Roblox: Block-ing their way to the Metaverse? 📦
What is Roblox and how they are approaching the Metaverse?
Hi, Ravdeep here. 👋
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Remember the issue where I spoke about Fortnite and it’s quest for the Metaverse? Well, there is another contender in the gaming arena that wants to take us all to the Metaverse and fast!
What is Roblox? 📦
Roblox is not exactly a game but a platform and a storefront where gamers can go to play games. Developers are allowed to list their games on Roblox and people can play these games. One thing that makes Roblox stand out is that all the games listed there are made by its users. Currently, the official website boasts that its users have published over 20 million games on the platform.
What is so special about Roblox? 🤔
People are making a ton of money on Roblox, whether it be kids or adults. Some of these developers are earning up to $1 million in a single year by monetising their games. Although the games are free to play, users can buy and spend a virtual currency called Robux on cosmetic items which do not make a difference on the gameplay, just on how your character looks in-game. Roblox developers take a percentage of these transactions in the form of Robux which they can later redeem for real money (once they reach a certain threshold).
Some facts about Roblox: 📝
Roblox went public a while back, starting with $45 a share as the reference price and closing at $69.50 a share, ending up with a market cap of roughly $45 billion. For reference, Epic Games, creator of Fortnite and the Unreal Engine, was valued at $17.3 billion at the end of 2020, although Epic is still a private company.
Roblox has 32.6 million daily active users. That is up from 7 million daily active users in 2016.
There are 7 million developers on Roblox.
Roblox had 5.7 million concurrent users during the platform’s all-time peak usage.
Community developers have made over $200 million on Roblox.
67% of Roblox users are under 16.
33% of Roblox’s daily active users are based in the US & Canada. That amounts to 11.5 million daily active users in the US & Canada.
The company’s recent SEC filing (Form S-1) reports that Roblox has 10.4 million daily active users in Europe. Which equals 29% of Roblox’s total worldwide user base.
8.43 billion hours of user engagement on Roblox was registered in Q4 2020 (an increase from 2.1 billion vs. late 2018). Roblox added 5.01 billion hours of engagement in the first 3 quarters of 2020 alone.
Roblox daily active users spend an average of 156 minutes (2.6 hours) per day on the platform.
72% of Roblox user sessions happen on mobile devices. The desktop platform also has a considerable share of 25%. The rest of Roblox’s users (3%) access Roblox via consoles.
Roblox brings in $242.19 million in quarterly revenue. An increase of 4x since 2018.
Let’s talk about Roblox and the Metaverse 🔮
You already know what the Metaverse is and how this term originated. Read below for more info:
What makes Roblox as close to the Metaverse it can be right now is the brilliant connection between the personalised avatar system and the millions of experiences that are present on the platform. You enter the Roblox world as your own user-created avatar rather than a main character that has already been scripted for you in a video game. Adding to that the user-generated clothing, hairstyles, accessories and skins coupled with a sprawling in-game economy, Roblox offers an opportunity to play and earn at the same time, making it the classic combo of a design and entrepreneurial experience.
Virtual fashion also plays a big role in the Roblox community. Users can be whoever they want to be on the platform which is an important part of their self-expression, be it in real life or the Metaverse. There was a recent Gucci Garden event which saw a virtual bag to be sold for approximately $4,115 whereas the physical bag actually sells for $3,400. The bag cannot be transferred out of Roblox, suggesting that some users place primacy on how their avatars look over being able to flaunt these items in the physical world.
So, does Roblox actually represents what a Metaverse would look like? ⚡️
Since the experiences we discussed are not only limited to gaming but a combination of gaming, media, entertainment, commerce and the future of social interaction, I guess it’s safe to say that Roblox is almost there!
Here's how Roblox described that vision in its prospectus:
We built Roblox from the start as a single platform, single name, single focus company that would someday support billions of users. The ultimate "product specification" was always to model reality, based on the belief that the more accurately we could simulate the real world, the more utility we could provide. Looking forward, we intend to maintain this focus as a single platform company, even as we expand the ways in which we enable people around the world to play, learn, and work together.
You can read through their prospectus here.
What does the future look like for Roblox? 🔭
The company has nailed some of the aspects like in-game economy, live events, games, social interactions and design pretty well. Although, the biggest challenge will be to convince people outside Roblox’s core demographic of kids and teens to come into Roblox.
Along with the challenges of demographics, the Metaverse in general faces a tech gap. People associate the Metaverse with AR and VR which is not exactly too friendly on the pocket right now. It is exciting to see where all this is headed and how social media companies like Facebook deal with it. I’ll keep you update about this as we all will be a part of the Metaverse soon!
Recommended reading this week:
Embracing the metaverse: Roblox’s ambitious vision for building online worlds - an interview with the Chief Business Officer of Roblox
Recommended listening this week:
Thank you and have a brilliant week ahead. Would be great if you could share the newsletter with your friends and family as that helps a lot and hit that little heart button!