The organization claims it ‘never fully understood how to turn Rec Room into a consistently profitable venture.’
The organization claims it ‘never fully understood how to turn Rec Room into a consistently profitable venture.’
Rec Room, a social gaming platform similar to Roblox that allows users to craft games and experiences for others to engage with, is set to close on June 1st. Although it has attracted over 150 million players and creators and, at its peak, was valued at $3.5 billion, the organization states in a blog update that “we never fully understood how to turn Rec Room into a consistently profitable venture” and that “our expenses consistently outpaced the income we generated.”
The organization further mentions that “given the recent changes in the VR landscape, coupled with broader challenges in gaming, the journey towards profitability has become sufficiently difficult that we’ve made the tough choice to cease operations.” Rec Room cut its workforce by 50% in August, and shortly after those layoffs were made public, Rec Room CEO and co-founder Nick Fajt stated that conducting the layoffs at that time “allowed us to support individuals while positioning Rec Room for years rather than mere months of funding.”
Rec Room is not the only social gaming service to face difficulties recently. Beginning in June, Meta’s Horizon Worlds will not receive new VR experiences as the company pivots the platform’s focus towards mobile. Last week, Epic Games laid off over 1,000 employees due to a “decline in Fortnite engagement” which meant the company was “incurring significantly more expenses than we are earning,” as stated by CEO Tim Sweeney.
