finally revealed and launched Android XR, a direct competitor to Apple\u2019s VisionOS. Samsung launched the first Android XR headset<\/a>, Galaxy XR, a direct competitor to Apple\u2019s Vision Pro.<\/p>\n Apple also launched a new version of Vision Pro with an upgraded processor and (finally) an improved headstrap<\/a>. And after years of rumors and speculation, Valve announced Steam Frame<\/a>, its second-ever VR headset.<\/p>\n In parallel, we\u2019re also seeing the rapid heating up of the smart glasses and AR glasses space.<\/p>\n Meta launched updated versions of its smart glasses, including Ray-Ban Display<\/a>, its first smart glasses with a display. XREAL previewed Aura<\/a>, which is set to launch in 2026 as the first AR headset running Android XR. The company\u00a0subsequently raised $100 million in new funding<\/a> as it announced an extended partnership with Google<\/a>. VITURE, a company with similar approach to smart glasses and AR glasses,\u00a0also raised $100 million in 2025<\/a>.<\/p>\n What it Means for 2026<\/p>\n Although they happened in the same year, all of these announcements represent the culmination of investments and development that happened over the last several years. With three major tech titans making XR plays (Meta, Apple, and Google), 2026 is shaping up to see a level of competition that truly hasn\u2019t been seen yet since I started reporting on the industry back in 2011<\/a>.<\/p>\n Meanwhile, Valve is taking a whole new approach to its VR architecture. Frame is a fully standalone headset\u2014a first for Valve\u2014and the company has designed it to be a better companion to people\u2019s existing Steam library, by allowing it to play pretty much\u00a0any Steam game (VR or otherwise) either locally or streamed from a nearby PC.<\/p>\n While Valve is giving PC VR some much needed love, I\u2019m still not convinced that Frame is going to revolutionize the space. Although it has some neat extras (like improved wireless game streaming thanks to eye-tracked optimizations), it doesn\u2019t really do that much more than a Quest 3 or Quest 3S, which will inevitably be the cheaper options. As with its prior headset, Frame will probably remain limited to an enthusiastic niche of hardcore PC VR players. But ultimately, Frame shows that Valve never stopped caring about VR and that the company is still focused on making Steam an open VR platform on PC that will be maintained for years to come.<\/p>\n Meta has been hard at work prototyping full-blown AR glasses<\/a>, but it hasn\u2019t actually launched such a product yet. Meanwhile, Xreal and Viture have been rapidly evolving their smart glasses with growing AR capabilities, seemingly catching companies like Meta by surprise. The pair of $100 million investments into Xreal and Viture (and especially Xreal\u2019s close partnership with Google) will put pressure on Meta to release its AR glasses sooner rather than later.<\/p>\n Valve Reveals a New Headset, But Confirms No New First-party VR Game to Go With it Given that Valve launched Half-Life: Alyx back in 2020 to show what was possible with its first VR headset, there was widespread speculation that the company would similarly announce a new VR game to launch alongside Steam Frame. But as the company told me directly, there is no new first-party VR game in development<\/a>.<\/p>\n What it Means for 2026<\/p>\n The lack of a flagship launch title to go out the door with Steam Frame has left many scratching their heads. New headsets are exciting, but given the dearth of exciting PC VR content in the last few years, what are people actually going to play\u2026 more\u00a0Beat Saber?<\/p>\n I\u2019m glad Valve is still in on VR, but I\u2019m not exactly bullish on Frame. Luckily the PC VR landscape has never had more options to serve various hardcore PC VR niches, thanks to companies like Pimax, Bigscreen, and Shiftall\u2014and hey, even Sony technically makes a PC VR headset<\/a>!<\/p>\n A Shifting VR Player Demographic Comes to a Head as Veteran VR Studios Struggle to Stay Afloat 2025 was a brutal year for established VR studios. Highly immersive single-player apps were once the bread and butter of VR gaming. But VR was not insulated from the broader gaming industry shift toward free-to-play multiplayer games.<\/p>\n That shift seems to have reached a peak just as a wave of prior long-term bets on single-player VR content was coming to fruition in 2025. The result has been report after report of established VR studios struggling to stay afloat.<\/p>\n Among studios seeing underwhelming revenue, staff cuts, or outright closures this year was Cloudhead Games, Fast Travels Games, Soul Assembly, Vertigo Games, Toast Interactive, nDreams, and Phaser Lock. Not to mention Meta shuttering several of its first-party VR game studios that were focused on single-player content<\/a>.<\/p>\n On the other hand, new studios focused on free-to-play multiplayer content have seen rapid growth and seemingly reached unprecedented new peaks of player counts and retention. Games like Gorilla Tag, Animal Company, Yeeps, and UG\u00a0are dominating Quest\u2019s Top Selling Charts<\/a> by serving a younger demographic of players looking for free-to-play multiplayer experiences. Interestingly, all four of these newer top-earning titles are also built around arm-based locomotion<\/a>.<\/p>\n What it Means for 2026<\/p>\n Whether we like it or not, free-to-play multiplayer is here to stay. Many of the most popular non-VR games are free-to-play multiplayer games, so it should be no surprise that the same formula would take over VR as well. The unfortunate part is that the transition happened so fast that by the time the latest wave of big budget single-player VR games landed, they were launched into a void of demand. With production times of some bigger VR games spanning 1-3 years, it\u2019s difficult to course-correct.<\/p>\n Especially with Meta\u2019s latest cluster of studio closures, the message is now unambiguous: premium single-player VR games are no longer what the bulk of active VR users are looking for. That\u2019s not to say there\u2019s no room for great single-player experiences in VR, but the demand for them isn\u2019t what it used to be.<\/p>\n Of the veteran VR studios that have managed to weather the storm, I expect to see many of them take their first stab at free-to-play multiplayer VR games, or focus on \u2018VR optional\u2019 titles, or even leave VR for the time being while they seek greater stability in the larger gaming market.<\/p>\n Frankly, I think this situation has a bit less to do with the \u2018free-to-play\u2019 part, and more to do with the \u2018multiplayer\u2019 part. As with almost every entertainment activity in existence, most people like to\u00a0play games with their friends. The rise of massively successful\u00a0paid multiplayer games with structures that are reminiscent of traditional single-player games (ie: Destiny,\u00a0Valheim,\u00a0Helldivers, Arc Raiders) tells me that pure single-player games as a whole will one day become a thing of the past.<\/p>\n That\u2019s not to say that we won\u2019t see great, \u2018single-player style\u2019 games still made (like, say,\u00a0Red Dead Redemption 3)\u00a0but I bet you\u2019ll at least have the option to play them with a friend or two.<\/p>\n Vision Pro First Generation Pathfinding 2025 was the year that we saw Apple working to fix first-generation product issues with Vision Pro. That included adding official support for PSVR 2 Motion Controllers and a Logitech stylus<\/a>, several major new features included in the launch of VisionOS 26<\/a>, and a refresh of the headset with a more powerful M5 processor and a better headstrap<\/a>.<\/p>\n What it Means for 2026<\/p>\n These changes were all clearly meant to address first-generation pain points. Specifically, the improved headstrap was a major admission that the headset was too heavy and bulky. Unfortunately a better head strap can only do so much.<\/p>\n I don\u2019t expect we\u2019ll see any new XR hardware from Apple in 2026. But I do expect to see the company continue to make more of these first-generation fixes and to further improve the headset\u2019s most promising use-cases on the software side. I\u2019m still personally hoping for better window management<\/a>.<\/p>\n While there\u2019s been much\u00a0reporting about Vision Pro as a \u2018failed\u2019 product, those that are actually connected to the XR industry understand that Vision Pro is a significant contribution to the state-of-the-art that\u2019s really only held back by its current size and weight<\/a>. I\u2019m certain Apple knows this too.<\/p>\n My bet is that Apple is far from done with Vision Pro and VisionOS. It\u2019s rare for the company to make a product play only to cancel it after one generation. More likely, I\u2019m willing to bet that Apple has set new and specific goals for the size and weight of its next Vision headset, and will happily wait for years until it can actually meet those goals. In the meantime, it will continue to invest in VisionOS, which I\u2019ve long said is a\u00a0more important\u00a0contribution to the industry than the headset hardware itself.<\/p>\n 2025\u2019s \u201cWTF\u201d Moment What seemed on its face like an April Fool\u2019s joke, was anything but. In 2025 Nintendo announced it is revitalizing its Virtual Boy console<\/a>.<\/p>\n First released in 1995, the Virtual Boy was portrayed as a type of \u201cvirtual reality\u201d experience, but considering its small field-of-view, lack of motion tracking, and single-color (red) display, it was functionally just a 3D display on a stand. Still, the console has been culturally associated with \u201cvirtual reality\u201d ever since\u2014and it\u2019s not exactly a positive association.<\/p>\n Ambitious as it was, Virtual Boy was an infamous failure of a game console, owed largely to its minimal game catalog, single-color display, and reports of motion sickness while playing. It was discontinued less than a year after launch.<\/p>\n The upcoming $100 accessory will use Switch or Switch 2 as the brains (and display) of the device, and it will play original Virtual Boy games like\u00a0Mario\u2019s Tennis, Teleroboxer, and Galactic Pinball, with a planned total of 14 titles to be launched in time (that may not sound like many, but it\u2019s more than 50% of the entire Virtual Boy game catalog).<\/p>\n Nintendo will also sell a $25 \u2018cardboard\u2019 version of the Virtual Boy accessory which will allow Switch to play the same games but without the stand and plastic facade to hold the console.<\/p>\n We still don\u2019t know if\u00a0the games are simply being emulated or if they have been retouched or remastered. I hope they\u2019ll be at least updated to render at the native Switch or Switch 2 resolutions, rather than the tiny 0.086MP (384\u00a0\u00d7 224) per-eye resolution of the original Virtual Boy.<\/p>\n What it Means for 2026<\/p>\n Nintendo continues its long history of weird decisions<\/a>, and I\u2019m here for it.<\/p>\n 2026 Wildcards: Snap & HTC In my book, the biggest wild cards for 2026 are Snap and HTC.<\/p>\n HTC was once a prominent player in the VR space, having built a long line of PC VR headsets that rivaled Meta\u2019s Rift. But once Meta shifted focus to standalone, HTC wasn\u2019t able to keep up. Sure, HTC released several standalone headsets, but none have come close to the consumer and developer traction of Meta\u2019s Horizon.<\/p>\n That\u2019s left HTC meandering over the last several years, culminating last year in the unexpected sell-off of much of its XR engineering talent to Google for $250 million<\/a>. Since then, HTC has followed Meta into the smart glasses space with VIVE Eagle<\/a>. But, so far, the glasses have only launched in Taiwan.<\/p>\n Exactly where HTC heads next is unclear.\u00a0Will it follow Meta\u2019s lead again and shift its primary focus to smart glasses? Or could it swoop in and try to fill the vacuum left by Meta\u2019s pullback from the VR and metaverse space?<\/p>\n The latter could be a significant opportunity for the company which, at very least, has the same core pieces already in place (standalone VR headsets, an app store, and a \u2018metaverse\u2019 platform). Not to mention strong traction in the B2B and LBE spaces, which Meta never quite got a handle on.<\/p>\n As for Snap, the company has been planning its entry into the consumer AR space for years at this point. Last year the company\u2019s CEO effectively said that its bet on the AR space is fundamental to the company\u2019s continued existence<\/a>.<\/p>\n The company has launched two generations of its \u2018Spectacles\u2019 AR glasses, and the company has spent time focusing on developers and building out tooling based on feedback<\/a>.<\/p>\n
\n<\/a>Photo by Road to VR<\/p>\n
\n<\/a>Image courtesy Valve<\/p>\n
\n<\/a>Created using images courtesy Meta<\/p>\n
\n<\/a>Apple Vision Pro (M5) | Image courtesy Apple<\/p>\n
\n<\/a>Image courtesy Nintendo<\/p>\n
\n<\/a>Image courtesy HTC<\/p>\n<\/a>Snap Spectacles (gen 5) | Image courtesy Snap Inc<\/p>\n