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Former Valve initiative CastAR shuts down

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About 70 employees laid off, Eat Sleep Play shuttered

CastAR headcrab prototype
CastAR headcrab prototype
Jeri Ellsworth

CastAR, the augmented reality start-up co-created by two former Valve employees, laid off its staff, shut down internal studio Eat Sleep Play and closed its doors today, according to now former employees.

Less than 70 people have been laid off between the Palo Alto headquarters and its Salt Lake City studio which was comprised of former Eat Sleep Play and Avalanche Software employees.

A core group of employees are working to try and sell the existing technology, a source tells Polygon.

We’ve reached out to CastAR and Eat Sleep Play for further comment and will update this story when they reply.

Jeri Ellsworth and Rick Johnson launched the company in 2013 after leaving Valve with permission to take their AR research with them.

The company, which had plans to launch its self-contained AR glasses later this year, was backed by finance group Playground. But, according to former employees, Playground Global declined to invest any more in the company last week. The company also failed to land any Series B funding from other potential investors.

With no current backing and no future financial prospects, the company was left without any money and was forced to shut down.

The layoff news hit this evening. The entire staff of the Palo Alto company was called into a big meeting and told the news, according to those present. Everything is being liquidated, they were told.

Jeri Ellsworth and Rick Johnson

The news comes months after co-founder Ellsworth spoke to Polygon at length about her past and the future of augmented reality and CastAR.

The tech behind CastAR came out of work Ellsworth and Johnson did while researching hardware, AR and VR at Valve. When Valve decided not to back AR, the company allowed the duo to leave with the research to form their own company.

Technical Illusions (which would eventually be renamed CastAR) launched a CastAR Kickstarter in October 2013; the campaign hit its $400,000 goal 56 hours later. By the time it wrapped up, the funding drive had raked in a bit more than a million dollars.

With that first million, the company made developer units and got them out to a bunch of the Kickstarter backers and developers. Then it raised some seed money and used it to move out of Johnson’s home and into a real office in Silicon Valley. Once moved, the company went to venture fund and design studio Playground Global to raise $15 million. It was Andy Rubin, one of the fund’s founders and creator of Android, who not only backed the concept, but convinced Ellsworth and Johnson to essentially start from scratch.

They knew that the Kickstarter product was really not the sort of device they had always wanted to create. They wanted a self-contained unit that is its own sort of platform.

So Rubin told Technical Illusions that it should return all of the money it raised through the Kickstarter campaign. The company agreed, but also decided to still send out the promised units to those backers.

Late last year, Eat Sleep Play, the developers of the 2012 reboot of Twisted Metal, joined CastAR. The group teamed up with a collection of former Disney Infinity developers from Avalanche Software to form a new studio focused on AR software development in Salt Lake City.

While virtual reality has received a bulk of the attention when it comes to reality technology, interest in augmented reality has recently been on the upswing. Facebook earlier this year announced its intentions to invest more heavily in AR.

Both Apple and Google have shown interest in AR.

Update: Another source has updated Polygon with more information about the current state of CastAR. The story has been updated to reflect that a core group is still trying to sell the tech and that less than 70 were let go.