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AltspaceVR’s shutdown & The Future of VR


Only a few days after Within’s influx of cash from a second round of investment, another key player in virtual reality shared the news that they were closing down the platform they’re famous for in large part because of a lack of investor interest.


The social app AltspaceVR is closing its doors on August 3rd. The forefather of the social virtual reality experience, AltspaceVR was built to be a social space in VR where users could hang out in virtual worlds. Of course they did ultimately find competition -- Facebook followed with their own version of a social VR chat which may have gone a long way to giving some investors cold feet; while others also showed up including Rec Room, Roblox, Linden Lab and TheWaveVR and will likely fill the void AltspaceVR will leave. But no matter how many imitators and competitors AltspaceVR will leave behind, without a doubt Thursday will still be a sad day for many fans.


The free app drew 35,000 monthly average users and the typical user averaged 35 minutes of use on the site a day. But while these numbers are excellent in comparison to similar applications, they are not likely large enough to allow for a worthwhile monetization within the free platform, the kind of thing used to such success within Second Life that AltspaceVR was considering. While the lack of scale may have been one strike against further investment, it’s also possible that slow growth of the virtual reality market was another.


The slow adoption of VR is bound to be a source of frustration for many, from those investors who may have gotten into virtual reality early to just VR enthusiasts who can’t wait for the advances that come with greater scale. While Within’s recent successful round of capital shows that there’s a clear appetite for a more traditional content-style company to play in a VR space, there’s little consolation in the realization that the truly ground-breaking VR may not get the same interest. Many big players have yet to jump into VR, likely preferring to wait until it makes more sense and there must be some other early innovators out there wondering if they too will meet the same fate as AltspaceVR.


The sad truth is that being a pioneer is risky. And while there’s definite reward for those who blaze the trail everyone eventually runs on, the journey to being a Facebook, for example, is littered with the bodies of Myspace or Friendster. AltspaceVR did groundbreaking work in VR and may still survive to fight on. What’s clear is that their namesake social VR app however is dead because investors didn’t see the growth required for their investment to make sense.