At the end of April, the 2022 TIME Magazine Top 100 Influential Companies finally came out, among which the well-known companies selected in the direction of the meta-universe include the NFT trading platform we know as OpenSea, the social platform Meta, the sandbox game The Sandbox, and the auction house Sotheby’s, and the only one of them is a VR social company on the list, and it is Rec Room.

Since its inception in 2016, Rec Room has raised over $294 million in funding. In particular, the company’s valuation has soared three times in one year during 2021, when it was affected by the epidemic.

In March 2021, Rec Room closed a $100 million round of funding, garnering a $1.25 billion valuation; in December of the same year, Rec Room closed another $145 million round of funding, bringing the company’s valuation to $3.5 billion.

It is worth mentioning that Sequoia Capital, Index Ventures and Madrona Venture Group all participated in these two rounds of financing, and were even previous investors in Rec Room, and this continued investment is a reflection of the long-term vision of the investors.

But the most fundamental aspect of the capital rush to Rec Room is the surge in the platform’s user base, which grew from 15 million to 37 million users and from 5 million to 12 million virtual rooms between March and December 2021, although such figures benefited from a significant increase in online gaming traffic due to the epidemic.

But Rec Room’s own strengths have also made users sticky enough that the platform now has 3 million monthly active VR users.

So who is Rec Room? And why has it received so much attention from users, creators, and investors in just one year?

How did Rec Room come about?

Rec Room is a 6-year-old VR social gaming company, and 2021 was an extremely meaningful year for Rec Room, with $245 million in funding, over 37 million users, and 3 million subscribers. The sudden rise in popularity of Rec Room makes people wonder how Rec Room came to be.

Rec Room was initially named Against Gravity, a name derived from the experience of its co-founders, Nick Fajt, Dan Kroymann, and Cameron Brown, who had previously worked on Microsoft’s early project HoloLens, also known as Gravity.

But when HoloLens did not open up the C-side market to the B-side layout, NickFajt left his 8-year tenure at Microsoft and continued to devote himself to the development of VR games.

NickFajt and his team are all game developers with rich experience in development, and due to the energy of several partners, the first version was developed in only 3 months.

In June 2016, Rec Room was officially launched on Steam platform, but at that time, most of the users did not have VR devices or had never experienced VR games, so the number of users on Rec Room platform was not large.

So NickFajt began to lead the team to upgrade and optimize Rec Room, in 2019 on the Sony PS platform, iOS; in 2020 on the Microsoft Xbox platform; in 2021 on the Android platform, to continue to provide support for mainstream hardware, in order to reduce the social threshold of VR, and expand the overall user base of the platform.

NickFajt’s nearly 13 years of professional experience have been closely tied to the VR industry, and Nick Fajt and his team’s persistence in VR social gaming has finally paid off, so in 2021, Rec Room is seen by more people.

Rec Room is now more than just a game, and over the course of its development the platform has expanded to include richer applications, such as classes, dates, family gatherings, weddings, etc. Rec Room creates a virtual world for users and helps them build meaningful social relationships.

What are the interesting ways to play Rec Room?

Rec Room was initially just a free VR social app that gave players a space to virtually socialize, and players could also customize their avatars, which could provide a face-to-face social experience. However, the popularity of VR devices was slow, which limited Rec Room’s growth.

Subsequently, Rec Room expanded its application to multiple platforms such as PC, iOS, Android, Xbox, and Playstation, becoming a cross-platform social application, thus opening the door to development and ushering in massive growth.

In addition to the social features offered by itself, Rec Room also offers a series of mini-games such as battle royale shooters and multiplayer racing games, which are loved by many users.

On the other hand, since 2017, Rec Room has also gradually provided players with creator tools. Players can use their imagination to create a room and game with different functions and invite friends and others to participate.

To incentivize players to get more involved, Rec Room also takes a page from Roblox’ book by allowing creators to sell their content for cash, as well as launching a “creator subsidy program” to subsidize players who create content in Rec Room.

These measures inspired creators, and soon more than 5 million rooms were created in Rec Room, many of them with virtual scenarios that fit the needs of the times.

Many real-life events had to be cancelled due to the epidemic, and the tools provided by Rec Room allowed players to find an alternative way for these events to be realized.

Rec Room is no longer a simple social application, but a way of life that carries the spiritual social needs of real people, and this is the “Rec Life” concept that Rec Room promotes. This is the concept of “Rec Life” advocated by Rec Room.

However, due to technical problems, Rec Room only supports up to 40 people in a single room, which limits the imagination of Rec Room. However, Rec Room’s CEO said that a room to the scale of 10,000 people is also solvable.

So, in the near future, we can foresee that events such as music festivals attended by tens of thousands of people, or even sporting events where hundreds of thousands of people are present together will likely be realized on Rec Room.

How does Rec Room connect with brands?

It is because of Rec Room’s constant iteration of the product that many partners have connected with Rec Room, and there are some interesting cases to explore.

For example, Rec Room recently partnered with famed YouTuber and philanthropist MrBeast, giving players who log in to Rec Room before May a free custom MrBeat t-shirt for their avatars without a subscription, meaning that branded clothing can be linked even in the VR world.

And in early April, because the playoffs were hot, Rec Room announced a partnership with the NBA to host a special in-game event during the 2022 NBA playoffs and invite NBA superstar LeBron James to interact with Rec Room fans.

Rec Room also brought custom skins and related accessories for players, and also introduced jerseys from 30 NBA teams, including the Houston Rockets and Celtics, for everyone to choose from.

We then saw the launch of various new basketball-themed content related to the 2022 NBA playoffs in Rec Room’s main entertainment center lobby, where players could wear their favorite team’s jerseys to complete dunks and “take pictures” to remember the game.

It’s safe to say that Rec Room’s two recent typical collaborations show the brand’s recognition of this new form of social interaction, and the co-branded clothes with MrBeast may become a benchmark for such collaborations for later brands to learn from.

Collaborations like the NBA’s are very intuitive and show how brand linkage can be accomplished in the virtual world, and can even bring more unexpected surprises.

Earlier this year, because of the epidemic, some brands’ traditional offline experience activities were forced to come to a halt.

The famous British cosmetics brand Soap&Glory chose to design a spa in the cloud in Rec Room, and invited consumers to participate in brand interaction in this virtual room, and those who participated in the activity also had the opportunity to unlock the discount code of the online store, the whole brand activity is no different from the offline process, thus gaining the participation of many fans.

Rec Room founder Nick Fajt had this statement in an interview last year, “Initially Netflix had little content to attract users, and there were still a lot of people using it, but as time went on, a large number of users would rather watch 17-year-old reruns of shows on the live platform than use disk mail, even if they have access to the latest content titles, as developments in certain areas can really change consumer behavior.

Whether it’s crypto, VR/AR or the metaverse, in their early stages, you’re going to see some changes in consumer behavior around those things.”

Perhaps, for Rec Room, consumer behavior is already quietly changing, and all they have to do is prepare their products to meet that change and be ready to bring new experiences to consumers and brands alike.

A time for VR social apps to explode?

In mid-April, overseas media reported that Rec Room’s platform had reached 3 million monthly active VR users, much higher than the 1 million users a year ago, and then Rec Room said, “We are very pleased with the growth of VR, but currently VR accounts for a very low percentage of our monthly active players.

Rec Room is growing much faster on iOS, Android, PlayStation and Xbox, as these devices total a billion units,” meaning Rec Room’s actual monthly activity numbers are much higher than the disclosed 3 million users.

And while Rec Room community leader Shawn Whiting claims that the platform reached 3 million monthly active VR users “shortly after the holidays,” the holidays provided a boost to Rec Room’s user expansion, but it may have stabilized since then.

In other interesting news, VRChat, the current leader in VR social, reached a milestone in the final hours of 2021 when the company and community hosted a massive New Year’s Eve party across the platform, and on the very last day of the year, its platform reached 89,300+ peak concurrency.

Keep in mind that Grand Theft Auto Online, another well-known game on Steem during the same period, also had about 90,000 players logged in via Steam on New Year’s Eve.

This means that VRChat for pure community users has been able to compete with this type of very game-like peace, and VRChat now often maintains more than 20,000 online users at the same moment, still ranking at the top of the Steam platform social field.

Through the performance of Rec Room and VRChat we can see that the VR social field has finally begun to usher in the moment of explosion after the development of the past few years.

Another point of interest is that Snapchat, a well-known overseas social platform, has also recently started to get involved in the VR segment socially, but the platform, which has a daily activity of 332 million users, is more inclined to use AR technology to taste the freshness, such as its AR developer platform Snap AR, which currently has over 250,000 creators creating over 2.5 million special effects filters on Snapchat and has been viewed more than 5 trillion times. The number of views exceeds 5 trillion.

Snapchat has also launched AR shopping, AR concerts and many other interesting features that are loved by many young users around the world, which has also contributed to the growth of the platform’s user base.

Although Snapchat’s founder Spiegel has publicly stated that the platform will not use the concept of meta-universe, it seems that they are now physically marching towards it instead.

Perhaps there is still a gap of hundreds of times between a pure VR social platform like Rec Room and Snapchat’s user scale, but the giants are also closing in on the field, and the strength of Rec Room’s players, who have chosen to grow from the bottom up, should not be underestimated.

If a few years ago VR social was still a gimmick, and even not favored, then now we have to start paying attention to this new track, after all, a platform with a monthly activity of 10 million is likely to be on its way.


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