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Rec Room social gaming platform has raised $ 100 million at a value of $ 1.25 billion. Funding is another vote of confidence for user-generated content.
And so we have another contender for the Metaverse, the universe of virtual worlds all interconnected, like in novels like Snow Crash and Ready Player One.
Users as developers are a big topic in the latest gaming boom, which saw the user-generated content platform Roblox go public and Overwolf raised $ 52.5 million on mods.
Existing investors Sequoia Capital and Index Ventures led the round with the participation of the existing investor Madrona Venture Group. This news continues a year of unprecedented milestones for the young company.
Rec Room was launched as a free-to-play experience in 2016 and now has 15 million lifetime users. Revenue rose 566% last year when monetization came together, CEO Nick Fajt said in an interview with GamesBeat.
“We have seen strong growth over the past 12 months,” said Fajt. “We believe Rec Room can become a permanent large company that connects games and social networks. We think this can be one of the things that really affects the culture. We think it can be one of the greatest games in the world. That’s why we really want to invest in this future. “
Photo credit: Rec Room
Getting here wasn’t easy as Rec Room started out with a focus on virtual reality headsets. This market was hyped in 2016, but it was slower than hoped. The Rec Room has been moved to other platforms such as game consoles, PCs and mobile devices.
While VR still makes up around 25% of its users, the company now has other platforms that are larger. Fajt said the company needs to find growth on other platforms.
“VR is still a very important part of our work,” said Fajt. “We’re probably still a top 2 or top 3 VR app.”
Rec Room has over 5 million rooms to explore and there are over two million players who have created content in Rec Room. According to Fajt, the company focused on developing easy-to-use creative tools. One thing that worked was that users could bill other users for in-game currency when they sold their own items. Also, Rec Room has launched a subscription service that makes it easy for users to purchase game currency.
Photo credit: Rec Room
“We definitely want the app to be friendly, welcoming and accessible,” said Fajt. “That’s a big part of what we do.”
In Rec Room, you can party with friends around the world and build anything from escape rooms to adventure games, battle royale islands and birthday parties. Diversity will continue to grow with incentives like the Creator Compensation program, which will pay developers more than $ 1 million in 2021. The developers add 20,000 new rooms every day.
“We want people to go from a hobby to a career,” said Fajt.
Fajt said Rec Room has become not just for gaming but also the go-to place for digital hangouts, creative classes, business brainstorming, office buildings, weddings and more. He said the target market is between 13 and 16 years old while Roblox is between nine and 12 years old. And with Rec Room, players don’t need to have any coding skills to create things.
In the long run, Rec Room could be a contender to build the metaverse. Currently there can be around 40 people in one room. But over time this could change and become more metaverse-like.
“It looks like an interesting challenge as we advance in AR and VR, and I hope Rec Room can play a huge role in defining looks,” said Fajt.
Photo credit: Rec Room
Among the challenges? Maintaining happy surroundings and good behavior as communities always need moderation, Fajt said. It will take machine learning and AI to make sure the rooms stay healthy.
Rec Room is available for iOS, Xbox, PlayStation, Oculus and Steam. The company employs less than 100 people. The company plans to hire a lot of people.
“We’re seeing growth on game consoles and iOS,” said Fajt. “There are some interesting headsets coming and we saw a nice big audience on Oculus Quest 2.”
As for raising money, Fajt said, “We just looked around and saw that it was a good time to raise money. Whenever we can target the right partners, the right plan and the right price, that’s good. “
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