It was hailed as the biggest virtual reality gaming centre of its kind outside of London.
The hospice created it after looking for imaginative new ways to generate income for its care services after being hit hard during lockdown.
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It also aimed to introduce more younger people to its work.
But Alice House has today (Friday, August 8) announced that NEVRlabs is to close for business on Sunday, August 14.
Despite regular custom and partnerships with schools and businesses, the hospice says the centre was unable to attract the level of income needed.
The ongoing impact of Covid and the cost of living crisis have been blamed, together with the forthcoming end of the Government’s Kickstart Scheme in September which funded many of the staff.
Ray Priestman, chairman of the hospice trustees, said: “Like many organisations in Hartlepool and beyond, we must invest carefully and focus on our priorities.
"As most people know, these are hard times for families, businesses and charities.
“We have made the difficult decision to close NEVRlabs and move all virtual reality services back to Alice House, returning the project to its original focus of offering entertainment and wellbeing support to Hospice patients.”
He added: “As the economy heads towards further uncertainty, we have reviewed our commitments and this is the most financially responsible thing to do, in order to help protect the future of the Hospice, which remains our entire reason for being.
"We would like say a special thank you to all the staff at NEVRlabs for their hard work, effort and enthusiasm – we wish them every success in the future and hope that they leave us with new skills and some happy memories.
“Finally, thanks to everyone else that supported us throughout this journey; we hope that your warmth towards Hospice care will continue and that we will see you again soon.”
Resources from the centre will either be repurposed in the hospice, based in Wells Avenue, Hartlepool, or sold.