Palmer Luckey, the Oculus founder, believes Meta's recent closure of its VR game studios isn't a sign of the company abandoning virtual reality. Instead, he views these moves as beneficial for the industry's long-term health. Last week, Meta shut down three studios—Twisted Pixel Games, Sanzaru Games, and Armature Studio—and laid off about 1,500 employees from its Reality Labs division, representing roughly 10% of that workforce. This shift is part of Meta's strategy to redirect investment from the Metaverse towards AI and wearable technology. Luckey argues that the narrative of Meta abandoning VR is misleading. He points out that Meta still has the largest team in VR by a significant margin. He believes that having major studios like Meta competing directly with smaller developers can stifle innovation and growth across the ecosystem. He cites examples like Rock Band VR, which sold only 700 copies despite a substantial investment, highlighting the risks of large budgets that don't translate into sales. Luckey suggests that reducing the focus on first-party content could allow for a healthier competitive environment for third-party developers. He acknowledges the human cost of layoffs but insists that this restructuring is necessary for the industry’s future. Luckey's comments reflect his long-standing view that fostering a diverse ecosystem of developers is more important than supporting in-house projects that may not resonate with consumers. His perspective challenges the common narrative surrounding Meta's recent decisions, framing them as a step toward a more sustainable VR market.