Rec Room, a Roblox-like social gaming platform that allows users to generate games and experiences for others to play, is discontinuing on June 1st.
With a community of over 150 millions and creators, and at some point, it had a valuation of $3.5 billion, the company is shutting down.
Is Rec Room really shutting down?
As per Rec Room, “we never quite figured out how to make Rec Room a sustainably profitable business” and that “our costs always ended up overwhelming the revenue we brought in.”
Furthermore, the company mentioned that “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.”
In August 2025, the company laid off nearly half of its workforce.
Following the lay offs, Rec Room CEO and co-founder Nick Fajt stated that doing the layoffs when it did “gave us the ability to take care of people, while still setting up Rec Room for years, not months of funding.”
Social gaming platforms are seemingly struggling nowadays, as Epic Games also laid off over 1,000 employees last week due to a “downturn in Fortnite engagement.”
