Rec Room shuts down after 150 million users as Roblox rival collapses

Rec Room is shutting down on June 1, despite attracting more than 150 million players and creators and once reaching a valuation of $3.5 billion.

The Roblox-style platform confirmed the decision in a blog post, admitting it “never quite figured out how to make Rec Room a sustainably profitable business” as costs consistently outpaced revenue.

How Rec Room grew fast but still collapsed

Rec Room positioned itself as a social gaming space where users could create and share their own experiences, often compared to Roblox.

The platform grew rapidly and built a massive user base, but that scale did not translate into a sustainable business.

Even at its peak, Rec Room struggled to balance rising costs with limited revenue streams.

Why Rec Room is shutting down now

The company pointed to a mix of internal and industry pressures.

It cited a shifting virtual reality market and broader gaming headwinds, saying the path to profitability had become too difficult.

Rec Room had already laid off half of its staff in August, signalling deeper issues months before the shutdown.

Fans react as Rec Room disappears

The announcement has sparked reaction from players and creators who spent years building communities on the platform.

Rec Room is shutting down after 10 years. This game literally changed my life. Without it I 100% guarantee you I never would have made a YouTube channel

I always hoped it would have the comeback of the century

So many memories. So sad to see it go.. pic.twitter.com/hylimmFoQr

— Boethiah (@RealBoethiah) March 31, 2026

Many are questioning what happens to their creations and progress, while others see the shutdown as a warning sign for similar platforms.

Rec Room shutdown reflects a bigger problem

Rec Room is not alone in facing these challenges.

Meta has scaled back its VR plans for Horizon Worlds, while Epic Games recently cut more than 1,000 jobs amid falling engagement in Fortnite.

The pattern is becoming harder to ignore. Platforms built on massive user bases are still struggling to make money.

What the Rec Room shutdown really means

Rec Room’s closure marks the end of a platform that once looked like a serious competitor in social gaming.

It also raises a bigger question for the industry. If a platform with 150 million users cannot survive, what does that say about the future of this model?