Following weeks of speculation surrounding the social VR platform’s successful turnaround, it has been revealed today that AltspaceVR is now part of Microsoft. Despite being one of the original social VR services, the company fell into financial difficulties in July, and almost completely shut down.

Update (10/3/17): At today’s Windows Mixed Reality event in San Francisco, Microsoft announced that AltspaceVR is now part of the family. The social VR platform ran out of funding in July, announcing an imminent closure, but the service was saved thanks to a passionate community response and investment from an unnamed party, which has now been revealed.

“AltspaceVR is one of the pioneers in immersive communications bringing people together in virtual reality from over 160 countries to attend meetups, comedy shows, yoga classes, dance parties, and large-scale events hosted by NBC, Reggie Watts, Justin Roiland, Drew Carey and more,” reads the short statement provided on Microsoft’s press release. “With the AltspaceVR team onboard we look forward to building the world’s preeminent mixed reality community.”

Original article (08/15/17): While AltspaceVR is currently keeping details close to its chest, the venture-backed company appears to have found a solution to their recent financial difficulties, where they were unable to secure additional venture funding.

In a message to Road to VR, a spokesperson for AltspaceVR stated “We are now in discussions with third parties to develop a sustainable solution to continue development and growth for the future. We look forward to communicating more when possible over the coming weeks and months.”

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Since establishing itself as one of the first social VR platforms in 2013, the market has become increasingly diverse, with the likes of Bigscreen, Facebook Spaces, JanusVRRec Room, and more offering different social experiences. Despite the competition, AltspaceVR says they’ve been able to retain about 35,000 active users per month, some of whom were passionate enough about the platform to talk about their memories and connections they had made, offering donations and encouragement to the team after the closure was announced.

“In the meantime, AltspaceVR is up and running for our user community and SDK developers with the help of a skeleton crew”, AltspaceVR tells Road to VR. “We will be rebuilding the calendar of events over the next few weeks. The staff will serve during peak times and certain other select hours to welcome new users, moderate as needed, and help with troubleshooting and technical questions.”

The surprise announcement of the closure would have surely piqued the interest of potential investors; indeed Oculus founder Palmer Luckey asked the public for their thoughts on whether he should ‘save’ the platform. It’s unclear whether he is actually involved in the turnaround, but his most recent tweet is about AltspaceVR’s good news.

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  • cirby

    From the numbers, it seems they could make up the funding shortfall with a very small fee (as in $1 or $2 per month) from their users. If you can’t run that site with a $70,000 per month funding base (plus whatever ads and sponsorship you can dig up), you’ve got other problems…

    • Mike

      True, though any more than $1/m would probably make a lot of people have second thoughts.

    • I think it’s safe to assume that people who don’t actively use the platform will not be willing to pay for it. When you consider that their MAU numbers are mostly people who are one-time or casual users you wind up with few who will be willing to foot the bill. This is supported by their Steam usage stats: https://steamspy.com/app/407060

      If AltspaceVR’s datacenter costs are anything close to those of running a High Fidelity domain then an ARPU of $2 per month for people who are actually willing to pay would still leave them bleeding money.

  • It’s very strange… first they close. Some days later, they don’t close anymore. I’m happy about it, but I find it weird

  • Skippy76

    It was never shutdown in the first place.
    I’ve been going on every day since they announced the shutdown and there was never a problem connecting or chatting with others

  • Ted Joseph

    I tried it for a few weeks, but quickly lost interest. There has to be a way to use a community experience as a gateway to play each others personal library of games, quickly join parties, cross game chat, etc. I couldn’t find that. It felt like we were running around in simple, silly cheap gimmicky spaces that quickly lost appeal…

  • sfmike

    Like Altspace but hate their avatars.

  • WyrdestGeek

    Micro$oft…

  • Kris Bunch

    BigScreen is a better virtual space than AltSpaceVR. I hope they keep Oculus access for AltSpaceVR and not make it Windows VR exclusive.