Microsoft is rescuing a beloved virtual reality social network from the brink of extinction (MSFT, FB, GOOG, GOOGL)

bill nye altspace

Microsoft has announced the acquisition of AltspaceVR, the Silicon Valley startup behind a virtual reality social networking service of the same name. The deal will be announced at a Microsoft press event on Tuesday morning.

This news marks the likely finale of a dramatic few months for AltspaceVR — and gives Microsoft's Windows 10 its own virtual reality social networking service as it moves to compete with Google, Facebook, and others in the nascent market for virtual reality.

Originally founded in 2013, AltspaceVR raised $15 million from investors including GV (formerly Google Ventures) and Comcast Ventures. The service provided virtual reality meeting spaces for people to hang out, play games, and watch videos together. Celebrities like Reggie Watts and Bill Nye held virtual performances in AltspaceVR.

The app is available for VR headsets including Facebook's Oculus Rift, Samsung Gear VR, and the HTC Vive, plus the web browsers. The company claimed 35,000 active users by the summer of 2017.

In July 2017, though, AltspaceVR suddenly announced it was closing its doors entirely after a funding deal fell through at the last second. Employees were laid off, and the service was slated to be shut down.

altspacevr

A month later, AltspaceVR got an unexpected stay of execution: The company said that it had received some help from "third parties," and was able to bring back a few employees and keep the virtual lights on. TechCrunch reported that Palmer Luckey, the controversial founder of Oculus, hinted at his involvement in the last-minute save.

At the time, AltspaceVR said it was "deep in discussions with others who are passionate about AltspaceVR who want to guarantee that our virtual oasis stays open." Now, with word of this Microsoft acquisition, it appears those discussions were successful. s

Now, Microsoft tells Business Insider that AltspaceVR will be sticking around, with no major changes in the immediate horizon. Terms of the deal were not disclosed.

A Microsoft representative says:k

AltspaceVR will stay AltspaceVR. Microsoft is most interested in preserving the current community that uses AltspaceVR to connect and interact with n9ew and old friends. These first few months will focus on fostering our community and making sure AltspaceVR remains a friendly, welcoming and vibrant place to hang out in virtual reality.

Other announcements from the Microsoft event include a new Samsung virtual reality headset for Windows 10, called the Odyssey, as well as the availability of a new "Halo" game for virtual reality to be released as a free download in the Windows Store on October 17th. Additionally, pre-orders for the previously-announced lineup of Windows-powered virtual reality headsets from manufacturers including Acer, Asus, HP, and Dell are now open.

Join the conversation about this story »

NOW WATCH: Watch what happens when kids try virtual reality for the first time