Roblox’s business model is different from other companies that make large chunks of their revenue by selling their games and creating their own content. Roblox relies on its users being able to create immersive virtual worlds.
Forget Minecraft or Fortnite. Roblox is a game that parents all over the world know about. It’s fast consuming their children’s time and attention.
The company behind the pop culture phenomenon filed Thursday with US Securities and Exchange Commission to become public. It also revealed a larger goal that is the ultimate goal of gamers and science fiction aficionados: creating a virtual playground for billions. Roblox Corp’s impressive progress over the past year and its growing lead over competitors make me believe it is possible.
The impressive metrics of the San Mateo, California-based business are remarkable. The prospectus shows that Roblox’s bookings, the primary measure of gaming industry sales, soared 171% to $1.24 Billion in the first nine months of 2020 from $458 Million the year before. The number of daily users increased by around 80% to 30 million during the period. Perhaps the most striking statistic is that each of these gamers, who are mainly 12 or younger, spent an average of 2.26 hours per day on Roblox.
Video gaming is a great industry. Because of lockdown orders, a shortage of in-home entertainment options, and the pandemic, the entire industry has prospered. These Roblox numbers are far superior to its peers and will help convince investors to give Roblox the $1 billion or more they need to achieve its goals.
Gamers have been eying the possibility of living in a virtual world with life-like digital characters since the dawn of interactive entertainment. Roblox has set its sights on this goal. Roblox stated that it will invest heavily to make avatars with higher quality and to improve its audio and visual capabilities. The company filed that it intends to invest aggressively to make Roblox Platform more engaging and indistinguishable from real life. It also stated its mission to serve “billions” of users.
This is quite ambitious. Roblox gg scripts do similar things but at a lower level of fidelity. The current platform allows users to create virtual worlds and clothing and accessories that can be used as characters. It is only a matter of time before the industry has the graphics-rendering and computing power to create a real-world experience. Remember that Facebook In already serves billions. Roblox could also be there one day.
Roblox continues to grow its lead in virtual worlds. It has managed to create a self-sustaining community of creators and users, more than any other gaming company. It will be more difficult for competitors to catch up as the positive feedback loop between them accelerates. This is where a large number of people attracts high-quality content creators and vice versa. The numbers are already staggering. Roblox currently has nearly 7 million developers, who have created more than 18,000,000 gaming experiences. This includes millions of virtual items that gamers use to personalize their character. There is no other platform that comes close.
Money is also a language. Over the past year, nearly 1 million creators earned “Robux,” the virtual currency on the platform that can be converted to US dollars. 250 of these creators made more than $100,000. There are also opportunities for larger payouts. Roblox’s users are mainly younger, but they will be growing up quickly enough. Roblox claims that content spending is significantly higher for older users. Roblox’s younger users are a huge asset.
Roblox’s business model is different from other companies that make large chunks of their revenue by selling their games and creating their own content. Roblox relies on its users being able to create immersive virtual worlds. It’s proven to be a successful strategy. It has a lot of runways.