Some very sad news has come from the offices of AltspaceVR late last night. The first social VR app to launch all the way back in 2013 will be shutting down on August 3rd. Due to financial constraints, the social app that saw a regular influx of about 35,000 people every month will close the doors on the karaoke, concerts and blooming friendships that brought satisfaction to so many VR users.

“It is with a tremendously heavy heart that we let you all know that we are closing down AltspaceVR on August 3rd, 7PM PDT. The company has run into unforeseen financial difficulty and we can’t afford to keep the virtual lights on anymore. 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,” the company said in a blog post on their site.

Goodbye To Movie Nights And Improv Karaoke

Even though there are quite a few other social VR platforms available now, like TheWaveVR and Rec Room, AltspaceVR was the first, having been around before the consumer versions of Oculus Rift and HTC Vive even saw the light of day. Today the app is not only available on those platforms but on other VR and non-VR platforms as well.

What made AltspaceVR so unique was that the community was able to use the open SDK to create their own experiences for the platform. However, for those who weren’t proficient in the art of writing code, the space still made plenty of opportunities available. It was not uncommon to find community hosted virtual events. You could find people playing tabletop games, singing karaoke, watching movies together and just generally being jovial together. The company also hosted official events that included celebrities like Bill Nye and Jim Carrey.

Why Did This Happen?

So if things were going so well then what went wrong? “We’re a venture-backed startup. 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,” the company said.

Truly, AltspaceVR will leave a void in the lives of online VR players and the spontaneous hilarity and affectionate camaraderie that could always found on the app will be sorely missed. AltspaceVR will be holding a farewell party on the 3rd of August, after which the app will be shut down permanently. The company has implored people to reach out to the friends and contacts they made on AltspaceVR so they can keep in touch after the servers are shut down. “Make sure those connections live on past AltspaceVR. Because if you do, then what we built will really live on,” the company said in a heartfelt goodbye.

Is This An Indicator Of What’s To Come For VR?

While AltspaceVR was doing great in terms of getting people to use their app, the monetization side of things, unfortunately, wasn’t going so well. The company did get big investments from large companies like Comcast but was unable to actually start acquiring revenue from external sources. Which meant that they kept relying on investor capital to keep things going. This approach works in the beginning, but isn’t a great long term policy because investors do tend get irritated if they don’t start seeing a return on their investment after a while.

I don’t think this is an indication of the larger VR space since the industry keeps moving forward every day. While this situation is unfortunate, I don’t think what happened to AltspaceVR is the start of many similar incidents in the future.