In an apparent setback for VR filmmaking, Oculus has abruptly announced that it will shut down its Story Studio division, founded in 2014 to create examples of VR narratives for filmmakers interested in making 360 video content.

The studio’s first project, “Lost,” premiered at the Sundance Film Festival in 2015. That was followed by the Emmy-winning “Henry” in 2016 and “Dear Angelica,” which premiered at Sundance in January of this year. The once-forthcoming “The Wolves in the Walls,” an adaptation of a story by American Gods author Neil Gaiman, has reportedly been canceled.

The VR film “Dear Angelica” was created by Oculus Story Studio.

Instead of creating its own content, Oculus said it will provide financial resources to the tune of $50 million to third parties looking to develop “non-gaming, experiential VR content.” There was no immediate indication of how Oculus would select filmmakers to receive those funds.

“After careful consideration, we’ve decided to shift our focus away from internal content creation to support more external production,” said Oculus VP of Content Jason Rubin in s blog post announcing the decision. “As part of that shift, we’ll be winding down Story Studio. Now that a large community of filmmakers and developers are committed to the narrative VR art form, we’re going to focus on funding and supporting their content. This helps us turn our internal research, development, and attention towards exciting but unsolved problems in AR and VR hardware and software.”

Oculus tried to put a positive spin on the decision, but it’s hard to see it as a vote of confidence in the new medium. If anything, it reinforces a general feeling of sluggishness in the industry. Earlier this year, U.K. researcher CCS Insight revised its estimates for VR headset sales downward by 40 percent, estimating 1.2 million were sold in 2016 rather than the expected 2 million.