New reports suggest that a Batman: Arkham Shadow sequel was in development but has now been canceled. These reports have surfaced just a day after widespread layoffs hit Meta's Reality Labs division, which resulted in the closure of three separate VR development studios, including Sanzaru Games, which was reportedly working on this Batman: Arkham Shadow sequel.
Technically the second Batman: Arkham VR game and the 10th entry in the Batman Arkhamverse, Batman: Arkham Shadow was released exclusively on the Meta Quest 3 and 3S in October 2024. Developed by Camouflaj, the same studio behind 2020's Marvel's Iron Man VR, Batman: Arkham Shadow received very favorable reviews upon launch, with many critics praising the game's ability to authentically capture the feel of the Rocksteady Batman: Arkham games in a new medium. Batman: Arkham Shadow earned a Game Award, New York Game Award, and a D.I.C.E. Award, and it currently has a 100% Critics Recommend rating on OpenCritic.
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Batman: Arkham Shadow Sequel Has Reportedly Been Canceled
On Monday, January 12, the New York Times reported that Meta planned to layoff 10-15% of the staff in its Reality Labs division in an attempt to shift away from Virtual Reality development and towards new augmented reality tech and AI. On January 13, Meta officially confirmed that it had closed three studios under its Reality Labs banner: Sanzaru Games, Armature, and Twisted Pixel. While Sanzaru is best known for developing Asgard's Wrath and its 2023 sequel (the highest-rated Meta Quest game), Armature delivered the acclaimed Resident Evil 4 Meta Quest 2 port, and Twisted Pixel has just released Marvel's Deadpool VR. Now a new report suggests there's even more tragic news to be found beneath these layoffs.
Aftermath reported on January 14 that, according to former Meta employees speaking to the outlet under anonymity, Sanzaru Games was working on a sequel to Batman: Arkham Shadow, and that following the studio's closure, the game is likely no longer in development. Aftermath's sources also told them that Camouflaj, the studio behind the original Batman: Arkham Shadow, had also been hit by the Meta layoffs, reportedly leaving "just a handful of employees" at the studio who are now tasked with working on the "new user experience" for upcoming Meta hardware.
On January 15, UploadVR published its own report corroborating Aftermath's claims. According to UploadVR's anonymous sources, a Batman: Arkham Shadow sequel was in the works at Sanzaru Games and that it's now been completely canceled following the studio's closure this week. UploadVR's report also confirms that Camouflaj has been hit severely by Meta's layoffs. According to UploadVR, just three VR studios remain active at Meta: Beat Games, BigBox, and Ouro Interactive.
Rumors of a Batman: Arkham Shadow sequel first surfaced in September 2025, when Commissioner Gordon actor Mark Rolston said during Fan Expo Chicago 2025 that "We're about to start another one of those." While development cycles can change from studio to studio and project to project, actors are usually brought into the booth at least a little way into development, which suggests that the alleged Batman: Arkham Shadow sequel would have been in full production by the time of its cancellation this week.
In its own reporting of these layoffs, Kotaku received confirmation from a Meta spokesperson that Camouflaj was affected by the layoffs but that it wouldn't be shutting down. Kotaku's report also includes a general statement from Meta regarding the layoffs across its Reality Labs division. The statement reads:
“We said last month that we were shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.”
Batman: Arkham Shadow
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OpenCritic Reviews
- Top Critic Avg: 86 /100 Critics Rec: 100%
- Released
- October 21, 2024
- ESRB
- T For Teen // Violence, Mild Blood, Language
- Developer(s)
- Camouflaj
- Publisher(s)
- Oculus
- Engine
- Unity
- Genre(s)
- Action, Virtual Reality
Source: Aftermath