Rec Room, a social gaming platform similar to Roblox, will be closing its doors on June 1st. Despite amassing over 150 million players and creators and reaching a valuation of $3.5 billion, the company has struggled to achieve sustainable profitability. In a blog post, the company admitted that their costs consistently exceeded their revenue, leading to the difficult decision to shut down.
The company cited challenges in the VR market and the gaming industry as contributing factors to their decision. In August, Rec Room laid off half of its staff in an effort to secure funding for the platform’s future. CEO and co-founder Nick Fajt emphasized that the layoffs were necessary to ensure the long-term viability of Rec Room.
