Rec Room, once considered a rising star in the social gaming realm, announced Monday it would be ceasing operations on June 1.
For those who enjoyed the platform or have engaged in its virtual environments, this announcement is likely disappointing. Over time, Rec Room amassed over 150 million users, becoming a key destination for social gaming, especially during the pandemic when people sought online connections.
Launched in 2016 by Nick Fajt and Cameron Brown, Rec Room attracted notable attention and funding, valuing the company at $3.5 billion in December 2021.
Despite having a large user base, Rec Room faced difficulties generating revenue. Operational costs climbed while income lagged behind. Even with a dedicated community and new additions like Maker AI for game development, financial issues led to substantial layoffs earlier this year.
“We spent a long time trying to find a way to make the numbers work,” the company noted in its Monday announcement. “But with the recent shift in the VR market, along with broader headwinds in gaming, the path to profitability has gotten tough enough that we’ve decided to shut things down.”
Effective immediately, new accounts or friend requests cannot be created. Creators can no longer distribute monetized content, and the platform will close at 12 p.m. PT on June 1.