“VRChat is not going anywhere” Founders Reassure Amid Downturn in Social VR Platforms

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Rec Room is shutting down in June. Meta’s Horizon Worlds is searching for greener pastures on mobile. Now, VRChat co-founders say there’s no need to worry about the social VR platform’s future.

“In case you were wondering, VRChat is not going anywhere,” studio co-founders Graham Gaylor and Jesse Joudrey say in a recent blog post.

According to Gaylor and Joudrey, who founded VRChat in 2014, some of that confidence comes from the platform’s ability to consistently bring in record numbers of visitors across Quest, SteamVR, Pico headsets, PC, and mobile devices.

“Last New Year’s Eve, nearly 150,000 people were in VRChat at the same time—celebrating a worldwide event for yet another year. Most of those folks had visited us for New Years multiple times before, but for some, it was their first time,” the studio founders say. “It’s been three months since, and we’ve broken that user record twice since then. Our latest record? Nearly 160,000 people in VRChat at the same time.”

VRChat Avatar Marketplace | Image courtesy VRChat

While those sorts of events periodically bring in usership peaks, it’s what people buy once they’re in VRChat that matters. And its creator economy is booming, the founders say.

“Not only that, but our creator economy, avatar marketplace, and first-party stores are all growing. Creators like Studio TrickForge, spookyghostboo, and nawty have made VRChat a place where they can create amazing communities, experiences, and identities, all while earning for their hard work. We onboard more creators every day.”

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Notably, the platform rolled out its centralized marketplace for avatars and virtual items in mid-2025, which uses its in-game currency, VRChat Credits. Prior to this, users mostly bought and sold avatars through third-party markets, such as Booth or Gumroad, essentially making for a new revenue stream VRChat could tap into.

Gaylor and Joudrey say however one of the biggest reasons VRChat is still kicking in a time of market headwinds is its communities.

“Our community is the thing that makes VRChat different from every platform that has come and gone. You create worlds that defy imagination. You build avatars that embody expression and identity in ways never seen before. You welcome strangers into your communities, make them feel at home, and often change their lives for the better.”

VRChat Historical Peak Concurrents – Steam Version | Image courtesy SteamDB

This follows some pretty worrying signals from the broader VR gaming segment. It was revealed in January that Meta is making a monumental shift in its priorities as a supporter of VR gaming, as its Reality Labs XR division has shifted focus to AI and smart glasses.

Meanwhile, Meta has closed nearly all first-party VR studios and cancelled a number of in-progress games, such as an unannounced Batman: Arkham Shadow sequel from Sanzaru Games, an unannounced Harry Potter VR game for Quest from Skydance Games, and a major project from Moss developers Polyarc.

More recently, social VR platform Rec Room, once valued at $3.5 billion, announced it will be shutting down in June.

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Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 4,000 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • Christian Schildwaechter

    Despite this popularity, we never quite figured out how to make Rec Room a sustainably profitable business. Our costs always ended up overwhelming the revenue we brought in. We spent a long time trying to find a way to make the numbers work.

    This was Rec Room's explanation for shutting down, and the keywords are sustainable and profitable. Its great that VRChat is going from user record to user record, that they found ways to monetize it and allow creators to earn money for their work. But unless that also leads to the sustainable/profitable keywords, it in no way guarantees its further existence. Like Rec Room, VRChat is running on venture capital, which favours growth over short term profits, but not infinitely, and only if there is lots of growth that allows to sell the company to a much bigger player in the future.

    • Ben Raubenolt

      I hope that if VRChat ever did find that this can’t work, they would take a different route than Rec Room did. If it can’t be run as a business, it should be set up as a nonprofit foundation with open‑sourced code, funded through subscriptions or donations like Wikipedia. A community shouldn’t be wiped out due to a lack of imagination in funding. Present the number you need, and I’m sure the community can hit it. I’m disappointed in Rec Room’s management for not being more imaginative. I am glad they are at least doing an orderly shutdown though and allowing people to collect some memories.

      That said, VRChat seems to be doing everything right. Their engagement with the community and attention to feedback is nearly unparalleled. I can’t readily think of another corporate entity so actively engaged with user feedback. They’ve also managed to thread the needle on several important and impactful decisions over the last few years–decisions that required balancing multiple tradeoffs–and I think they handled them the right way. Hopefully they’ll still be thriving 100 years from now.

  • VrSLuT

    The fact that they have 2 co-founders means that every tech-billionare preditor is going to be driving a wedge between them so they sell-out! They also built their empire on top of Unity which is another factor. Welcome to your corporate overlords!