Why Did Facebook Inc (NASDAQ:FB) Close Virtual Reality Film Studio?

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Facebook Inc (NASDAQ:FB) has shut down its Story Studio, a virtual reality (VR) film studio owned by the social media giant’s Oculus subsidiary.

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The studio, launched in 2015, hired experts from big entertainment companies to create a series of VR shorts and animations, including Lost, Henry, and Dear Angelica.

Facebook said it is closing the studio because it wants to shift its focus away from content creation to support “more external production.” The social networking giant intends to focus on funding storytelling projects by other people.

“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,” Oculus, which owned by Facebook, said in a statement.

The company said that many filmmakers and developers are now “committed to the narrative VR art form” and the company is going to “focus on funding and supporting their content.”

This will allow Facebook to explore “exciting but unsolved problems in AR and VR hardware and software.”

Facebook Inc (NASDAQ:FB) committed $250 million to fund VR content from various developers all over the world.

The investment supported games like Robo Recall, Rock Band VR, and Wilson’s Heart as well as VR experiences like Through the Ages from Felix & Paul and the Follow My Lead experience featuring the 2016 NBA finals.

Now, the company planning to use $50 million from that investment to fund non-gaming, experiential VR content.

Moreover, Oculus said that it will provide resources and programs to help creators get started, including video tutorials, production and distribution tips, and best practices for VR development.

Oculus has been facing a stiff competition from PlayStation VR and HTC Vive. Story Studio has about 50 employees at its office in Menlo Park, California. The affected employees will be offered “the option of applying for new jobs within Facebook,” according to a report from Los Angeles Times.

Shares of Facebook Inc (NASDAQ:FB) were trading up 0.44% on Monday.

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