Wreck Room, a Roblox-like social gaming platform that lets users create games and experiences for others to play, is shutting down on June 1. Despite reaching over 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 thought about how to make Rec Room a sustainable profitable business” and “our costs always outweighed the revenue we brought in.”
The company also notes that “due to recent changes in the VR market, as well as broader headwinds in gaming, the path to profitability has become so difficult that we have made the difficult decision to wind 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 when he made the layoffs it “gave us the ability to take care of people while still positioning Rec Room for years, not months.”
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