At noon Pacific today, the social gaming platform Rec Room officially ceases operations after a decade of service. The Seattle-based startup, founded in 2016 by ex-Microsoft engineers, garnered significant attention with a peak valuation of $3.5 billion in 2021 and raised $294 million in funding. However, it struggled to achieve profitability, leading to its closure announcement in March.
Over the years, the platform attracted approximately 150 million users who engaged in building virtual worlds and forming friendships. Rec Room's business model faced challenges, particularly with low profit margins from user-generated content; the company retained only about 30 cents of each dollar earned from player-created items after expenses were accounted for, compared to 70 cents from its own creations.
As a farewell to its community, Rec Room created tools allowing users to export their avatars and room data, ensuring that their creative efforts would not be lost. In a reflective video published prior to the shutdown, co-founder Nick Fajt expressed gratitude to the community for their decade-long journey, emphasizing the unique experience Rec Room provided.