Rec Room of the social games platform raises US $ 100 million with a valuation of US $ 1.25 billion

The social gaming platform Rec Room raised $ 100 million at a valuation of $ 1.25 billion. Funding is yet another vote of confidence for user-generated content.

And so we have another contender for the metaverse, the universe of virtual worlds that are all interconnected, as in novels like Snow fall and Player One Ready.

Users as creators is a major theme in the latest gaming boom, which saw user-generated content platform Roblox go public and Overwolf raise $ 52.5 million for mods.

Existing investors Sequoia Capital and Index Ventures led the round with the participation of investor Madrona Venture Group. This news continues a year of unprecedented milestones for the young company.

Rec Room was launched as a free experience to play in 2016 and now has 15 million lifetime users. Revenue grew 566% last year as monetization came along, said CEO Nick Fajt in an interview with GamesBeat.

“We have seen strong growth in the past 12 months,” said Fajt. “We think that the Recreation Room can become a big, long-lasting business that fuses games and social networks. We think that this may be one of those things that really impact the culture. We think it may be one of the biggest games in the world. And therefore, we really want to invest in that future. “

It was not easy to get here, as the Rec Room started with a focus on virtual reality headsets. This market was touted in 2016, but took off more slowly than expected. Recreation room facing other platforms, including game consoles, PCs and mobile devices.

While VR still accounts for about 25% of the user base, the company now has other platforms that are bigger. Fajt said the company needed to find growth on other platforms.

“VR is still a very important part of what we do,” said Fajt. “We are probably still one of the two or three best VR apps.”

The Rec Room has more than 5 million rooms to explore and there are more than two million players who have created content in the Rec Room. Fajt said the company focused on making creative tools easy to use. One thing that worked was to allow users to charge other users’ game currency for selling their own items. And Rec Room also started a subscription service as an easy way for users to buy in-game currency.

“We definitely want the app’s appearance to be friendly, welcoming and accessible,” said Fajt. “This is a big part of what we do.”

In the recreation room, you can have fun with friends around the world and build everything from escape rooms to adventure games, real battle islands to birthday parties. The variety will continue to grow with incentives like the creator compensation program, which will pay more than $ 1 million to creators during 2021. Creators are adding 20,000 new rooms per day.

“We want people to move from hobby to career,” said Fajt.

In addition to just games, Fajt said the Recreation Room has become the ideal place for digital hangouts, creative classes, company brainstorms, office buildings, weddings and more. He said the target market is around 13 to 16 years old, compared to about 9 to 12 years for Roblox. And with Rec Room, players don’t need to know programming to create things.

In the long run, the Recreation Room can be a competitor to build the metaverse. At the moment, about 40 people can be in a room. But over time, this can change and become more like a metaverse.

“It looks like an interesting challenge as we move forward in AR and VR and I hope that Rec Room can play a big role in defining what this looks like,” said Fajt.

Among the challenges? Maintaining a happy environment and good behavior, as communities always need moderation, said Fajt. It will require machine learning and AI to ensure that rooms remain healthy.

Rec Room is available for iOS, Xbox, PlayStation, Oculus and Steam. The company has less than 100 employees. The company plans to hire many people.

“We are seeing growth in the game consoles and iOS,” said Fajt. “There are some interesting headphones coming, and we saw a large audience on Oculus Quest 2.”

As for raising money, Fajt said: “We were just looking around and saw that it was a good time to raise money. Whenever we can align the right partners, the right plan and the right price – it’s good. “