“For you know what they say…. if the wolves come out of the walls, then it’s all over.” Neil Gaiman’s 2003 children’s book “The Wolves in the Walls” is dark, a bit scary and full of plot twists.

Perhaps that’s why it’s only fitting that the story is at the center of a different kind of plot twist for the creative virtual reality (VR) community: “Wolves in the Walls VR” was one of the last projects that the Oculus Story Studio team was working before Facebook shuttered its award-winning in-house VR storytelling unit in May.

But the Story Studio team couldn’t quite accept that it really ought to be all over for their Gaiman adaptation. Most of them stayed together, and quietly continued to work on the project, securing the blessing and additional funding from Oculus. The result of that cooperation, a first chapter “Wolves in the Walls VR,” will premiere at the Sundance Film festival in January. Two additional chapters are currently in planning as well, but there’s no word on their release date just yet.

Like the original children’s book, “Wolves in the Walls VR” follows the story of Lucy, an imaginative child that hears wolves crawling in the walls of the family’s home. Only, in this adaptation, the viewer becomes an active participant, an imaginary friend that comes to live after being drawn by Lucy — an interesting twist on the agency problem in VR.

“No​ ​one​ ​has​ ​yet​ ​cracked​ ​what​ ​the​ ​promise​ ​of​ ​storytelling​ ​in​ ​VR​ ​is:​ ​How​ ​to​ ​organically​ ​combine​ ​a​ ​compelling​ ​and emotional​ ​story​ ​with​ ​interactive​ ​worlds​ ​and​ ​characters,” said executive producer Saschka Unseld in a media release. “‘​Wolves​ ​In​ ​The​ ​Walls’​ ​will​ ​be​ ​exactly​ ​that.”​

The book version of “Wolves in the Walls” used a dark and busy collages from illustrator Dave McKean. For the VR adaptation, the former Story Studio group teamed up with New York-base immersive theater company ​Third​ ​Rail​ ​Projects to develop the story’s choreography. It was directed by ​Pete​ ​Billington​, who hails from DreamWorks Animation, and produced by ​Jessica​ ​Shamash, previously with Pixar.

In addition to its animation studio roots, the team also worked with a number of game developers on “Wolves in the Walls VR” to add interactivity to the story. This led to a piece in which the main character reacts to the viewers actions, and even is capable of passing objects back and forth — a new level of interactivity that goes far beyond Story Studio’s award-winning short film “Henry,” said Billington.

“After​ ​Henry,​ ​we​ ​knew​ ​that​ ​we​ ​wanted​ ​to​ ​created​ ​a​ ​deeply​ ​interactive​ ​character.​ ​Something​ ​that​ ​wasn’t​ ​passive​ ​or bound​ ​to​ ​the​ ​rectangular​ ​format​ ​of​ ​traditional​ ​media,” he said. Added Shamash: “Lucy​ ​was​ ​our​ ​friend.​ ​We​ ​cared​ ​for​ ​her.​ ​She​ ​felt​ ​more​ ​than​ ​a​ ​3D​ ​character.”

The result apparently blew Gaiman away: “I​ ​loved​ ​feeling​ ​with​ ​VR​ ​ ​that​ ​my​ ​brain​ ​was​ ​being​ ​fooled:​ ​that​ ​I​ ​had​ ​left​ ​my​ ​body​ ​behind.,” he said. “​Everything​ ​felt​ ​very​ ​simple,​ ​as​ ​if we​ ​were​ ​watching​ ​the​ ​first​ ​films,​ ​or​ ​hearing​ ​the​ ​first​ ​recorded​ ​music,​ ​but​ ​there​ ​was​ ​no​ ​doubt​ ​that​ ​everything​ ​had​ ​the potential​ ​to​ ​be​ ​very​ ​very​ ​different.”​

There’s no word yet on what the new Story Studio is actually called, and whether the group will stay together to produce any other experiences beyond “Wolves in the Walls VR.” We may learn more about that at Sundance, but probably shouldn’t be surprised about a few more plot twists.