The launch of Android XR, a newly announced headset from Valve, and major strategic shifts at Meta, are just the start of what made 2025 a significant year for the XR industry at large. 2026 will mark the 15th year that we’ve been following this XR journey here at Road to VR. With the context that comes with that long-term perspective, it’s once again time to reflect on the biggest stories of the last year and to talk about what’s on the horizon.

Meta Makes Aggressive Cuts as It Shifts XR Strategy

Image courtesy Meta

In early 2025, Meta CTO Andrew Bosworth issued a memo calling it a ‘make or break’ year for the company’s XR ambitions.

“This year likely determines whether this entire [XR] effort will go down as the work of visionaries or a legendary misadventure,” Bosworth wrote.

Well, by early 2026 it’s looking like “legendary misadventure” takes the cake.

Apparently not seeing the growth and traction it wanted, Meta is making an aggressive shift in its XR strategy. The last few days have seen reports of multiple first-party VR studios being cut down to size or outright shuttered. The company’s business-focused virtual collaboration space, Horizon Workrooms, is being shut down, and more. In total, the company is said to be cutting roughly 10% of its entire Reality Labs division as it shifts focus away from VR and “metaverse” efforts.

What it Means for 2026

It’s going to take a while for the dust to settle on this, and it probably won’t be until Q2 that the company shares a clear vision for what it hopes to accomplish with the cuts and new direction.

From what I’m seeing and hearing, it sounds like Meta isn’t exiting the XR space, but it’s shifting focus more strongly toward the glasses end of the spectrum, while doing away with the notion that building a “metaverse” (a digital space where people would gather, play, and work) is a strategic imperative.

Rather, it looks like Meta will continue to run its XR headset platform and let it evolve naturally rather than trying to place big content bets or force the metaverse into existence. Meanwhile, the company is said to be focused on boosting production of its smart glasses to serve growing demand.

Although that likely means a greater focus on smart glasses and AI assistants for the time being, it’s clear that the company’s end-goal is (and has been) to evolve its smart glasses into full-blown augmented reality glasses over time. In fact, Meta showed an early vision of this end goal back in 2024 with the Orion prototype. The 2025 release of the Ray-Ban Display glasses, and the ‘neural band’, was a clear step toward that goal.

Ray-Ban Display is still just a pair of smart glasses (ie: a small field-of-view and a static display with no tracking). But already the company that makes the waveguide in Meta’s glasses says it has a much larger 70° field-of-view waveguide that’s ready for production.

For many years I’ve explained that the industry has been working on the challenge of compact and affordable XR devices from two sides. On one hand, the industry has started by packing a wishlist of features into a bulky headset, and then trying to make it smaller. On the other hand, the industry is starting a tiny glasses-like package, and then trying to add back all the features enjoyed by the bulkier headsets.

Meta has mostly focused on the former (headsets), but it’s now shifting focus to the latter (glasses). The end goal, however, remains the same: an affordable and comfortable device that can digitally alter the world around you.

This big shift isn’t just a big deal for Meta, it’s a big deal for the whole industry. Meta has been dominant in the space for years, thanks in a big part to being able to out-price the competition and attract developers, thus building the leading standalone headset platform. With its standing in the industry, Meta has been able to direct much of what has happened within the industry, either explicitly or implicitly.

If Meta is pulling back on its VR and metaverse initiatives, the door may open for another company to take over its influential role. Or, the space might settle into a new equilibrium with a renewed competitive landscape, which has long been suffocated by Meta.

All we can say for certain is that 2026 will be a year of major realignment as the industry figures out how hands-on Meta plans to be with its VR platform going forward.

The Biggest Year in Recent History for XR Hardware

Photo by Road to VR

2025 turned out to be a huge year for XR hardware launches and announcements.

Google finally revealed and launched Android XR, a direct competitor to Apple’s VisionOS. Samsung launched the first Android XR headset, Galaxy XR, a direct competitor to Apple’s Vision Pro.

Apple also launched a new version of Vision Pro with an upgraded processor and (finally) an improved headstrap. And after years of rumors and speculation, Valve announced Steam Frame, its second-ever VR headset.

In parallel, we’re also seeing the rapid heating up of the smart glasses and AR glasses space.

Meta launched updated versions of its smart glasses, i...

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