Rec Room shuts down after decade and 150 million players

(Picture courtesy Rec Room.)

Rec Room, a Seattle-based social digital world that raised $294 million and briefly reached a $3.5 billion valuation, will shut down on June 1, 2026, the company announced yesterday. Snap Inc. confirmed the identical day that it has acquired choose property from the corporate.

“Regardless of this reputation, we by no means fairly discovered find out how to make Rec Room a sustainably worthwhile enterprise,” the corporate stated within the announcement. “Our prices at all times ended up overwhelming the income we introduced in.”

For the broader metaverse trade, the closure is one other stark reminder that person progress with no working income mannequin is just not a enterprise.

Snap picks up the items

Snap confirmed that it acquired choose property from Rec Room, and that some Rec Room staff shall be becoming a member of Specs Inc., the Snap {hardware} subsidiary engaged on its Spectacles augmented actuality glasses, according to GeekWire. Snap stated it was drawn to the Rec Room workforce’s experience in constructing social, multiplayer XR experiences.

Neither firm indicated that Rec Room can be revived at Snap in its present kind, GeekWire reported. Nick Fajt, Rec Room’s co-founder and CEO, stated he was “very pleased with the workforce,” grateful to the neighborhood, and enthusiastic about what’s subsequent.

From $3.5 billion to zero

Rec Room raised $145 million in its December 2021 Series F round, bringing its whole valuation to $3.5 billion, the corporate introduced on the time. The spherical was led by Coatue Administration, with Sequoia Capital, Index Ventures, and Madrona Enterprise Group additionally taking part. Whole funding throughout all rounds reached $294 million, according to research firm Sacra.

The corporate minimize workers twice earlier than calling it quits. In March 2025, Fajt introduced a 16 % discount in headcount, saying the corporate needed to cowl its personal prices with out counting on extra funding, according to a Rec Room blog post.

Then in August 2025, the corporate laid off half of its staff.

After the August layoffs, Fajt published an unusually candid breakdown of the corporate’s funds.

UGC income was rising 70 % 12 months over 12 months, Fajt stated on the time, however the economics had been punishing: when a participant purchased a UGC merchandise, Rec Room stored solely about 30 cents on the greenback after paying platform charges and creator cuts, in comparison with 70 cents on gadgets the corporate made itself, in response to that submit. He stated the corporate had runway projected into 2029.

It didn’t make it.

What’s shutting down — and when

Efficient instantly, Rec Room has stopped permitting new account creation, new pal additions, and new sign-ups for its Rec Room+ subscription service. After Might 1, gamers will now not be capable of buy tokens. After Might 18, creators will now not be capable of earn new tokens. A ultimate creator payout shall be processed on June 1, in response to the announcement.

On June 1, gamers will now not be capable of log in, the rec.internet web site will go offline, and on-line companies associated to Rec Room Studio will stop, the corporate stated. As a farewell gesture, the corporate discounted first-party content material by 80 % and unlocked many Rec Room+ subscription options for all customers at no cost.

Saving your creations

Creators can not obtain working copies of their rooms, however can export room and invention information in codecs appropriate with different instruments, comparable to Unity, permitting them to probably rebuild their work on different platforms, the corporate stated. That export function is out there solely by way of the Steam PC construct and was in ultimate inner testing as of the announcement, with availability anticipated inside a couple of week.

Gamers can obtain their photographs and a “ultimate report card” avatar memento.

A broader sample

The Rec Room closure comes as Meta retreated from its personal digital social platform. As of June 15, Quest headset customers will lose entry to Horizon Worlds fully and the power to create or publish VR content material will finish, leaving solely the cellular model of the app energetic. You may read more about it in our previous story here.

Rec Room had been making progress on its creator economic system earlier than the tip. In September 2025, the company announced that creators had earned greater than $1 million in a single quarter for the primary time — a milestone that had taken your complete 12 months of 2021 to succeed in when this system first launched.

My take-away from all this? That creators ought to be cautious of placing their eggs into one basket, particularly one with a closed, proprietary ecosystem. There’s a motive we’ve the World Vast Internet as a substitute of America On-line.

Will probably be good to see an open different for the metaverse. Perhaps, as soon as AI coding will get a bit higher, we will improve OpenSim for the brand new period?