Facebook has decided to pull the plug on its in-house Oculus Story Studio. The closure of the award-winning unit, which created short films for viewing on the Rift and Gear VR headsets, was announced in a blog post by Oculus' vice president of content, Jason Rubin.

"We've been looking at the best way to allocate our resources to create an impact on the ecosystem," Rubin wrote. "After careful consideration, we've decided to shift our focus away from internal content creation to support more external production. As part of that shift, we'll be winding down Story Studio."

Oculus Story Studio, which opened two years ago, was made up of both video game engineers and former employees from companies such as Lucasfilm and Pixar. Its first film, a short called Lost, debuted at the 2015 Sundance Film Festival. This was followed by Henry, an animated tale about a hedgehog who loved hugs. Oculus hoped the Emmy-winning Henry would convince filmmakers to use the tech and produce new content for its VR headsets.

More recently, the studio had been experimenting with 3D comics, showing off a series of virtual reality comic books at the Tribeca Film Festival.

Rubin writes that Oculus and Facebook will continue to support third-party VR content, having already invested $250 million last year on funding developers from around the world. "We're going to carve out $50 [million] from that financial commitment to exclusively fund non-gaming, experiential VR content," he wrote. "This money will go directly to artists to help jumpstart the most innovative and groundbreaking VR ideas."

Variety reports that all of the studio's 50 staff are being encouraged to apply for new jobs within Oculus, but all ongoing projects are being canceled.

With Best Buy closing 200 Oculus demo stations and the departure of co-founder Palmer Luckey, it seems the VR firm isn't having the best 2017.