Is Virtual Reality Really Dead?
Things are not looking good for virtual reality. Once considered the future of online interaction, VR is currently facing a difficult challenge, and the consequences are stark: Meta is by far the largest player in the VR market, and its Reality Labs division has lost over $73 billion since its launch five years ago, forcing the company to shift some resources away from VR to developing smart glasses and artificial intelligence. Apple, considered number two in the VR market, shipped only 45,000 Vision Pro headsets in the last quarter of 2025, a tiny fraction of the 82.6 million iPhones Apple sold during the same period.
At the 2021 unveiling of his metaverse, Mark Zuckerberg envisioned Horizon Worlds as a vast digital continent, but its active user base is only around 200,000 . By comparison, the children’s game Roblox boasts over 380 million monthly active users. This is despite the fact that Meta and Apple headsets are generally considered superior hardware .
In the sober light of accounting books, virtual reality looks like a shuffling corpse, too stupid to realize it’s dead. But the same was said about video games in 1983 —the death of Atari seemed like the end of the road, but then came the NES.
Zuckerberg’s slogan about a billion people living in the seamless, weightless, gravity-free vacuum of suburban technocapitalism may be outdated—it turns out we didn’t need another world full of random people—but in its place is a growing community, built from the ground up by filmmakers, game developers, and everyday people who are working together to create a new way to feel part of something.
Virtual reality filmmaking is an exciting new direction.
“We’re all trying to recreate the Star Trek holodeck,” Matt Celia, co-founder and creative director of Light Sail VR , told me. Light Sail has been producing VR films and videos for 10 years, and its catalog includes everything from concerts at Red Rocks to narrative VR series and an Emmy-winning immersive experience celebrating the 50th anniversary of Saturday Night Live . “My belief in this medium is unwavering,” Celia said. “I think it’s the most authentic way to tell stories.”
According to Celia, watching movies in VR frees the viewer from the distractions that plague other viewing experiences—the bright phone screen won’t hog your attention, and you literally have no visible surroundings to distract you. “When you consciously choose to put on the headset, view the content, and interact with it, it’s truly transformative, almost meditative,” Celia said.
Immersive cinema isn’t just a new way to show old films; it’s a new, emerging medium; filmmakers are inventing a new language. Whether it’s a 360-degree view of Steve Martin’s SNL monologue , narrative VR series like Eli Roth’s A Faceless Lady , or interactive documentaries like D-Day: Soldier with a Camera , artists are using virtual reality to tell stories in entirely new ways. “We’re all obsessed with the idea of being able to live and breathe history,” Celia said. “It’s what drives us all to create increasingly immersive, impactful, and influential experiences.”
Virtual reality games are still great.
Visionary experiences are great, but most people buy VR headsets to play games . The news that Meta is closing three of its AAA game development studios —Armature, the studio behind Resident Evil 4 for VR; Sanzaru, the studio behind Asgard’s Wrath ; and Twisted Pixel, the creators of Deadpool VR —may indicate that VR gaming is on the brink of extinction. Or perhaps it’s simply the growing pains of the gaming industry trying to figure out what works in a new medium.
Resolution Games, a studio specializing in virtual reality games, appears to have found its secret to success. The company has grown steadily since its founding in 2015, selling millions of games despite stiff competition . Its flagship game, Demeo, has received rave reviews from critics , and it has also partnered with Wizards of the Coast on Demeo x Dungeons & Dragons: Battlemarked .
“We’re very conservative in our approach to managing our funds and deploying them very efficiently,” said Tommy Palms, CEO of Resolution. “In this space, where successful projects are few and far between, and they typically don’t generate as much profit as in other ecosystems, this is essential.”
No matter how cautious management is, no game studio will survive if its games are of poor quality, and Resolution’s games are very good, often in ways that seem at odds with our expectations of VR gaming. “A big, grand virtual world, like Cyberpunk or Grand Theft Auto, but you’re inside it… we now know that in reality, unfortunately, that’s not a very comfortable experience,” Palms said.
Instead of an immersive world, Demeo places players at a gaming table in a virtual basement with friends. You’re not in a dungeon; you’re a person playing a dungeon game. “This creates a much more social environment overall because it increases the likelihood that you’ll play with your friends,” Palms explained. “You’re doing something together, solving a problem, or focusing on something else; you’re just with your friend.”
I looked at Horizon Worlds on Meta and it seems completely empty.
Speaking of friends, if Mark Zuckerberg’s original vision for the Metaverse was about connecting people, it was about connecting. “Feeling genuinely present with another person is the ultimate dream of social technology. That’s why we’re focused on building it,” Zuckerberg wrote in his 2021 Founder’s Letter .
At the heart of this concept wasHorizon Worlds , a digital ecosystem designed to attract a billion inhabitants and hundreds of billions of dollars in digital commerce. Nearly five years have passed since its launch, and the total cost of running Horizon Worlds likely exceeds the GDP of many small countries, so I wanted to check out how things were going; getting to know such a strange environment was more than enough motivation to put on my good old computer and explore it for a bit.
In 2026, Horizon Worlds feels like a dead game. But it’s dead in its own way. Tens of thousands of “worlds” created by both users and corporations are shiny, vibrant, and open to exploration, but few people care. The random selection of worlds is like strolling through an abandoned mall—stuff, but no people. If you enjoy “edge spaces,” you’ll never be without them. Nevertheless, like the headsets it’s played on, Horizon Worlds is truly great.
Imagine Office World —an official recreation of the Dunder Mifflin office from The Office , right down to the desk knick-knacks. You can wander into Michael Scott’s office and play games on his computer, sort mail for Schrute Bucks, or head downstairs to explore the warehouse. Office World is full of the kind of cleverly written details that should attract throngs of devoted Office fans to meet and socialize. But it doesn’t. In the half hour I spent in Office World at 2:00 PM on a Tuesday , the number of visitors never exceeded five. It feels lonely, like a water cooler devoid of coworkers, or like an empty movie set with no one to yell “Action!”
I had a similar experience in Blumhouse Horrorverse —an atmospheric, eerie forest glade surrounded by creepy buildings. It’s chock-full of things to see and do for fans of Blumhouse titles like M3GAN , The Purge , and The Black Phone. You can play a game where you’re locked in a mansion with a player-controlled villain, or hunt for hidden Easter eggs to unlock a signature M3GAN dress for your avatar. But the forest was so quiet. The few people I encountered were either very young children—the “squeakers” that haunt every corner of Horizon Worlds—or newcomers who wandered around silently and then vanished like ghosts.
But I found signs of life in the digital ruins.
I was about to end my virtual safari when I decided to peek into one last world. A search for “over 18” (damn those squeaky squeaky words!) led me to the Soapstone Comedy Club . I’m glad I stopped in. The place is lively. They have a busy program of upcoming stand-up shows, quizzes, improv, and karaoke—and, most importantly, people are hanging out there. After logging in, a friendly volunteer introduced herself, and soon I was chatting about life, both online and offline, with a bunch of new friends on the virtual comedy club’s terrace.
“If you’d told me 10 years ago that I’d be known as ‘The Unemployed Alcoholic’ and that I’d own a fictional comedy club in cartoonland, I wouldn’t have believed you,” Aaron Sorrells, known online as “UnemployedAlcoholic,” told me. “And I certainly wouldn’t have believed I could convince my wife of the idea,” he added.
While recovering and unemployed, Sorrels watched the now-infamous Facebook Connect event in 2021 to launch the Metaverse, and instead of mocking it for its legless avatars, Sorrels was inspired. “It almost sounds like a joke,” Sorrels said, “but I heard about the Metaverse, specifically Horizon Worlds , and I thought, ‘I need to get in there.'”
With no programming experience, Sorrels built Soapstone from scratch, building a career for himself, providing paid gigs for others, and, most importantly, a place where people could feel part of a community, just as Zuckerberg envisioned. “I came here to create a comedy club, and what it ended up being is more than just a comedy club. It’s a community of people who have embraced Soapstone as their own place,” Sorrels said. “It’s not a corporate place, and it’s not someone else’s place. It’s their place.”
“At Soapstone, I can host a show, take the stage, and instantly connect with friends and family members living thousands of miles away, as if they were right there in the same room,” explained Soapstone Community Manager LollyDi. “This is especially important for people with anxiety disorders, physical disabilities, or those who live far from crowded places. For many of them, Soapstone Comedy isn’t just entertainment; it’s their social space and sense of community.”
So, is virtual reality dead?
Sorrells certainly doesn’t think virtual reality is dead. “There are dynamic and exciting things happening in virtual reality every day, every minute of every day,” Sorrells said. “I remember what Mark Zuckerberg said four years ago… he said it’s a 10-year process. We’re not even halfway through it.”
VRChat’s loud, anarchic atmosphere is too aggressive for me, but around 40,000 (mostly young) people use it to communicate every day. Big Screen has a healthy user base among VR moviegoers who watch 2D and 3D films. People virtually battle each other 24/7 in Thrill of the Fight 2. I could go on, but you get the point: VR may not be a hit, but dedicated communities are thriving in all corners of the metaverse.
In 2026, the “Next Chapter of the Internet” version of the Metaverse, where we all live, work, and buy digital sneakers, is something of a ghost town. But a more sustainable, organic space is taking root. Virtual reality isn’t a second world; it’s a set of specialized tools for specific hobbies—a private IMAX theater for a cinephile, a global open mic night for aspiring comedians, a tactical tabletop for D&D fans. Virtual reality isn’t everything to everyone, but it is something to some, and there’s nothing more alive than that.