This evening AltspaceVR has announced it will be closing its doors for good on August 3rd. Founded in 2013, the social VR platform was one of the first to come online and connected tens of thousands of users monthly across a range of headsets.

AltspaceVR sent an announcement of the platform’s shuttering to Road to VR by email this evening.

It is with tremendously heavy hearts that we must let you all know that we are closing down AltspaceVR. The company has run into financial difficulty and we can’t afford to keep the virtual lights on anymore. This is surprising, disappointing, and frustrating for every one of us who put our hearts into AltspaceVR. We know it will probably feel similarly for you.

We know many of you have created vibrant relationships in AltspaceVR, so please use the next few days to connect with those friends and hopefully find another way to stay in touch.

Among what’s now a fairly vibrant range of social VR platforms, AltspaceVR had an early mover advantage, opening it’s doors long before the launch of the consumer versions of the Oculus Rift and HTC Vive. The app would eventually be supported by those VR headsets and more, including a monitor-mode for those without a headset.

AltspaceVR brought people together into shared virtual spaces to talk, play, and share. A major part of the company’s early strategy involved an open SDK which would allow developers to use web technologies like JavaScript to build experiences which would extend and interact with the social platform. The platform was also host to a range of mini-games like frisbee, branded games like Dungeons & Dragons, and was built for the community to host virtual events. It also included a browser capability which let users browse the web together.

In addition to community events, the company also hosted their own marquee events, bringing the likes of Drew Carey, Reggie Watts, Janeane Garofalo, Bill Nye, and many more into the virtual world to interact and perform with a virtual audience from around the globe.

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According to the company, some 35,000 people used AltspaceVR each month, with users spending on average 35 minutes per day inside the social virtual world, and large events bringing in thousands of attendees. So what happened? The company explains:

“We’re a venture-backed startup. We had a supportive group of investors that last gave us money in 2015. It looked like we had a deal for our next round of funding, and it fell through,” the announcement of the platform’s closure reads. “Some combination of this deal falling through and the general slowness of VR market growth made most of our investors reluctant to fund us further. We’ve been out fundraising but have run out of time and money.”

According to Crunchbase, AltspaceVR has raised nearly $16 million in venture funding over the course of its run, and from significant investors too, like Comcast and Tencent.

Though 35,000 users monthly isn’t anything to sneeze at, the company had yet to begin monetizing the platform, meaning it was relying on venture capital runway to continue building the service. Without being able to raise more money, there’s no way to “keep the virtual lights on,” as the company put it.

So the AltspaceVR platform itself will close its doors on August 3rd, but what about the company itself?

“We’re not really sure yet,” reads the announcement. “The amazing people that worked at this company created some awesome technology – things that we think will be foundational to the future of social VR. We’d love to see this technology, if not the company, live on in some way, and we’re working on that.”

The company plans to host a “final farewell party” on the 3rd, the culmination of which will officially bring the platform to a close; the precise timing of the party is not yet known. More details, including an FAQ, can be found in a Goodbye blog post on the company’s website.

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Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Xron

    Thats a real shock, one of the best social apps is closing ~.~
    35k players per month shows that the idea was good, just closing too early.
    If they would have waited for standalone units, Microsoft headsets and most importantly if PSVR users could join Altspace it might have been another ending… + I guess they lacked ideas how to monetize it properly…
    This project gave other devs ideas how create a decent social app.
    Good luck with other projects.

    • Wednaud Ronelus

      Amen!!!!!

    • WyrdestGeek

      Yeah, they really wanted to wait, I am sure, but they haven’t got the dough. Maybe if someone has many millions they’d like to throw at them, then the virtual lights might stay on a while longer.

      • user

        they already had big investors like google ventures. maybe they just were not good enough.

    • Duane Locsin

      I’m shocked as well.

      Was the very second VR app I used when I first got into VR with the Gear VR early last year and got further into it again with a Vive.

      I had wondered where did they get funding from, I would have paid for a comprehensive App upfront and good DLCs if required.

    • Tommy

      Just shows how overrated the VR industry was. I mean I love VR. It’s good. But not THAT good.
      Next thing you’ll know Jesse Schell will be eating all his predictions and closing shop.

      • Casey

        Dumb post. Could write a response to this troll, but I don’t know if this idiocy is worth it.

        I agree with VR Geek, though. I think 2016 and 2017 will end up being the lowest, darkest, most stressful point for the industry, and that the overall tenor and atmosphere surrounding VR will start becoming more positive and less uncertain next year, thanks to things like standalones and announcements regarding Gen 2’s release dates/specs/features.

    • Not sure what you guys know of the technical challenge they’re up against, but as the CTO of another VR company that knew AltVR and the team well enough to talk about the shared challenges we (vantage.tv) were having; I can tell you that the real-time, multiplayer, voice PLUS VIDEO-streaming aspect of the platform is not cheap to sustain, unlike many web-based apps. To make matters worse, VR is not the web YET (WebVR is moving fast, but wasn’t there 4+ years ago when we and AltVR needed it and still isn’t quite there). It’s easy to hear that and go, “yeah, yeah, but…”, BUT since it’s not the web, you have to throw out all the assumptions you now make about how to monitize. In fact, because of the multi-platform nature, you have to be able to monitize in ways that won’t conflict with ANY of the platforms (or maintain branches for each that also differ in marketing abilities) and without any of the modern tools that are taken for granted outside fully 3D/CGI environments, where everything is a vertice, texture, or other graphic asset and NOT truly dynamic content as we now have on the web.

      This makes taking paying in VR a nightmare and if you look around, you’ll notice there are few (if any) really popular VR apps/games/experiences which rely on commerce internally.

      I’m not saying THAT was THE thing at play here, but I’m confident it was a major contributing factor to their inability to “monetize it properly”.

      Regardless, this is a blow to the industry and saddening because these guys were all about connecting people, in VR and that is the biggest thing VR needs right now. Hopefully the project will live on in another form.

      • K E

        Ever since FB bought Oculus, “Social VR” companies have had to consider two likely scenarios for themselves:
        1. Get outcompeted by FB
        2. Get acquired by FB.
        The investors closed the company the moment they became convinced that (2) was not going to happen. Any monetization in the here and now wouldn’t influence FB:s decision about this so it makes sense the company didn’t think about it.

  • CURTROCK

    Ahead of their time, forward thinking, the 1st real shot at implementing the Metaverse. So many social VR 1st’s were tried & tested in AltSpace. They made a huge contribution to the VR movement. Respect & gratitude to these VR trailblazers!

  • Get Schwifty!

    I have to be honest, I felt there was a lot of potential with AltspaceVR, but after about an hour I felt like there was little to do. RecRoom as an example, which I have yet to try but hear good things makes more sense, you go in to fool around with mini-games makes it much easier to justify in VR making the effort to go in at all.

    What surprises me is that Oculus hasn’t been working on it’s own true social hangout space, or if they are it hasn’t arrived yet.

    • GigaSora

      They’re working on it for sure. All Facebook cares about is the social power of VR. It just takes a while to make something grand.

    • PK

      what Altspace did well was put on events, i attended a few and while i wasn’t a fan of the overuse of floating heart emojis blocking my view of the stage, and bubble sounds of these emojis drowning out the performer, the actual events could be wonderful. they were the first to invite great guests to talk to virtual audiences and eventually they would have been able to sell tickets, i would have paid for some of these. too bad they couldn’t hold out a bit longer.

      • Get Schwifty!

        Agreed – this was actually the one really good thing it did well from my experiences with it.

        • PK

          is there no private messaging feature in disqus? i’m organizing a Show Me What You Got musical talent show soon, in vrchat, seems like this would be right up your alley. the art is already made, looks perfect.

        • PK

          oh i was going to add, i’m at pk at kingdeluxe dot ca.

    • You haven’t been playing in the Playground then (https://altvr.com/new-playground-makes-altspacevr-the-fastest-way-to-create-cross-platform-content-for-virtual-reality/) where modern WebVR allows for almost infinite expansion of AltVR. Sure RecRoom is amazing and they’re expanding at an awesome pace (with what funding I have no idea), but the community can’t do that yet. AltVR allowed for the best of both, but it was early for the community because the tools are just starting to mature. When I first experienced AltVR a couple years ago (in the Redwoods office where I was meeting with Eric Romo), they were light-years ahead of ANY such tool and even now, the alternatives are quite limited in either accessibility (harder for non-developer users), or totally pre-made and there was no way to contribute.

      As for Oculus; it looks like you’re operating on old info because this has been all the talk publicly since OC3: https://www.youtube.com/watch?v=YuIgyKLPt3s and https://www.oculus.com/experiences/rift/1036793313023466/

      • Get Schwifty!

        No not on old info at all, I know all about the Social VR Demo the day it came out. My point is, we’ve had enough time for a social media service to come and go, and FB still hasn’t really gotten something “out there”.

        As for Playground, you may be correct, I gave up on it along with Im sure a number of others before it became available.

        • Ahh. I follow what you mean completely. Funny too because my first thought when I saw it was, “Did they do a deal with Facebook, or did FB just deal them a fatal blow?” since the competition was so obvious and there HAD to be a winner or else we’d end up with yet another social-media fracturing that ultimately would result in Facebook doing what ever they want (the same way I feel they ruined facebook.com years ago, though that’s another subject and entirely my opinion).

          I guess we already have our answer even if that wasn’t the fatal blow, but just one that weakened them (as I think it did). :/

    • chuan_l

      Some work is being done inside Facebook —
      There was an internal team of 200 developers on ” social VR ” when I spoke with them a year ago. This may have even increased since then. Though the concept is broader than most here expect.

  • Christopher Perkins

    This is why people shouldn’t be building content for propriety platforms, and why we need an open and distributed VR platform like the web.

    • Get Schwifty!

      In this case it was open to anyone…… there was nothing closed about it that caused it to fail, so your point makes no sense.

      • Christopher Perkins

        Makes perfect sense. Company folds, your experience was tied to that single company: You no longer have that experience.

        • Get Schwifty!

          Are you saying proprietary because it didn’t tie into social media in general? If so I understand what you mean then.

          • mrtexasfreedom

            What Christopher means is that when you build a web page, it doesn’t matter if google or yahoo or amazon go out of business. Your web page is still accessible to users. Yes, google and yahoo are conduits that bring traffic to your web page, but people can bookmark it and still return days after the demise of other companies. In the case of AltVRSpace, any content created by users will be lost when they close down.

  • VR Geek

    VR is going through the trough of dissolutionment (Gartner Hype Cycle). It naturally makes it very hard to financially make it and I know we here and other VR studios are all hanging in there for gen 2 VR to kickoff and bring more customers. Suspect we will not exit the trough phase until 2018/2019.

    Hang on tight VR entrepreneurs…the promised land is not too much further. https://uploads.disquscdn.com/images/053f5adc3d3cd239c27324d883c279664d4d746949c1f59fa1ed562d96da6a34.png

    • RFC_VR

      Climbing the Slope of Enlightment will take a little time, but it’ll get there.

      No different to other emergent technologies that can run several cycles before finding mainstream adoption

      “Think sunglasses”. It needs to be that transparent (not literally!)

      The beauty for VR explorers? We’ve NEVER had so much cool kit to play with and applications to experience. My first taste of VR was in 1991..its been a long road, so this current cycle and the hype bubble>deflation has been seen before.

      2nd Gen will be awesome

  • GigaSora

    Move over and make room for Rec Room. The true social VR experience.

  • Firestorm185

    Lets hope the same thing doesn’t happen to Rec Room…

  • Damien Wilson

    AltSpace was okay, but they made a huge mistake by taking the non-profit approach. They should’ve tried to make some cash from advertising or something.

    • WyrdestGeek

      From the standpoint of: ‘what’s the best way for us to stay in business?’, it *might* have been a mistake. But then again, if they start charging for things too soon, they run the risk of pissing off their users and going under that way.

      From the standpoint of ‘what’s best for VR in longterm?’ I’m not sure if AltSpaceVR made any mistakes.

      Instead of looking at it in a proft-movtive way, look at it as having been a couple years long research project. Lots of things we’re tried, lots of code has been generated. And the folks that were working there, though things must certainly suck right now, at least they must surely have some pretty good resumes and job skills they can shop around.

      IMHO, the folks that really lost out were the investors. But then, that’s why it’s called a risk.

  • “Social VR” will take several years to become mainstream, the ball is rolling and VR is quite amazing to us geeks, we can see the eventual potential. For it to become mainstream is another matter. Facebook for instance took years for people to gradually sign up and that was vastly simpler with no extra hardware to buy. I still have mates in the builders trade that are only just getting an account because they do not want to miss out on seeing photos and events that their mates talk about. VR will transform, it has to, it needs to be part of our every day life or it will struggle. IMO of course.

  • Skippy76

    So sad.
    I will miss playing cards against humanity in altspace.

  • fuyou2

    What happened to their $16,000,000 funding???

  • Guy Sunderland

    Did Alt-space have the functionality to add photo-real faces/heads ? If not, why not ? Useful for many reasons/applications.
    Was there Leapmotion integration or similar for seeing hands/picking things up ? Essential. VTime is still going I believe.

  • Sebastian Williamson Vega

    No surprise. Most social worlds have died already.