Schell Games cut about 10 percent of its staff in late August — the Pittsburgh studio’s first layoff in 24 years — and CEO Jesse Schell says the rebalance is about project mix, not an exit from VR. After the cuts the company employs roughly 125 people. Headset VR, once about 80 percent of the work, is now closer to 30 percent, with more effort going into smaller titles and VR-adjacent location-based entertainment.
The news broke through LinkedIn posts from staff, then landed in trade coverage. Game Developer tracked employee posts that named marketing, art, design, and visual-effects roles among those affected. Good Virtual Reality published Schell’s full statement on Aug. 24. Road to VR and UploadVR followed with the VR-industry frame.
What Schell said
In the statement to Good Virtual Reality, Schell wrote that the studio had been “working on a smaller number of larger titles,” then concluded that “working on a greater number of smaller projects is what will be sustainable,” which “requires a different balance of team members than we had.” He called the decision difficult and said the company “lost some really great people.”
He was explicit that VR is not gone: “We have a new VR title in production right now, and have proposals in place for a few others.” The growth edge he named is “VR adjacent” work — interactive projection and location-based entertainment — which he called “a growing trend.”
That framing matters because Schell has spent years arguing against layoffs as a management tool. In a 2024 GamesIndustry.biz interview widely requoted this week, he said the studio preferred to put cash at risk on games rather than jobs. The August cut is the first time that rule bent.
The catalog behind the name
Schell Games is best known in VR for the I Expect You To Die trilogy and for Among Us VR, later expanded to flatscreen as Among Us 3D and handed back to Innersloth earlier this year. Other headset titles include Silent Slayer: Vault of the Vampire and the hybrid free-to-play party game Project Freefall. The studio also works in education and out-of-home XR.
Why it lands now
UploadVR lists Schell beside other 2026 VR studio cuts: Polyarc, Mighty Coconut, Kluge Interactive, and nDreams among them. Road to VR ties the same climate to Meta’s earlier studio closures and canceled Quest projects — including reported work from Sanzaru, Skydance, and Polyarc — plus shutdowns at Rec Room, Survios, and Vertigo Studios Amsterdam.
None of that makes Schell’s 10 percent cut a market forecast by itself. It does put a hard number on a studio that spent two decades refusing to do this, then chose a smaller, more diversified slate over a few large headset bets. For Metaverse Watcher readers tracking whether “VR games” still means a viable mid-size studio business, the useful line is Schell’s own: headset work is still active, just no longer the majority of the floor.
Sources: Good Virtual Reality, Road to VR, UploadVR, Game Developer.