Rec Room is calling it quits
Rec Room, the social gaming platform built around user-made games and experiences, is shutting down on June 1. That is a long way to travel for a company that, at its peak, said it had more than 150 million players and creators and was valued at $3.5 billion. Apparently, scale alone does not pay the bills. Who knew.
In a blog post, the company said it “never quite figured out how to make Rec Room a sustainably profitable business” and that “our costs always ended up overwhelming the revenue we brought in.”
Rec Room added that “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 made the difficult decision to shut things down.”
A difficult run, even by gaming standards
The decision follows a rocky stretch for the company. In August, Rec Room laid off half of its staff. A few days later, CEO and co-founder Nick Fajt said the timing of the cuts “gave us the ability to take care of people, while still setting up Rec Room for years, not months of funding.”
Rec Room is also part of a wider pattern: social and VR gaming platforms have been taking hits lately, not just making headlines and then somehow missing the revenue part.
- Starting in June, Meta’s Horizon Worlds will stop getting new VR experiences as Meta shifts the platform’s focus to mobile.
- Last week, Epic Games said it was laying off more than 1,000 employees after a “downturn in Fortnite engagement” left the company “spending significantly more than we’re making,” according to CEO Tim Sweeney.
For a sector built on the promise of endless digital worlds, the real world keeps showing up with very unhelpful math.
