But, on the positive side, Rubin noted that Oculus is "still absolutely committed to growing the VR film and creative content ecosystem", adding that Oculus a year ago committed an additional $250 million to fund VR content from developers around the globe, helping to spawn games such as Robo Recall, Rock Band VR and Follow My Lead.
Past year marked its high-point as it won an Emmy for Outstanding Original Interactive Programme for its short, Henry.
Oculus says they're earmarking $50 million-of the $250 million they recently committed to invest in VR content-exclusively for external investments in "non-gaming, experiential VR content".
"We're still absolutely committed to growing the VR film and creative content ecosystem", Rubin assured. In 2014, Facebook acquired Oculus VR. It also developed Quill, a virtual reality painting app originally created for Dear Angelica.
Never mind that there's nothing natural or social about the solitary confinement of an Oculus eye prison, the fact is that people aren't buying it. VR hardware and software sales have been underwhelming, with the possible exception of Sony's PlayStation VR. Since the past few months, Oculus has been getting closer with its parent company Facebook.
It said the closure of the studio did not mean it was abandoning movies and films made for VR.
Word is still unknown of the genre of experimental VR content Facebook will continue developing in the future. A Texas jury found that Oculus co-founder Palmer Luckey failed to comply with a nondisclosure agreement and the company infringed on copyright.
"This money will go directly to artists to help jumpstart the most innovative and groundbreaking VR ideas", Rubin said.
The Story Studio team built some of the most visually exciting and technically progressive VR experiences we've ever seen.
Indeed, Facebook's decision comes on the heels of CEO Mark Zuckerberg's speech at the F8 developers conference signalling more of a focus on augmented reality, which can be executed effectively using only a smartphone, for example.