Facebook’s Oculus shutting down its virtual reality shop, Story Studio

(Image: Story Studio)

Oculus, the virtual reality firm acquired by Facebook in 2014, has announced it is shutting down its in-house VR content arm, Story Studio.

According to Variety, the 50 staffers at the studio are being told to apply for other jobs within Oculus.

In a blog post, Jason Rubin, vice president of content at Oculus, announced the closure is coming as a reaction to what he sees as a growing ecosystem of VR content creators.

“We’re now entering the next chapter of VR development, where new creators enter the market in anticipation of adoption and growth, and we’ve been looking at the best way to allocate our resources to create an impact on the ecosystem. After careful consideration, we’ve decided to shift our focus away from internal content creation to support more external production,” Rubin wrote.

Rubin insists that Oculus will remain committed to helping grow the VR and AR content ecosystems, but by closing Story Studio, it will now be able to focus its “internal research, development, and attention towards exciting but unsolved problems in AR and VR hardware and software.”

Last year, Oculus committed $250 million to fund VR content. Rubin said the company will put $50 million of that toward exclusively funding non-gaming, experiential VR content. Oculus is promising to continue providing resources and programs to VR content creators.

Story Studio, which created VR short films including “Lost,” “Henry,” and “Dear Angelica,” placed some of its focus on sharing with and educating the larger VR content ecosystem.

Related: With VR headset growth pegged at 58%, some Hollywood directors rally around the technology

While the closure of Story Studio comes as a blow to the VR content ecosystem, it is true that many larger studios and VR firms have been ramping up production of VR content. Film studios including Fox, Lionsgate, Paramount and Warner Bros. have all been creating VR content as complements to films on their current and upcoming release schedules.

Hollywood directors like Jon Favreau, who helmed “The Jungle Book” and “Iron Man,” have been hyping the content creation possibilities with VR.

“I know that as a storyteller this set of tools and the feelings I get from this medium are unique, and it's compelling for me even in the absence of any kind of model for success,” Favreau told MIT Technology Review recently.

Related: Virtual reality to bring in $7B this year, $75B total by 2021, report says

At least in financial terms, there appears to be good reason for studios to be enthusiastic about VR. Greenlight Insights recently forecast that global VR market revenues will total nearly $75 billion by 2021, well ahead of the near $7 billion in revenue projected for this year.