150 million users later, Roblox competitor Rec Room is shutting down

March 31, 2026
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Rec Room, a Roblox-like social gaming platform that lets users create games and experiences for others to play, is shutting down on June 1st. Despite reaching more than 150 million players and creators and, at one point, being valued at $3.5 billion, the company says in a blog post that “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.”

The company also notes 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.” Rec Room laid off half of its staff in August, and a few days after the cuts were announced, Rec Room CEO and co-founder Nick Fajt said that 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.”

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