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Facebook Is Killing Its Virtual Reality Film Studio

Inside The 2016 E3 Electronic Entertainment ExpoInside The 2016 E3 Electronic Entertainment Expo
An attendee wears the Oculus Rift headset during the E3 Expo in Los Angeles on June 14.Photograph by Troy Harvey — Bloomberg via Getty Images

Facebook is getting out of the virtual reality film business.

The social networking giant said Thursday that its Oculus virtual reality unit would shut down Story Studio, a virtual reality film studio that debuted in 2015 with hires from big entertainment companies like Pixar. The studio’s closure is effective as of Thursday, said an Oculus spokesperson.

With the studio closure, Facebook will no longer make in-house VR shorts and animations, and will instead “support more external production,” Oculus vice president of content Jason Rubin wrote in a blog post.

Facebook created the studio to help jumpstart the nascent VR industry by creating its own VR films and make the technology more appealing beyond video gamers. Despite initial hype, virtual reality has failed to gain a big following, largely because of the expensive headsets required to watch the films and a lack of compelling content.

Sales of VR headsets like Facebook’s Oculus Rift and the HTC Vive, both of which went on sale a year ago, are slower than expected, analyst have said.

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Rubin said that Facebook is still “absolutely committed to growing the VR film and creative content ecosystem” and will dedicate $50 million from a recent $250 million VR investment to fund the production of non-gaming VR media.

“This money will go directly to artists to help jumpstart the most innovative and groundbreaking VR ideas,” Rubin said.

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Among the VR films produced by Story Studio was the Emmy-award winning animated short Henry and Dear Angelica, which premiered at the Sundance Film Festival in January.

Fortune contacted Facebook and will update this story if it responds.

Update: May 4, 7:00 PM PST

An Oculus spokesperson wrote in an email that Story Studio’s 50 employees “will reportedly have the option of either leaving the company to pursue new opportunities in the creative community, or applying for new jobs within Facebook.”

Oculus declined to comment on whether any of the films created by Oculus Studios will be released on other VR platforms now that the studio is closed.