The Metaverse and its ghost towns: Why social VR apps are struggling | heise online

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On June 1, 2026, at 9 p.m., the social VR platform “Rec Room” will pull the plug after ten years. A few weeks earlier, in March 2026, Meta had announced the end of “Horizon Worlds” in its current form. The company had sunk a significant portion of its double-digit billion-dollar budget into this platform to build a metaverse, including the necessary hardware. What was marketed a few years ago as the inevitable future of the internet has shrunk to a few functioning niches by 2026. A look at two decades of social online worlds shows why VR-driven platforms in particular are having the hardest time.

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A brief history of digital parallel worlds

The term “Metaverse” was coined by Neal Stephenson in 1992 in his novel “Snow Crash.” He used it to describe a persistent digital space where people live together as avatars. Long before tech giants like Meta discovered this idea, Linden Lab had already built a surprisingly comprehensive early model with “Second Life” in 2003. The open 3D platform had its currency with an exchange rate to real money, user-generated content, and thriving trade in virtual goods. Between 2006 and 2008, there was a veritable gold rush atmosphere on the platform, and many dreamed of wealth through virtual businesses.

Today, "Second Life" might seem a bit old-fashioned, but it still has a loyal fanbase.

(Image: Linden Lab)

“Second Life” reported 4.3 million residents in 2007. Although the boom gradually subsided, a stable niche has remained. Current community analyses show that “Second Life” in 2025 no longer cracks the mark of 50,000 simultaneously logged-in avatars. Including bots, the value settles around 35,000. Measured against the forecasts at the time that “Second Life” would become the next World Wide Web, this is sobering. Measured against what most successors have achieved, it is remarkable.

Other concepts pursued similar ideas with different means. “Habbo Hotel” attracted millions of teenagers with its isometric pixel graphics but struggled with scams, bullying, and a delayed mobile adaptation. “IMVU” established a 3D avatar chat with a creator marketplace, and “PlayStation Home” (2008 to 2015) was supposed to become the console metaverse. Sony's attempt failed primarily due to its bugs and an out-of-control budget. Revenue from microtransactions and advertising never covered development costs.

The VR wave and its failed social pioneers

With the return of consumer VR from the mid-2010s onwards, a new generation of social worlds followed. “High Fidelity,” founded by “Second Life” creator Philip Rosedale, raised $22 million in venture capital in 2015, only to discontinue its social VR activities in 2019. Linden Lab tried a restart with “Sansar” on Steam and gave up the project after moderate success. Microsoft also acquired a metaverse startup in 2017. “AltspaceVR” launched as a functional VR space with various rooms for stand-up comedy, seminars, roundtables, or company parties. Six years later, however, the Windows giant scrapped the platform. And so, platform after platform disappeared or shrank, long before the Facebook company scribbled “Metaverse” into its name.

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"Rec Room" has always pursued a playful approach, both in its content and its presentation.

(Image: Rec Room)

“Rec Room” seemed to be an exception for a long time. Launched in 2016, the platform consistently focused on crossplay between VR headsets, consoles, and smartphones, reaching 150 million users according to its statements. It integrated minigames, creative building tools, in-app purchases, and optional paid memberships. It was accessible, and it had a vibrant community. Nevertheless, it wasn't enough. The focus on user-generated content brought growth but only low margins. Paid content from “Rec Room” itself never went beyond a supporting role, and investments in new features like AI tools incurred more costs than they generated revenue. After an initial wave of layoffs in 2025, the announcement came that the service would be discontinued in 2026 after ten years.

Was fehlt: In der rapiden Technikwelt häufig die Zeit, die vielen News und Hintergründe neu zu sortieren. Am Wochenende wollen wir sie uns nehmen, die Seitenwege abseits des Aktuellen verfolgen, andere Blickwinkel probieren und Zwischentöne hörbar machen.

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