Meta has paused efforts to license its VR operating system to outside hardware makers, marking a notable retreat from what was once pitched as a major step toward an open, multi-manufacturer VR ecosystem.

Instead, the company says it will concentrate its resources on building “world-class first-party hardware and software,” a move that reflects both internal pressures and broader shifts across the virtual and mixed reality industry.

“We have paused the program to focus on building the world-class first-party hardware and software needed to advance the VR market,” a Meta spokesperson said.

“We’re committed to this for the long term and will revisit opportunities for third-party device partnerships as the category evolves.”

The programme, announced in April 2024, would have allowed third-party companies to build VR headsets powered by Meta’s Quest operating system, which was rebranded at the time as Horizon OS.

Partners such as Lenovo and Asus were named early on, and the initiative was framed as a way to expand consumer choice, grow the developer base, and accelerate adoption by creating something akin to Android’s role in smartphones.

Less than two years later, that vision is on hold.

The decision comes during a period of reassessment inside Meta’s Reality Labs division, which oversees VR, AR, and metaverse-related products.

According to Business Insider, Meta has delayed a pair of mixed reality glasses codenamed “Phoenix” from the second half of 2026 to early 2027.

The company is also reportedly exploring cuts of up to one-third of its metaverse budget next year, while shifting some investment toward AI-driven glasses and wearables.

From “Open Model” to Tightened Focus

When Meta unveiled the third-party Horizon OS programme, it positioned the move as foundational to the future of computing.

CEO Mark Zuckerberg described an “open model” where headsets, smart glasses, and metaverse software would be built by many companies on a shared platform.

The idea echoed strategies Meta has used elsewhere, particularly its embrace of open-source software and its long-standing interest in reducing dependence on closed ecosystems controlled by rivals.

Pausing the programme does not necessarily signal that Meta has abandoned that ambition entirely.

But it does suggest the company sees greater near-term value in controlling the full hardware-and-software stack – something it already does with the Quest line – rather than spreading its OS across devices with varying designs, price points, and performance characteristics.

That trade-off is familiar in consumer technology. Open platforms can grow quickly but are harder to manage, while vertically integrated approaches offer tighter control and clearer differentiation.

For VR, where user experience remains fragile and hardware trade-offs are still significant, Meta may be betting that consistency matters more than breadth, at least for now.

Industry-Wide Implications

Meta’s pause has implications well beyond its own product roadmap. The VR and mixed reality industry has spent years searching for a breakout moment, but adoption remains uneven.

Headsets are still expensive, bulky, and often lack compelling everyday use cases outside gaming, training, and niche professional applications.

A licensed Horizon OS ecosystem could have lowered the barrier for hardware makers looking to enter the market without building an operating system, app store, and developer tools from scratch.

With that path temporarily closed, those companies face fewer options – and higher costs – if they want to compete.

This may further concentrate power among a small number of players who already control both hardware and software.

Meta remains a dominant force in consumer VR thanks to the Quest 2 and Quest 3, while Sony continues to pursue a console-tethered strategy with PlayStation VR2.

Apple, meanwhile, has entered the high end of the market with the Vision Pro, emphasising premium hardware, spatial computing, and deep integration with its broader ecosystem.

Each of these companies has chosen a tightly controlled, first-party approach. Meta’s decision to pause third-party licensing brings it closer to that model, even as it continues to talk about openness in the long term.

What Competitors Are Doing

Apple’s Vision Pro represents the most vertically integrated approach in the space, combining custom silicon, proprietary software, and a tightly curated developer environment.

While its high price limits mass adoption, Apple has made it clear that it prioritizes control and polish over scale.

Sony, by contrast, leverages its existing PlayStation ecosystem. PS VR2 is designed primarily for gaming, tightly coupled with the PlayStation 5, and does not aim to be a general-purpose computing device. That focus allows Sony to deliver high-end experiences without competing directly with standalone headsets.

Other players, such as HTC with its Vive lineup and Pico (owned by ByteDance), have experimented with different combinations of enterprise, consumer, and regional strategies.

Pico, once seen as a potential challenger to Meta outside the US, has reportedly scaled back some consumer ambitions amid broader market softness.

In this context, Meta’s move suggests caution.

Rather than trying to expand the ecosystem outward, the company appears intent on shoring up its core products while reassessing where growth is most likely to come from.

A Market Still Searching for Momentum

The pause also highlights ongoing uncertainty about the future of the metaverse concept itself.

While VR remains a key pillar of Meta’s long-term strategy, enthusiasm across the industry has cooled compared to the peak hype of the early 2020s.

Consumer interest has proven more incremental than explosive, and many companies are now emphasising mixed reality, AI integration, and lightweight wearables as more practical stepping stones.

Meta’s reported shift of resources toward AI glasses and wearables fits that pattern.

Smart glasses that enhance daily life without fully immersing users in virtual worlds may offer a clearer path to mass adoption, even if they lack the futuristic appeal of full VR.

For developers, Meta’s decision may be a mixed signal. On one hand, a stronger focus on first-party hardware could mean more consistent platforms and better tooling. On the other, the delay of a broader Horizon OS ecosystem limits potential reach and diversification.

Looking Ahead

Meta has left the door open to reviving third-party device partnerships in the future, framing the pause as a strategic refocus rather than a cancellation.

Whether that happens will likely depend on how the VR market evolves – and whether Meta’s own hardware can drive the next wave of adoption on its own.