VR gaming and the VR industry have just taken another blow, with one of its longest-surviving social platforms, Rec Room, shutting down as of June 1, 2026. The social VR platform has survived for a decade, though its run is coming to an end in just two months.
"Over the past decade, Rec Room grew into something amazing, reaching over 150 million players and creators along the way," the studio wrote in a blog post announcing the news. "Players made over half a billion friends on the platform. In total, people all around the world spent a cumulative 68 thousand years in Rec Room. The top UGC rooms saw over 500 years of play time each. That’s a lot of people having a lot of fun."
Rec Room has been a VR hangout space for years, and was clearly able to grow its audience for years, especially as certain VR headsets, like the Meta Quest series, became easier for people to accommodate and use at home. Once those headsets both stopped needing any kind of wired attachment and were capable of delivering a strong visual experience, they grew in popularity, though VR as a whole still remains niche.
As for why Rec Room could no longer survive in this niche, after suffering a mass layoff last year, the studio admits in its blog post today that, even with its popularity, it was never a profitable endeavour. "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," the studio writes.
"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. We're making this decision now, while we still have the ability to wind things down thoughtfully and do right by the people who built this with us."
Rec Room's shuttering comes after Meta suffered another mass layoff, with 700 employees reportedly cut, including several within its Reality Labs division. This is also the second time this year its Reality Labs division was hit with layoffs, as it shuttered two of its internal studios, Twisted Pixel and Sanzaru Games, in January 2026.
Another Meta studio and prolific VR developer, Camouflaj, will no longer make VR games after the layoffs it suffered at the same time that Twisted Pixel and Sanzaru Games were shuttered. nDreams, another prolific VR developer and publisher (though not owned by Meta), shut down two of its internal teams earlier this month. And Ubisoft just recently laid off over 100 developers from Red Storm Entertainment and ceased all game development operations. The studio may have initially been known for being the original Tom Clancy studio, but in recent years it had become very well known for its top-tier VR titles.
Yes, there are some things on the horizon that could turn the VR market around. Valve is certainly not giving up on the platform with its upcoming Steam Frame headset on the way, which, if properly priced, could see players give the tech a chance, now that Meta has taken some big hits with its decision to move away from its Metaverse plans and PlayStation seems utterly disinterested in its PSVR line.
What's heartbreaking is that those who've tried VR and the developers who work with the tech understand how much potential there is. Last year, I spoke with writer Rob Yescombe, who is looking to bring back the VR murder mystery, The Invisible Hours. A much-loved game that is another example of how storytelling can expand in VR. And that's to say nothing of how fun a more traditional VR experience, like Beat Saber or Resident Evil in VR, can be.
Who knows what lies ahead for VR, but while the video game industry as a whole is going through a turbulent time, the sectors of it that were already niche, like VR, are seemingly getting hit with damage multipliers.
About the author: David has been writing about videogames, technology, and culture since 2020, with a focus on reporting daily news across multiple publications, including GameDaily.Biz, GameSkinny, and PlayStation Universe before joining Wccftech in 2025. David started contributing as Canada/US reporter for Wccftech's gaming section in 2025. Besides being up-to-date on the industry's movements, he loves interviewing developers, reviewing games, and writing intricate essays about the symbolism and layered meanings to be found in rich narratives as he's done for publications like GamesIndustry.Biz, LostInCult, and others. Outside of games he loves movies, music, theatre, his hometown, and his family, though not necessarily in that order.
Follow Wccftech on Google to get more of our news coverage in your feeds.
