The last few years have hit game studios hard. Microsoft’s mass layoffs, publishers shutting down, and even major buyouts show just how tough game development has become. No studio stands immune—not even industry veterans. Now, Cloudhead Games, a longtime leader in the VR space, has announced plans to lay off 70% of its workforce.
Major Layoffs at Cloudhead Games
Recently, CEO Denny Unger sadly announced that Cloudhead Games is laying off most of its workforce. “Due to the industry forces beyond our control, Cloudhead must make the difficult choice to reduce our workforce effective January 7th, 2026. 30% of us will remain to continue the mission.”
For those unaware of Cloudhead Games. The studio is a Virtual Reality pioneer that has been around for 14 years. The studio has won over 50 awards and nominations, including multiple “Game of the Year” awards and dozens of “Best of Lists” for their games, such as Pistol Whip.
Yet despite all of these huge accomplishments, the company has only under 50 employees on their LinkedIn page. If this is an accurate sum of their workstaff, that means that the layoffs at Cloudhead Games could put them under 25 people or fewer.
A Cutthroat Industry
CEO Denny Unger also has this to say about the situation: “The general downturn of the gaming industry, VR’s still nascent challenges, including a lack of platform funding, have placed us in an impossible position. And while we’ve done all we can to reinvest in our people and VR’s future from prior successes, we can’t build ‘bigger swings’ alone.”
Unger also ends this with:” Our belief remains in the power of VR as a medium, as a shared dream machine that will one day transform humanity,”. He also encourages supporting the talented people who were unfortunately cut in the layoffs.
For more news and updates, keep an eye on our Other Games section.
