The social gaming platform grew to 150 million users over the last decade. Despite this, the developers claim the platform never reached sustained profitability.
Rec Room originally launched in 2016 as a VR-only platform for the HTC Vive on SteamVR, with teleport-only locomotion. Later that year it came to the Oculus Rift with Touch controllers, then the original PSVR the year after. By 2018 it had shifted focus to flatscreen, launching on PC and PlayStation, and in subsequent years it came to iOS, Xbox, Android, and Nintendo Switch. Thus, Rec Room grew far beyond its VR roots.
In a blog post on Rec Room’s official website, the company broke the news that it will be closing its doors on June 1, 2026. The post goes on to say “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.”
“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.”
Rec Room has been showing signs of struggle in the last year, going so far as to lay off fifty percent of its staff after a failed expansion of its user generated tools to consoles and mobile became too much for the team to handle. In that blog post, Rec Room admitted that the bulk of its “most impactful creation comes almost entirely from creators on PC and VR”. That fifty percent staff reduction was the second round of layoffs in 2025 after a sixteen percent reduction in March.
Rec Room Halves Staff After ‘Pushing A Giant Vision We Couldn’t Realistically Deliver’
Rec Room’s co-founders said they let go roughly half the team today.
The post details how the Rec Room team will wind down its services. I’ll quote the full list here:
- You can no longer create new accounts
- You can no longer add someone as a friend
- You can no longer sign up for Rec Room+ (RR+)
- If you have an active RR+ membership, that membership is extended to June 1st.
- We have removed the RR+ requirement from Partnered Creator. Anyone with sufficient tokens can choose to cash them out.
- New registrations for Partnered Creator will be halted on May 1st.
- You will no longer receive token rewards (e.g., at the end of an RRO)
- You can no longer create new monetized UGC content, including:
- Room inventory items and offers
- Room keys, consumables, and currencies
- Avatar items (in-game and Avatar Studio)
- The Room Rewards program has ended. March Room Rewards will be paid out in early April.
- You can no longer purchase or receive new Roomie Energy
Additionally, all first party content in the Rec Room store will be discounted eighty percent. Starting in May, users will no longer be able to purchase or redeem gift cards for tokens. Creators will no longer be able to earn tokens after May 18. All tokens can be spent until June 1 when servers will go offline permanently.
You can read the full blog here, which also details the specifics of what happens to prepaid RR+ memberships and instructions for creators on how to download their content.
