Popular virtual reality social platform and Roblox competitor, Rec Room, is shutting down on its 10th anniversary due to high costs and revenue issues, the company said.

What to know about Rec Room shutting down

Rec Room is a VR hub where gamers from across the world can play with one another or with their friends, hang out, explore millions of player-created rooms and customize their avatars. The platform has attracted more than 150 million players and creators, but has struggled financially to keep it running, according to its website, IGN and The Verge.

“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,” the company said in a Monday blog post.

“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’ve made the difficult decision to shut things down,” the team added.

“We’re 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.”

What does this mean for Rec Room gamers?

Starting June 1, gamers will no longer be able to log into or play Rec Room. The rec.net site will go offline, and online services related to Rec Room Studio will no longer be available, according to the blog post.

The company has also provided the following updates to its gaming community as it prepares to shut down:

  • Users can no longer create new accounts or add friends.
  • Sign-ups for Rec Room+ have been discontinued. However, users with an active RR+ membership will have their subscription extended through June 1.
  • The RR+ requirement for the Partnered Creator program has been removed, allowing anyone with sufficient tokens to cash them out. New registrations for the Partnered Creator program will end on May 1.
  • Users will no longer receive token rewards, such as those distributed at the end of Rec Room Originals. They can also no longer create new monetized user-generated content, including room inventory items and offers, room keys, consumables, currencies and avatar items, both in-game and through Avatar Studio.
  • The Room Rewards program has ended, with March rewards scheduled to be paid out in early April. Additionally, users can no longer purchase or receive new Roomie Energy.

Rec Room started company layoffs in August

Rec Room CEO and co-founder Nick Fajt shared in an Aug. 25 blog post that the company had laid off half its team to keep it afloat.

“Today’s tough decision means we can keep supporting and building Rec Room to its full potential. Ultimately, that is why we are doing this,” Fajt wrote in the post.

Two days later, Fajt shared another post, revealing the company’s financial and revenue issues. He said that while the company didn’t run out of money, it was “spending too much money,” which ultimately led to layoffs. “Our spending got out of sync with our revenue and our growth.”

“We had a really big team and an ever bigger vision. But we weren’t hitting that vision. And we were spending a lot of money not hitting that vision, and in doing so, we were also frustrating a lot of you. It was not a good situation,” Fajt continued.

As the shutdown nears, Rec Room shared a thank-you message to its gaming community after 10 years in business.

“On behalf of the team we’d like to thank you for being a part of the Rec Room community and helping us create a fun and welcoming place for players from all walks of life over the past ~10 years. Your boundless creativity and enthusiasm has been a source of great inspiration and joy. We wish we could have found a way to keep things rolling, but unfortunately this is the end of the road,” the company said.