I\u2019m in complete shock. Today I woke up, I went on X to interact with the XR community, and I immediately saw this post by Bradley:<\/p>\n
Rec Room is shutting down for good on June 1st<\/p>\n
\u201cWe never quite figured out how to make Rec Room a sustainably profitable business\u201d<\/p>\n
\u201cWith the recent shift in the VR market, along with broader headwinds in gaming \u2014 we’ve made the difficult decision to shut things down.\u201d pic.twitter.com\/LVkdQrykJi<\/a><\/p>\n \u2014 Brad Lynch (@SadlyItsBradley) March 30, 2026<\/a><\/p>\n I thought it was an April Fools post, but then I checked the date, and it was definitely too early for that. Googling around, I found that it is true, Rec Room is really shutting down for good.<\/p>\n Rec Room shuts down<\/p>\n The Rec Room team posted this message on its blog:<\/p>\n Rec Room will be closing down on June 1st 2026 at noon Pacific time.<\/p>\n Over the past decade, Rec Room grew into something amazing, reaching over 150 million players and creators along the way. Players made over half a billion friends on the platform. In total, people all around the world spent a cumulative 68 thousand years in Rec Room. The top UGC rooms saw over 500 years of play time each. That\u2019s a lot of people having a lot of fun.<\/p>\n What this community built together is incredible, and something we\u2019ll always be proud of. Even today, millions of people are showing up to spend time in this fun and welcoming place every month.<\/p>\n Despite this popularity, we never quite figured out how to make Rec Room a sustainably profitable business. Our costs always ended up overwhelming the revenue we brought in.<\/p>\n We spent a long time trying to find a way to make the numbers work. 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\u2019ve made the difficult decision to shut things down.<\/p>\n We\u2019re making this decision now, while we still have the ability to wind things down thoughtfully and do right by the people who built this with us.<\/p>\n The article (that I invite you to read) continues with various logistics about the shutdown. I\u2019ll just summarize it:<\/p>\n Starting from today, no one can sign up for Rec Room anymore<\/p>\n Already existing accounts will be able to access for free things that required a paid subscription, and have 80% discounts on content in the stores<\/p>\n Starting from May 18th, no one can earn any more tokens<\/p>\n On June 1st, there will be a full shutdown, with no one able to log in anymore<\/p>\n Regarding existing content, Rec Room is doing its best to let creators download what they created. Again, let me copy and paste to be more accurate.<\/p>\n For Players:<\/p>\n For Creators:<\/p>\n Unfortunately, you cannot download a working copy of your rooms. We know that would be ideal. But without the Rec Room servers operational that is not possible.<\/p>\n Instead, we are providing the ability to download your room and invention data in formats that can help you recreate the room elsewhere if you choose (e.g., as a standalone Unity app)<\/p>\n Room\/invention data downloads only work via the Steam PC build<\/a>, so please install that if you want to download room\/invention data.<\/p>\n Note: This functionality is in final internal testing and will be available in a Steam PC update ~one week from today. Room\/invention data downloads will be available until June 1st.<\/p>\n To download room and\/or invention data \u2013 follow the instructions here<\/a><\/p>\n The Rec Room team also created a nice farewell video:<\/p>\n Why is Rec Room shutting down?<\/p>\n Rec Room has always been considered an example of a successful \u201cmetaverse platform\u201d. When I was working on a platform for virtual concerts, we were all always looking at Rec Room as a virtuous example, as an application from which to copy some good concepts. And indeed it was very successful, and it still IS. In fact, in the farewell post, the team mentions that \u201cmillions of people\u201d are still playing in Rec Room every day. Then what is happening?<\/p>\n The reason is, as always, money. Rec Room has always been very popular, but like many other virtual world platforms, it has always had difficulties in turning this popularity into money. People enjoy the platform, but they are not bringing much money into it.<\/p>\n There was money going through it via the RR+ subscription and the elements sold in the store. According to Geekwire<\/a>, \u201cAs of last September, revenue from user-generated content was growing about 70% year over year, and creators earned more than $1 million in a single quarter for the first time.\u201d But this money was not enough: Rec Room had only a 30% cut on the various transitions. And even if $1M seems a lot of money, it is not enough to sustain such a big platform: having worked in the field, I can tell you that not only the employees\u2019 salaries, but also the cloud costs and the multiplayer costs are definitely more than that, if you have millions of users.<\/p>\n The recent crippling of the VR field made the rest. As I said in my latest newsletter episodes, all this recent narrative about \u201cVR is dead\u201d or \u201cthe metaverse is dead\u201d is creating a lot of pessimism in our field, and this is drying up investments, since investors will read that VR is dead and so will not invest in virtual worlds platforms anymore. So, finding money for Rec Room became more complicated.<\/p>\n At this point, they had to choose whether to shut down gracefully now, or wait until the last minute, hoping to get some money and go bankrupt if no money was coming. They chose the first option: that\u2019s why Rec Room is shutting down giving a heads up to all players, leaving them all the opportunity to download all the content and so on. I think it\u2019s been the right call to make.<\/p>\n It\u2019s still shocking, though, that a company that in December 2021, after its Series F, was valued at $3.5 billion, is now shutting down. <\/p>\n Snap reportedly acquired some Rec Room assets<\/p>\n According to a new article by Geekwire<\/a>, Snap has acquired some of the assets of Rec Room, and some people from the Rec Room team are moving to Snap. I have not found the news anywhere else, but it is reported as sure (and also with Snap confirming the news), and the website is a reliable one, so I trust this.<\/p>\n The report says that Snap has confirmed to have acquired \u201cselected assets\u201d from Rec Room Inc, and that also an unknown number of Rec Room employees are joining Snap. It is not clear what their purpose will be, but it seems that it is not the one to resurrect Rec Room, at least in its current form. It is interesting that these people will work at Specs Inc, the subsidiary of Snap working on smartglasses and AR glasses.<\/p>\n Snap said it was impressed with the Rec Room team\u2019s expertise in building social, multiplayer XR experiences, the industry term for virtual reality, augmented reality, and mixed reality technologies. So my guess is that they will probably work on creating social experiences or a multiplayer platform for the Spectacles glasses. Making multiplayer XR experiences is very complicated, so Snap made a good move by hiring a bunch of people with a huge expertise in the field.<\/p>\n As I\u2019ve said, I\u2019m in full shock. I think no one was expecting this.<\/p>\n It is well-known that virtual world platforms have a profitability issue, and in fact, many of them can survive only through investors\u2019 money. But usually, the most successful ones, like VRChat or Rec Room, have so many users that they have no difficulty in finding investors\u2019 money that can make them survive until they find a way to be profitable. And Rec Room was hugely successful. It was also not even a VR platform anymore, but it was available everywhere.<\/p>\n Probably given the negative moment for virtual reality and for gaming in general, Rec Room didn\u2019t manage to secure new investments because of the skepticism of investors in these technologies. Everyone is just doing AI shit now. And that\u2019s why it was forced to shut down.<\/p>\n The irony of this is that the shutdown of Rec Room is an earthquake that will create even more negativity around VR and virtual worlds, making it even more difficult to find money in the field. We are really in a bad spiral at the moment, and we all professionals in the field just have to enter into survival mode.<\/p>\n When I had to close my first startup, I wrote a long postmortem, and one of the main points was \u201ca startup is all about money\u201d. This is still a hard lesson for everyone making business: you can have a great product, a great team, but you need to focus a lot on how to make money since day 1. Otherwise, your company may eventually enter big troubles.<\/p>\n I really appreciate that the team decided to shut down gracefully now, and the fact that they are offering everyone the opportunity to download their creations shows how much they cared about their community. I\u2019m really sad that this is happening: the few people that I met from the Rec Room team were really nice and competent. The platform was also really good. I truly hope these professionals can find a new job, and that Rec Room users will find a new place where to meet their virtual friends.<\/p>\n Farewell, Rec Room, thanks for everything you did.<\/p>\n (Header image by Rec Room)<\/p>\n Disclaimer: this blog contains advertisement and affiliate links to sustain itself. If you click on an affiliate link, I’ll be very happy because I’ll earn a small commission on your purchase. You can find my boring full disclosure here<\/a>.<\/p>\n Share this with other innovators<\/p>\n \n\tRelated\n<\/p>\n