Roblox makes real progress from its virtual worlds

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    Remember the Metaverse? Not so long ago, a wave of excitement for this digital realm swept over Silicon Valley. Some of the world’s most powerful technology companies have poured billions of dollars into exploring new virtual worlds and have begun touting their potential to those of us still living in the real world.

    Facebook changed its name to Meta Platforms to reflect this new focus. Microsoft has agreed to buy video game group Activision Blizzard for his US$68.7 billion (NZ$110 billion) deal, the largest acquisition to date “providing the building blocks” for this new domain. claimed. Even Disney has set up a department to look at how it can play a unique role in what it calls the Internet’s “next frontier.”

    For Roblox, a platform for games, game creation, and virtual worlds that launched almost 17 years ago, the sudden surge of interest in the Metaverse has been interesting. “Has the hype helped us? We want to turn around,” Chief Technology Officer Daniel Sterman said. Perhaps his business growth was at least partially “driven by the hype”.

    The Metaverse wave faded almost as fast as it emerged. That excitement has been replaced by apathy, which has led the Wall Street Journal to call it the “Meh-taverse” recently after it reported that Disney closed its dedicated division while it moved to cut costs. Even Meta emphasizes its focus elsewhere.

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    Roblox doesn’t like the term Metaverse, which was first coined in Snow Crash, a 90s sci-fi novel by Neil Stevenson. The San Mateo, Calif.-based company likes to talk about his immersive, three-dimensional digital experience. Its user-generated games and worlds can depict anything from live murder mysteries to Sir Elton John-inspired spaces.

    Whatever you call your virtual universe, an average of 67.3 million people were using it every day in February, up 22% year over year. Roblox has a young user base and is very popular among pre-teens, but it is slowly “aging”, according to Chief Product Officer Manuel Bronstein. The fastest growing age group is between he’s 18 and he’s 24.

    This platform relies on two communities. A user who digs into the game and his 3.5 million developers who created the game. Further experience with that platform is likely to attract more users, and more users may persuade developers to bring more experience.

    Game creation platforms have matured in the wake of the pandemic.

    SOPA Images/Getty Images

    Game creation platforms have matured in the wake of the pandemic.

    Rather than betting their home on virtual reality headsets, Roblox tried to make that world as universally accessible as possible. Mobile is the largest source of traffic, but desktop computers and game consoles remain important.

    After going public in New York two years ago, the company made an impressive debut. After Roblox showed solid growth amid growing interest in the Metaverse, its stock reached its peak of $134.72 in the fall of 2021, boosted by a sharp increase in activity on the platform during the Covid pandemic. Did.

    It then plummeted to $23.19 in May last year, half a year after falling short of Wall Street expectations, prompting fears that the early rise in Covid-19 was temporary. The world has reopened and children are back in school. Q4 2022 revenue growth slowed to just 2% from 83% 12 months ago.

    Since the turn of the year, however, investors have started to turn their attention to business again. The company’s shares are up 61.5% so far in 2023, and on Friday he closed at $44.98. In recent months, Roblox has been trying to demonstrate growth beyond the pandemic. The group made $214 million to $217 million in February, an increase of 20% to 22% on an annual basis. Reservations – Sales of Robux, a virtual currency that users can spend on in-game items, increased by up to 19%, from $243 million to $247 million.

    Roblox executives argue that recent years have emphasized more lasting change, not fads, especially among children. During the pandemic, Bronstein asked his kids what they were doing when they were playing games online. His usual response was, “I’m going out with my friends.”

    According to Bronstein, “Spending time together online is a very good indicator of spending time together in real life.

    “I don’t mean to replace spending time together in real life. I want my kids to go out, play sports, see their families, play with their friends. But it’s always the same. It’s not always in place.”

    Roblox is a gaming platform, but its ambitions extend beyond games. Business executives have a hard time thinking about areas they think they can’t transform. They point to retail stores where consumers can actually shop with friends even when they’re far away, and schools where students can explore Mars without leaving the classroom.

    To maintain a steady stream of new content, Roblox needs to keep the people who create it happy. We need to make sure the people building these virtual worlds feel well rewarded, as they will earn more from trading within these virtual worlds. On average, the company pays developers 29 cents for every dollar spent on experiences. It’s also used for costs like App Store levies imposed by Apple and Google, but they’re also asked to give more shares to creators.

    Starman said Roblox both tried to build a model that “provides as much reward as possible.” [from] creative endeavors to creators wherever possible, and sufficient funding to build support for them, including cloud computing infrastructure.

    He said the developer was crucial to the group’s success. “The fact that we have a platform allows us to sit down and use that platform in ways we never imagined. [it’s] What makes this platform’s content fresh is why it’s not just a passing fad. Because we see fads come and go in our platform experience, but the platform remains and continues to grow. “

    – The Times, London


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