Rec Room’s Big Plans for the Metaverse: “So Much More Than a Game”

One of the biggest apps in virtual reality just got a boost to become one of the biggest players in the next big technology trend, the metaverse.

Rec Room, a Seattle-based social gaming startup founded by people who worked on Microsoft’s early HoloLens efforts, announced Monday that it had raised $ 145 million. That brings the valuation to $ 3.5 billion, more than the nearly $ 3 billion Facebook was willing to pay when it acquired VR startup Oculus in 2014. Rec Room’s new funding, led by Coatue Management and involving existing investors Sequoia Capital, Index Ventures and Madrona Venture Group, will be used to grow the company and hire more people.

CEO Nick Fajt, who co-founded Rec Room in 2016, said the company saw a surge in user numbers amid the pandemic as people signed up to play games like paintball and laser tag, and race in vehicle rallies while chatting with other players. Although the company refused to reveal how many people log into its platform each month, it said they were up more than 450% in November from the same point in time last year.

Fajt said some of that growth was due to the company’s apps being added to iPhones in 2019 and Android phones this summer. He also found that users had created more than 12 million rooms in which to play games or chat. “It comes down to building a really strong community,” said Fajt.

But in its urge to grow, the company will face the competition. It’s the latest in a line of socially-focused apps that are thriving amid constant isolation from COVID-19. Other apps like the world building games Minecraft and Roblox as well as the online fighting game Fourteen days, became places of refuge for people to meet in the midst of the pandemic. Gaming network traffic jumped early in the pandemic and continued to rise.

Rec Room offers a virtual world where people can play games like racing and hang out online at the same time.

hobby room

People also spend a lot of time playing these games. When Roblox went public last year, an average of 31.1 million people a day signed up for its service, more than 80% more than at the same time in 2019. That November, a year later, Roblox said that it did Number rose again to 47.3 million.

This boom in digital worlds in which people can interact has led much of the technology industry to describe them with a new buzzword, the metaverse. Fortnite maker Epic Games discussed the concept when it described how its hit fighting game also includes live music concerts, celebrity get-togethers and even movie nights. Other companies have also joined this idea. Executives from companies from Microsoft to the dating app Match to cryptocurrency specialist Coinbase and even entertainment giant Disney talk about building their own metaverse.

Facebook co-founder Mark Zuckerberg was so excited about the Metaverse that he changed his company name in October. to meta. “In our DNA we’re a company that creates technology to connect people, and the Metaverse is the next frontier, just like social networks when we started,” he said at the time.

Facebook Connect / Meta-Event October 2021

Mark Zuckerberg believes that AR and VR will be the next big leap in computing.

Screenshot / meta

When Meta launched its Rift VR headsets in 2016, virtual reality was at the height of its hype. Investors invested money in VR startups while big companies like Sony, Google, phone maker HTC, and Microsoft discussed their visions for VR. But sales didn’t boom like smartphones did after Apple’s iPhone launched, and so people’s excitement about VR becoming the next big thing waned.

That has all changed as we were forced to rely on technology amid the pandemic. Joost van Dreunen, A professor at NYU Stern School of Business and author of the book One Up: Creativity, Competition, and the Global Business of Video Games, said he became less skeptical of social worlds when he saw people approach social distancing and got used to isolation by holding funerals at Zoom and children’s birthdays at Roblox.

“It can be a purely social thing for my child to sign up and play with their friends on a rainy day,” he said.

Create the metaverse

For Rec Room, the sudden excitement in the tech world represents both a huge opportunity and a warning that it will be challenged by some of the biggest names in the industry. Meta was already work on a free experience called Horizon Worlds which, like Rec Room, gives people the opportunity to hang out and play games in a shared virtual environment.

Fajt said one thing that will make his company stand out is that it isn’t tied to Meta’s platform like Horizon. Instead, in addition to VR, it’s available for free on Android, iPhones, PC, Sony’s PlayStation, and Microsoft’s Xbox consoles. It also doesn’t rely on advertising for revenue, but instead makes money selling virtual goods like new looks for characters.

So far it seems to be working. Console and VR users spend an average of more than two hours in the Rec Room and mobile device users an average of an hour. This is similar to the data Roblox released last year, which says that its users spend an average of 2.6 hours on its game.

“If you go into the lounge, stay there for a while,” said Fajt.

Rec Room also hopes to stand out through its community. The company has strict guidelines on abuse and bad behavior in place and offers tutorials on how to use its tools to mute or even vote on those who are causing problems. Rec Room has also started testing automated voice moderation, using a mix of community reports, human moderators, and automated tools to identify perpetrators.

“A lot of it is proactive,” said Fajt, adding that the company moderates more when a person first joins the platform to set the tone. He also doesn’t want to repeat the mistakes that led to it Mass harassment campaigns, Disinformation and other dangerous behavior that Meta, Twitter, YouTube, and other social media companies are now grappling with.

There is still a lot of work to be done. A Facebook employee once told his colleagues internally that he had not had a “good time” with the Rec Room on the Oculus Quest headset because someone was sharing the edited internal communication, according to Frances Haugen, a former Facebook employee. a racist slur chanted with the Securities and Exchange Commission, Congress, and a consortium of news organizations and reporters, including CNET reporter Queenie Wong. The Facebook employee tried to report the “fanatic” and Fajt said his team had banned anyone using the same racial slur around the same time.

Continue reading: While Facebook is planning the metaverse, it is fighting against harassment in VR

He also noted that Rec Room plans to improve its moderation systems as it grows, with the aim of correctly banning anyone who breaks the rules as soon as possible.

“We didn’t say Rec Room was an open community where you can do what you want,” he added. “We have a code of conduct and expectations of content that we allow and will not allow.”

Hopefully, Fajt says, these efforts will help create experiences that people will want to return to again and again. “It’s one of the most important challenges. When we look at the next step for us, it will be so much more than a game.”


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