Snap Inc. confirmed late Monday that it has acquired select assets from Rec Room Inc., following the news that the Seattle-based company plans to shut down its longtime social gaming platform.
Some of Rec Room’s employees will be joining Snap — but this does not appear to signal that Rec Room will be resurrected at Snap, at least not in its current form. Specifically, the Rec Room employees will work at Specs Inc., the Snap hardware subsidiary, to support its Specs eyewear and augmented reality initiatives, the California-based company said in response to an inquiry from GeekWire.
Snap, the parent company of Snapchat, has maintained a Seattle engineering center since 2015. The company did not disclose deal terms, pricing, or other details of the asset sale.
It’s not clear how many Rec Room employees will be hired as part of the transition.
The move comes in advance of the expected launch later this year of Specs, Snap’s next-generation glasses. Snap has been betting on high-tech glasses for years, and in January established Specs Inc. as a wholly owned subsidiary to focus on its Spectacles/Specs hardware business.
Snap said it was impressed with the Rec Room team’s expertise in building social, multiplayer XR experiences, the industry term for virtual reality, augmented reality, and mixed reality technologies.
Reached via phone, Nick Fajt, the Rec Room co-founder and CEO, said he was “very proud of the team,” thankful to the Rec Room community, and excited for what’s next.
Rec Room surprised the community earlier Monday with the news that it would shut down its platform on June 1, saying it had never found a way to make the business sustainably profitable despite reaching more than 150 million players since it was founded a decade ago.
“Our costs always ended up overwhelming the revenue we brought in,” it said, noting that recent changes in the VR market and broader challenges in gaming contributed to its decision.
Rec Room raised $294 million across six rounds of funding and was valued at $3.5 billion in 2021, making it part of a select group of Seattle-area startups to reach unicorn status.
PREVIOUSLY: Rec Room shutting down: Once valued at $3.5B, social gaming platform finds profits elusive
