Cloudhead Games Lays Off 70% of Staff After Landing in an ‘Impossible Position’

by

Cloudhead Games, a developer focused on virtual reality, recently announced a major company restructuring. Starting January 7th, this will unfortunately involve laying off 70% of their employees. In a statement, CEO Denny Unger explained that a combination of challenges had put the company in a very difficult situation.

Honestly, VR’s been struggling for a few reasons. Getting money for VR projects is tough, there are still some big hurdles to making it really take off, and the whole gaming market has just been a bit slow lately. It’s a combination of things holding it back.

Cloudhead Still Wants to ‘Transform Humanity’

The post on social media from Cloudhead’s CEO was an emotional one:

We’re sad to see this team go – they were highly skilled professionals and genuinely great people. We’re proud of the supportive and passionate culture we built together, where everyone cared deeply about both creating amazing VR content and helping each other succeed.

I’m really sad to see some amazing people leave our studio. They genuinely cared about their work, especially when we tackled new and challenging projects, and we’re all going to miss them a lot. We’re trying to help them find new opportunities, so if your team is hiring, please check out the link below to our spreadsheet – you won’t regret reaching out to these talented folks!

The statement explained that the studio needs support to succeed, and pointed to declining investment in virtual reality technology and software as a major reason for recent layoffs.

For the past 14 years, Cloudhead has navigated the challenges of the Virtual Reality industry. We still strongly believe in VR’s potential – it’s a powerful new way to connect and experience things that could one day change the world. We’re confident VR will become mainstream with future all-in-one devices, and Cloudhead is committed to being a leading studio when that happens.

Cloudhead is currently developing a new, unannounced game. They’re also known for creating popular titles like Pistol Whip, Aperture Hand Lab (made with Valve), and The Gallery series.

Cloudhead Games was among the first game studios to announce layoffs in 2026. The company notes that the gaming industry is currently facing a slowdown and significant changes, suggesting more studios may follow suit.

MOBILE APP

Level Up Your Gaming News

Real-time news, exclusive podcasts, push alerts, and a better reading experience.
Available on iOS & Android

App Store

Google Play

Read More

2026-01-06 11:49