Social VR App AltspaceVR Is Shutting Down

by David Jagneaux • July 27th, 2017

When you establish companies and create things inside of a big new industry like the virtual reality marketplace you’re inviting a bit of risk into your professional life. Most VR companies right now are surviving on venture capital funding, limited software and hardware sales, or sheer force of will and passion in spite of dwindling bank accounts. For AltspaceVR, the landmark social VR application that quickly became synonymous with “hanging out” while in virtual reality, the runway has finally ran out.

Today the company announced that on August 3rd, 2017 at 7PM PT AltspaceVR will officially be shutting down. In a blog post entitled “A Very Sad Goodbye,” mentions of financial trouble outline the reasons for the closure. Similar fates befell the likes of Vrideo and Envelop as well.

“The company has run into unforeseen financial difficulty and we can’t afford to keep the virtual lights on anymore,” the company states in its blog post. “This is surprising, disappointing, and frustrating for every one of us who have put our passion and our hopes into AltspaceVR. We know it will probably feel similarly for you.”

For many people, myself included, AltspaceVR was one of the very first and very best ways to hang out with other people in a virtual space while wearing a VR HMD. Whether you were on a Rift, Vive, or Gear VR it was easy to hop on, hang out, play games, and feel like you were actually near one another.

However, AltspaceVR was free to download and use without much in the way of a monetization plan. “We’re a venture-backed startup,” the company states in the blog post. “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. 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.”

Additionally, the VR landscape has changed a lot in the years since AltspaceVR first released. Bigscreen has a lot of similar features and does certain areas of social engagement better, while Facebook Spaces could very likely take the place of AltspaceVR as the default way of “hanging out” with friends while wearing a headset.

We have reached out to members of AltspaceVR for comment on the nature of the closure and what’s next and will keep you updated on what we find out.

In the meantime enjoy the last days of AltspaceVR before it comes to an end. And don’t forget to let us know some of your favorite moments from the past couple of years in AltspaceVR down in the comments below!

Tagged with:

What's your reaction?
  • Michael Davidson

    This is less than ideal news 🙁 I kind of wish they would release the binaries to allow individuals to run their own instances of AltSpace, but I am confident that is a complete no go for more reasons than I feel like tying out.

  • Sami Tito

    castar vr
    Altspace vr

    Who’s Next ??

    • M0rdresh

      I know you’re trying to portray a certain doom and gloom, but not all VR disengagements are indicative for the state of VR industry. Crytek for example; the company faced financial difficulties already back in 2014 in the 2D gaming space and again late 2016, and continued in April 2017 with their Chinese branch with stories of employees not getting paid. Goes without saying that experimenting in VR is not exactly a short term strategy the company should follow to crawl out of this.

      Looking a the blog post about Altspace VR, the sad part here is that their monetization plan was not there. But let’s be honest here – a social VR space? Facebook’s own version is just way to big competition for any investor to invest in AltSpace VR.

      On a side note; we as consumers are to blame there as well, I think, we all want things free and whatnot. It all shows how difficult it is to survive in the VR space – the consumer can help there by realizing VR games cost money and being profitable is far from easy for these creators. We need to change our mindset a little there I think, not being blinded by just hours of entertainment – even-though I too understand the argument that 39 dollars for 4 hours is steep. But so is a restaurant where I blow through that in 2 hours – perception needs change folks.

      • Sami Tito

        ok AND what about Occulus studio, Castarvr Vrideo and Guerrilla Cambridge ?

        • M0rdresh

          What about them ? What are you trying to say ? Guerrilla Cambridge made games for the past 19 years, and their Killzone: Mercenary on the PlayStation Vita was not exactly a smash success with people wondering what is next for this studio. It’s no secret either Sony is restructuring their European studios. So yes, Guerilla Cambridge made the VR game RIGS: Mechanized Combat League for the PSVR, and yes it’s reception was rather average and yes Sony decided to close down the studio. This is all very sad news and unfortunate, but again there are more circumstances than what you are trying to imply; that these are all signs of doom and gloom for (or due) the VR industry (not to say it’s not a though business – see my earlier post), while the closure of studios are sadly part of the gaming industry as a whole.

          • Sami Tito

            Occulus studio was one of the most famous studio dedicated to vr moovies…and untill today, its impossible to understand why they decided to shut down it.

            Vrideo was leader about vr video online.

            and castarvr was a promising project in ra.

          • M0rdresh

            Not everything the (gaming) industry does makes sense (from our perspective), I don’t understand the closure of Oculus Studio either. But again, I think you’re wrong to tie all this events together and suggest a pattern like you seem to do.

          • Mane Vr

            It’s oculus story studio that close not oculus studio and oculus is still funding vr filming they just didn’t want a studio cause they don’t want to focus on movies and gaming

          • Bundy

            It’s Oculus, not Occulus. I’m no grammar nazi, but you spelled it wrong 3 times dude.

            They probably shut down their movie studio because the purpose of it was drive up VR interest for the early days. Now that more 3rd party studios are making movies and for profit. Oculus Story Studio and their free movies were simply going to be a disincentive for other studios to try and create their own films.

            I’m sad the studio got shuttered but understand it.

  • this isn’t a huge surprise… there never seemed to be much to actually do in altSpace other than chat and these days there are games that let you do that and more… and don’t get me started about those constant updates… one of the reasons why I uninstalled the damn thing…

  • Jeremy Katherman

    Wow… so disappointing and sad. AltspaceVR has done so much fantastic work and established such an amazing community. One of my favorite apps. Usable on almost any platform, with or without VR. I’m genuinely sad. I really hope that this work lives on in some way going forward. It certainly will not be forgotten!

  • 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.