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 corporate introduced yesterday. Snap Inc. confirmed the identical day that it has acquired choose belongings from the corporate.
“Regardless of this reputation, we by no means fairly found out easy methods to make Rec Room a sustainably worthwhile enterprise,” the corporate mentioned within the announcement. “Our prices all the time ended up overwhelming the income we introduced in.”
For the broader metaverse business, the closure is one other stark reminder that person progress and not using a working income mannequin isn’t a enterprise.
Snap picks up the items
Snap confirmed that it acquired choose belongings from Rec Room, and that some Rec Room workers will probably be becoming a member of Specs Inc., the Snap {hardware} subsidiary engaged on its Spectacles augmented actuality glasses, in keeping with GeekWire. Snap mentioned it was drawn to the Rec Room crew’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, mentioned he was “very happy with the crew,” grateful to the group, and enthusiastic about what’s subsequent.
From $3.5 billion to zero
Rec Room raised $145 million in its December 2021 Collection F spherical, 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, in keeping with analysis agency 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 further funding, in keeping with a Rec Room weblog submit.
Then in August 2025, the corporate laid off half of its workers.
After the August layoffs, Fajt printed an unusually candid breakdown of the corporate’s funds.
UGC income was rising 70 % yr over yr, Fajt mentioned on the time, however the economics have been punishing: when a participant purchased a UGC merchandise, Rec Room saved solely about 30 cents on the greenback after paying platform charges and creator cuts, in comparison with 70 cents on objects the corporate made itself, in keeping with that submit. He mentioned 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 buddy additions, and new sign-ups for its Rec Room+ subscription service. After Might 1, gamers will now not have the ability to buy tokens. After Might 18, creators will now not have the ability to earn new tokens. A ultimate creator payout will probably be processed on June 1, in keeping with the announcement.
On June 1, gamers will now not have the ability to log in, the rec.internet web site will go offline, and on-line providers associated to Rec Room Studio will stop, the corporate mentioned. 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’t obtain working copies of their rooms, however can export room and invention information in codecs suitable with different instruments, resembling Unity, permitting them to doubtlessly rebuild their work on different platforms, the corporate mentioned. That export characteristic is obtainable solely by the Steam PC construct and was in ultimate inside testing as of the announcement, with availability anticipated inside a few 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 completely and the power to create or publish VR content material will finish, leaving solely the cellular model of the app energetic. You may learn extra about it in our earlier story right here.
Rec Room had been making progress on its creator economic system earlier than the tip. In September 2025, the corporate introduced that creators had earned greater than $1 million in a single quarter for the primary time — a milestone that had taken the complete yr of 2021 to achieve when this system first launched.
My take-away from all this? That creators needs to be cautious of placing their eggs into one basket, particularly one with a closed, proprietary ecosystem. There’s a cause we’ve got the World Vast Net as an alternative of America On-line.
It is going to be good to see an open different for the metaverse. Perhaps, as soon as AI coding will get a bit higher, we are able to improve OpenSim for the brand new period?
