Rec Room

Social gaming platform Rec Room, once valued at $3.5 billion, is shutting down its service entirely on June 1, 2026, following significant financial struggles. The company, which had attracted over 150 million players, announced the closure due to an inability to achieve profitability despite its large community. This follows earlier layoffs this year, as high operational costs and shifting market conditions in the VR and broader gaming industry made the business unsustainable. The platform will cease all new activity and go offline permanently at noon PT on the specified date.

Rec Room laid off 141 employees on 2025-08-27.

Rec Room, a social gaming platform and virtual community, has laid off 16% of its workforce. This reduction, announced in a message to employees, affects many talented individuals and is attributed to significant market shifts, including slowed gaming industry growth, higher interest rates, and a more challenging fundraising environment. To ensure long-term success, the company is adjusting its financial strategy, moving from a model of frequent fundraising to budgeting for extended runway. Impacted employees are being offered three months of paid severance, six months of healthcare premium coverage, and outplacement support. The decision reflects the company's effort to navigate current economic headwinds while maintaining its mission as a creative and social hub for millions of users.