Looking at Altspace VR’s closure

Courtesy of AltspaceVR

Update: AltspaceVR is hoping to remain open – see my update for more (such as was available at the time of writing).

Altspace VR, once regarded by The Verge as “one of the most fully developed platforms” for social VR, is shutting down. The new came via an AltspaceVR blog post, which was quickly picked-up by a number of tech media outlets.

In A Very Sad Goodbye, the company state:

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 any more. 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…

What happened?
We’re a venture-backed start-up. 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 fund-raising but have run out of time and money.

In all, AltspaceVR raised some US $26.3 million in funding through two rounds of investment, with US $16 million raised in 2014, and a further US $10.3 million raised in a second round of funding led be Raine Ventures. Techcrunch reports other investors including Comcast Ventures, Dolby Family Ventures, Lux Capital and Rothenberg Ventures.

Playing Dungeons and Dragons in AltspaceVR. Image courtesy of Techcrunch

Initially, AltspaceVR was seen as quirky given the initial avatars were simple in approach compared to virtual world platforms, but users who tried it out tended to be attracted by the platform’s ability to offer virtual spaces for socialising, giving the company something of a lead in the so-called “social VR” space which is now the subject of much talk. Fellow blogger and VR / tech expert Austin Tate was one of those who dipped his toes into the application, and he offered insight into things as it opened its doors, including a look at the interactive capabilities then on offer.

At its height, AltspaceVR reported around 35,000 monthly users on the platform, who use it for around 35 minutes each per day. That might not sound a lot by Second Life standards, but considering the slow take-up of VR outside of certain niche areas of early adoption, it’s actually not bad and perhaps indicates there is potential for VR environments where people can get together and share time and (web-based) content (the platform also offered a dedicated SDK for building “in-world” content and games).

Certainly, the take-up was enhanced by the push to make AltspaceVR genuinely cross-platform in approach and accessibility  – although some of the claims around the application, such as it hosting the “worlds first VR wedding” did cause some eye rolling among established users of virtual spaces given just how long wedding in VR (albeit without fancy headsets) have been going on. Nevertheless, the platform has developed a loyal and supportive community – and may have done as much as anything else to convince the likes of Facebook that there is something to the “social VR” thing.

Elsewhere, the news of the closure is likely to be seen by some as a stroky-chin-I-told-you-so moment, quite possibly with sagely negative nods towards the future of Sansar and similar platforms. However,while Sansar is making a play for the “social VR” space as well, it’s important to remember that AltspaceVR is a very different, more focused beast than Sansar, despite some (incorrectly) labelling AltspaceVR as “Second Life for VR” in the past.

The recent AltspaceVR MACH event featuring Bill “the Science Guy” Nye showcased the use of “social VR” space for outreach whilst also, perhaps, highlighting some of the applications’ limitations in terms of fidelity and immersiveness. Image courtesy of AltspaceVR

Sansar is clearly aiming for a much higher sense of immersion, with far more involved capabilities which will allow it to function as an effective platform across a range of potential markets and audiences and meet the needs of a broad range of use cases. However, it is perhaps a salient reminder as to just how nascent the current VR market really is, and why keeping a weather eye on how things progress  – and the time frames involved in seeing them progress – is vital.

In the meantime, AltsapceVR is unsure as to what might happen in the future, the blog post noting that the team has poured a significant amount of effort into the application, which might be “foundational” to the development of “social VR”. As such those behind the company would, “love to see this technology, if not the company, live on in some way, and we’re working on that.”

For those engaged in AltspaceVR, the announcement of the closure is worth reading through in full, as it offer tips on saving photos and friends lists, and how those using the SDK might see the web content they developed for AltspaceVR live on elsewhere. There’s also a note that come Thursday, August 3rd, there was be a final party in Altspace VR, which will culminate in the doors closing at 19:00 PDT.


16 thoughts on “Looking at Altspace VR’s closure

  1. There has long been a disconnect between developers and users on the importance of the avatar. Developers seem to see the avatar as secondary to everything else. Most users see an ugly avatar and they write off the rest of the VR environment.

    Liked by 2 people

    1. For those of us used to operating in immersive environments, undoubtedly the avatar is key – and developers working within similar environments are really aware of this – hence the work being poured into avatars within the likes of Sansar and High Fidelity. Sinewave are also looking to make their avatars more customisable. o I’m not sure the idea of a “long disconnect” is accurate.

      Within AltspaceVR, the avatar appearance was very probably one of the major factors that turned people like you and I away from it – together with the sheer depth of capabilities and activities already offered to us through SL and OpenSim. However, it would seem AltspaceVR’s closure was less to do with users engagement as a result of avatar appearance, as it was to do with the general state-of-play within the VR market where the growth just hasn’t – unsurprisingly – lived up to the over-egged hype, and more caution on the part of investors on where they are now willing to place their money when it comes to VR (and AR, given CastAR’s recent closure).

      Liked by 1 person

    2. With the twist that right now more ppl are hard core technogeeks using VR, so the demographics are not exactly the same. Oddly, there are other free VRs on the same hardware platform that had a full featured character creator so you would think that would be a big clue by four.


  2. $23 million dollars for a VR High-five, then they give up and shut down when they can’t get more cash…


    1. If the money isn’t there to pay for staff, facilities, etc., what other option is there?


  3. Anyone who has watched the comedy show Silicon Valley should realise that funding is all important and it’s a shame for Altspace that the market for VR has cooled a little. They have played an important role in terms of proof of concept but they are also unfortunate to be in a position whereby hardware developments are making investors and consumers pause for thought with AR currently being more flavour of the month.


    1. ” with AR currently being more flavour of the month” – possibly in terms of hype, but I still think that AR has far more potential than VR to be a major impact in multiple aspects of people’s lives, and that realisation is what’s starting to dawn elsewhere rather than it simply being a case of people turning to “the next big shiny” in the hope of being right. But again, it’s companies with the wherewithal to drive development and implementation which are the more strongly place – Qualcomm and Google for AR / MR, for example (and in that respect, LL with Sansar and “social VR”).


      1. I read an article on Gamasutra yesterday where the CEO of Electronic Arts said :

        “Not a lot of new news on VR for us, and as you see there’s not a lot of new news on VR in the industry. People seem to have come to terms with the fact that VR….is going to take a couple of years, at least, to kind of get to a point where it is truly a mass-market consumer opportunity”

        He also said he thinks AR is more interesting. Electronic Arts are the sort of companies who should be big players in both AR and VR so it’s interesting to read their views but it also demonstrates where VR is in development terms.


        Liked by 1 person

        1. I’d say “at least two years”, given earlier this year, Brendan Iribe at Oculus was predicting we’re around 2-3 years from the “next generation” of VR headsets (and in doing so was likely looking beyond the current form factor and things like the tetherless / lower-cost systems we’ve seen mentioned).

          I’ve little doubt that over time, VR will gain traction – there are simply too many use cases in art, design, entertainment, simulation, education, where it has such a good “fit” not to succeed. I just don’t believe it will be a all-pervasive in our lives as the bullish hype would have it – that will be AR’s future, simply because it has the potential to be far more broad-based and convenient in its use, with few of the issues that plagued the original Google Glass (wrong market, wrong time) nor has it any of the direct anti-social / inconvenient aspects of VR (e.g. the wearer being cut-off from there immediate surroundings and full interaction with those within it).

          In this, I’d still venture to suggest the VR’s future lies not as a “standalone” technology, but as integrated with AR to become “Mixed Reality” (or as Qualcomm would have it, “eXtended Reality”, wherein a single device offers access to both. We’re again a good ways off from that, but it’s easy to see such systems have a very broad reach, with AR being the practical spur for use and VR perhaps being the more entertainment-geared option for most users.


          1. That seems like a long estimate. Originally when you had the oculus there was a higher barrier to entry. Now it is a smart phone (itself pretty widespread) and hardware worth around #100 that often you get for free by buying the phone. Now there will be a lot of pressure to get an AR unit that does not feel like parking a mac truck on your nose.


            1. There will likely be intermediate steps, but Iribe was talking “next generation, rather than anything incrementally built-out from the current high-end HMDS. Was he being cautious? Possibly. However, Qualcomm have indicated that smaller, more lightweight & “natural” standalone VR headsets have some significant challenges (although they have started shipping the first of the VR SDKs for the Snapdragon chipset). Qualcomm is also deep diving into the technology required to “merge” VR and AR into “XR” self-contained headsets.


              1. I still think lightweight headsets will be the way to go at some point before it gets widespread adoption and sessions longer than 30 minutes or so long. I have thought of a few ways to do it over the years, although some of the tech involved has the problem of not being mature yet.


  4. Immersive VR is like the early internet, there is a wide range of quality out there as people experiment with different stuff. I would say altspace vr is like a 3d version of palace. The avatars were oddly simplistic compared to other similar products, but you went there for the social aspects.

    I saw you mentioned the Bill Nye thing. I went there but noticed a problem. There was no way to mute the audience. Worse, you could only see a few people and could not see who was voicing anywhere in the UI to individually mute anyone who left their mic on while vacuuming or something.


    1. Yup, agree on all points. Although SL also has its share of issues with people leaving microphones open as well, which can be particularly annoying in meetings!


      1. At least in SL you have a panel in the UI to see where sound is coming from. Altspace does not have that so you are pretty much out of luck. I muted everyone around me but knew that was not everyone at the event so the noise continued.


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