New reports say that a sequel to Batman: Arkham Shadow was being made but has now been canceled. These news came out just a day after big layoffs happened at Meta's Reality Labs, which led to the closing of three VR game studios. One of those studios was Sanzaru Games, which was reportedly working on the sequel.
Batman: Arkham Shadow was the second Batman: Arkham VR game and the 10th game in the Batman Arkham series. It came out only on the Meta Quest 3 and 3S in October 2024. The game was made by Camouflaj, the same team that made Marvel's Iron Man VR in 2020. When it first came out, it got a lot of good reviews. Many people said it really felt like the Rocksteady Batman: Arkham games, but in a VR format. The game won several awards, including a Game Award, a New York Game Award, and a D.I.C.E. Award. Right now, it has a 100% critics' recommendation score on OpenCritic.
On Monday, January 12, the New York Times shared that Meta intended to cut 10 to 15% of its workers in the Reality Labs division. The move is meant to focus less on Virtual Reality and more on new augmented reality and AI projects. On January 13, Meta officially announced it had shut down three studios within Reality Labs: Sanzaru Games, Armature, and Twisted Pixel. Sanzaru is famous for making Asgard's Wrath and its 2023 sequel, which was the top-rated Meta Quest game. Armature worked on the well-received Resident Evil 4 port for the Meta Quest 2. Twisted Pixel recently released Marvel's Deadpool VR. A new report now suggests there might be even worse news connected to these job cuts.
On January 14, Aftermath reported that some former Meta workers, who spoke to the outlet without being named, said Sanzaru Games was making a sequel to Batman: Arkham Shadow. They also said that after the studio closed, the game is probably not being developed anymore. The same sources told Aftermath that Camouflaj, the team that made the original Batman: Arkham Shadow, was also affected by Meta's layoffs. It was reported that only a few people are left at Camouflaj now, and they are working on a "new user experience" for future Meta hardware.
On January 15, UploadVR shared similar information. Their anonymous sources said that a Batman: Arkham Shadow sequel was being made by Sanzaru Games but has been fully canceled since the studio closed this week. UploadVR also confirmed that Camouflaj was hit hard by the layoffs. According to UploadVR, only three VR studios are still active at Meta: Beat Games, BigBox, and Ouro Interactive.
Rumors about a sequel to Batman: Arkham Shadow first came up in September 2025. During Fan Expo Chicago 2025, Mark Rolston, who plays Commissioner Gordon, said, "We're about to start another one of those." Although development timelines can vary between studios and projects, actors are typically involved in the process at some point during development. This suggests that the supposed sequel to Batman: Arkham Shadow was already in full production when it was canceled this week.
Kotaku reported on these layoffs and got confirmation from a Meta representative that Camouflaj was impacted but wouldn't be closing down. The report also includes a general statement from Meta about the layoffs in its Reality Labs division. The statement says: "We said last month that we were shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year."