Snap has acquired select assets from Rec Room as the social gaming platform prepares to shut down, marking the end of one of the most widely used virtual social spaces in gaming.
Rec Room confirmed it will shut down its platform on June 1 after failing to build a sustainable business model. The company said its costs continued to exceed revenue despite reaching more than 150 million players over the past decade.
According to some media reports, some employees from Rec Room are set to join Snap, but this doesn’t necessarily mean that Rec Room will be making a comeback at Snap, at least not in its current shape. To be more specific, these Rec Room team members will be heading over to Specs Inc., which is Snap’s hardware branch, to lend their expertise to the Specs eyewear and augmented reality projects.
The acquisition does not indicate a continuation of Rec Room as a product. Snap has not announced plans to revive the platform in its current form. Instead, the focus appears to be on leveraging the team’s experience in building multiplayer virtual environments for future AR products.
Rec Room’s shutdown follows years of growth and heavy investment. The company raised around $294 million and reached a valuation of $3.5 billion in 2021. However, internal economics remained weak. The company retained a limited share of revenue from user generated content after platform fees and creator payouts, which constrained margins.
The decision also reflects broader changes in the gaming and immersive tech market. Rec Room cited shifts in the virtual reality space and wider industry pressure as factors behind its closure. Other platforms have also scaled back VR efforts, with companies shifting focus toward mobile and augmented reality experiences.
Snap’s move aligns with its long term strategy around AR hardware. The company has invested in smart glasses for years and recently formalized its hardware push through Specs Inc. The addition of Rec Room talent strengthens its position in building shared, interactive digital experiences tied to real world environments.
Rec Room’s shutdown timeline includes an immediate halt to new account creation and purchases, with full service closure scheduled for early June.
The platform’s decline highlights a key issue in the metaverse sector, strong user growth without a viable revenue model, which also let Meta to scrap their $80 billion Metaverse project. The question remains what can Snap and Snapchat do to bring back the lost spark?
