Rec Room, a social gaming platform that allowed users to create games and experiences, was once a rising star in the gaming industry. With over 150 million players and creators, it garnered significant attention and was valued at $3.5 billion at its peak. However, despite its popularity, the platform struggled to establish a sustainable business model.

As of June 1, 2026, Rec Room will officially shut down, marking a decisive moment for the platform. The decision was primarily driven by ongoing profitability issues, as the company admitted, “we never quite figured out how to make Rec Room a sustainably profitable business.” This admission highlights the challenges faced by many platforms in the competitive gaming landscape.

In August 2025, Rec Room laid off 50% of its staff, a move that indicated the severity of its financial struggles. Despite these efforts, the company could not reverse its fortunes, leading to the announcement of its impending closure.

The shutdown of Rec Room has left a loyal user base disheartened. One fan expressed their sadness, stating, “Sad to see it go. Its how I survived most of covid and was a huge way to feel connected to IRL’s I couldn’t see due to it.” This sentiment underscores the emotional connection many users had with the platform.

Rec Room was often viewed as an alternative to Roblox, another popular gaming platform. However, while Roblox has continued to thrive, Rec Room’s inability to monetize effectively has led to its downfall. The contrast between these two platforms illustrates the varying paths that social gaming companies can take.

As the gaming industry evolves, the challenges faced by Rec Room serve as a cautionary tale for other platforms. The need for a sustainable business model is crucial, especially in a market where user engagement does not always translate to profitability.

Looking ahead, the closure of Rec Room raises questions about the future of similar platforms. Will they learn from Rec Room’s experience, or will they continue to face the same pitfalls? Only time will tell.

Details remain unconfirmed.

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Meta has been ordered to pay a staggering $375 million in civil penalties after a New Mexico jury found the company liable for intentionally creating addictive platforms that harm young users. This ruling follows a lawsuit initiated by the New Mexico attorney general’s office in December 2023, which accused Meta and Google of enabling harm, including child sexual exploitation, against their users.

The jury’s decision marks a pivotal moment in the ongoing scrutiny of Big Tech, with Meta being held responsible for 70% of a collective $3 million fine imposed on both Meta and Google. The ruling reflects growing concerns over the psychological impacts of social media, with claims that these platforms contribute to issues such as body dysmorphia and depression among young users.

During the nearly seven-week trial, Meta executives testified that harms to children were inevitable due to the vast user bases of their platforms. The jury deliberated for about one day before reaching their verdict, which included the maximum penalty of $5,000 per violation under New Mexico’s consumer protection laws. This penalty was levied after it was revealed that Meta had disregarded warnings from its own employees about the risks associated with its platforms.

Raúl Torrez, the New Mexico attorney general, hailed the jury’s verdict as a “historic victory for every child and family who has paid the price for Meta’s choice to put profits over kids’ safety.” In contrast, a Meta spokesperson stated, “We respectfully disagree with the verdict and are evaluating our legal options,” indicating the company’s intention to appeal the ruling regarding the hefty fine.

Further complicating the case, Meta’s decision to encrypt Facebook Messenger was cited as a factor that blocked access to crucial evidence of crimes, raising questions about the company’s commitment to user safety. Observers note that this ruling could set a precedent for future legal actions against social media companies, particularly as public sentiment grows increasingly critical of their practices.

Historically, Meta and Google have faced allegations of designing their platforms to be addictive, contributing to mental health issues among young users. The outcome of this case may signal a shift in how such companies are held accountable for the effects of their platforms on society.

As the legal landscape evolves, the implications of this ruling remain to be fully understood, with many in the community expressing ongoing concerns about the invasiveness of social media. Details remain unconfirmed regarding how this ruling may influence future regulations or lawsuits against other tech giants.

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Meta has confirmed that its virtual reality platform, Horizon Worlds, will cease to operate in VR by June 15, 2026. This decision comes as part of a broader reorientation of Meta’s metaverse strategy, which has seen the company invest a staggering $80 billion in the metaverse to date. The platform will also be removed from the Quest Store by March 31, 2026, indicating a significant pivot in Meta’s approach to virtual reality.

Despite the shutdown of Horizon Worlds, Meta remains the largest investor in the VR industry, with plans to focus on developing a mobile app version of Horizon Worlds. A spokesperson from Meta stated, “We have a robust roadmap of future VR headsets that will be tailored to different audience segments as the market grows and matures.” This suggests that while one aspect of their metaverse vision is being scaled back, the company is not abandoning its commitment to VR technology.

The context of this shift is underscored by the challenges faced in the VR sector. The anticipated customer-facing services within the metaverse have not materialized in any meaningful way. Furthermore, a 2023 survey revealed that the average annual turnover rate for contact center agents has reached an alarming 60%. Companies like Walmart have turned to VR-based training solutions to combat this issue, having implemented such programs since 2021. The effectiveness of these initiatives is notable; Strivr, a VR training provider, has reduced Walmart’s training time from eight hours to just 15 minutes, while employee satisfaction scores rose by 30% after VR training.

Moreover, associates who underwent VR training scored 10-15% higher on post-training assessments, highlighting the potential benefits of VR in employee development. However, the broader implications of Meta’s strategic shift raise questions about the future of VR in corporate training and customer engagement. As Marty Resnick, a leading analyst, noted, “By 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social and/or entertainment.”

Additionally, Resnick anticipates that 30% of organizations worldwide will have products and services ready for the metaverse by 2026. This projection indicates that while Meta is recalibrating its approach, the metaverse is still expected to play a significant role in the future of business and social interaction.

Meta’s decision to discontinue Horizon Worlds in VR raises uncertainties about the viability of other metaverse investments. As Resnick stated, “It is still too early to know which investments will be viable in the long term, but product managers should take the time to learn, explore and prepare for a metaverse in order to position themselves competitively.” This sentiment reflects the cautious optimism that many industry observers share regarding the metaverse’s potential.

In summary, while Meta’s Horizon Worlds will no longer be available in VR after June 2026, the company continues to invest heavily in the metaverse and VR technologies. The shift towards a mobile app version suggests a strategic adaptation to the evolving landscape of virtual reality, even as the broader metaverse remains a topic of interest and speculation among industry experts.

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Yann LeCun, a prominent figure in artificial intelligence and former leader of Facebook AI Research, has founded Advanced Machine Intelligence (AMI) after departing from Meta at the end of 2025. AMI has successfully raised $1.03 billion based on a $3.50 billion pre-money valuation.

Meta’s AI Reorganization

In June 2025, Meta reorganized its AI efforts under a new division called Meta Superintelligence Labs. This restructuring reflects the company’s ongoing commitment to advancing its artificial intelligence capabilities.

LeCun’s Vision

LeCun, who joined Meta in 2013, has expressed a desire for AMI to become the leading provider of intelligent systems across various applications. He has previously voiced concerns that current large language models do not yet achieve human-level reasoning and autonomy.

TikTok’s Competitive Moves

Meanwhile, TikTok is aggressively pursuing advertising dollars from independent agencies, aiming to close the gap between its Smart+ advertising product and Meta’s Advantage+. Recent reports indicate that Meta’s Advantage+ has encountered bugs that have frustrated users, potentially impacting its effectiveness in the competitive landscape.

Industry Insights

Krystal Scanlon, an industry analyst, noted that TikTok’s focus on attracting ad dollars and creators could strengthen its position in the market, especially as it navigates challenges that have lingered since January.

As the AI landscape evolves, the competition between Meta and emerging players like AMI and TikTok is expected to intensify, with each striving to capture a larger share of the market.

Details remain unconfirmed regarding the long-term implications of these developments for Meta and its advertising strategies.

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