Rec Room, Roblox's competitor with 150 million users, has officially shut down.

The social gaming platform Rec Room , once considered a rival to Roblox , will officially cease operations on June 1, 2026, according to an announcement from the developer.

Despite having over 150 million players, the project was unable to sustain itself in the long term.

Why did Rec Room close?

According to the developer, the platform is facing numerous difficulties in maintaining its operation:

• Sustainable profitability is not achievable.
• Operating costs consistently exceed revenue.
• The virtual reality market is declining and the gaming industry is struggling.
• The company had previously laid off about 50% of its workforce to prolong its operations, but it wasn't enough to save it.

The developers admit they haven't yet figured out how to turn the product into a profitable long-term business.

+ Once valued at billions of USD

Rec Room was once one of the most ambitious social gaming platforms:

• Released in 2016
• Allows players to create their own content and games.
• Supports virtual reality, PC, console, and phone.
• It reached a valuation of $3.5 billion at its peak.

However, expanding to multiple platforms significantly increased operating costs and placed immense pressure on the development team.

The social gaming market is facing difficulties.

Rec Room isn't the only company facing challenges; the social gaming and virtual reality market in general is also experiencing significant difficulties. Several large companies have cut staff or changed strategies to adapt to the new situation.

This shows that large-scale social gaming platform models are still very difficult to sustain without a stable revenue stream.

How will players be affected?

According to the announcement:

• Rec Room will operate until June 1, 2026.
• After this time, the service will cease completely.
• Players and content creators will lose access to the platform.