‘Roblox’ goes public: How rich are the creators after the IPO launch?
It was at the innocent age of ten when Ethan Gawronski discovered Roblox, a game that he primarily utilized as a social tool. Today, at the age of twenty and with the help of his girlfriend, Elle Deppe, the couple who first met on the app now have their own Roblox game, Bad Business, in which they raked in close to $50,000 last month alone.
“In private developer communities, there were people that were making stupid amounts of money and we thought we could do that,” said Deppe.
Bad Business is just one example of the millions of user-created games on Roblox, which has officially gone public as of yesterday, having been valued two months ago at a whopping $29.5 billion. The company, which simplifies coding and allows today’s youth to be game creators, has built one of the top-grossing apps for both Apple & Google devices. But just how rich will the creators be after their IPO launch?
Crunch the numbers
In a recent statement, Roblox updated its prospectus that said it had paid developers $328.7 million in 2020, which is nearly up 200% more than what they paid out in 2019. More than 1,250 developers had earned at least $10,000 within the digital currency Robux, which of course can be converted into cash. Over 300 developers earned $100,000 or higher.
Today, Roblox is telling its tentative shareholders that they must get used to these hefty payouts, as the company plans to spend even more for its creators if it means developing a higher quality of content, while also funding bigger groups of game engineers & designers.
“What used to be a hobby has become a job for an individual person, and now is more and more becoming the foundation for large, incredibly creative studios who are emerging on our platform,” said CEO David Baszucki, who founded Roblox in 2004.
COVID creates cash
It’s no secret that Roblox was one of the very few companies that hugely benefited from the COVID-19 related shutdowns, as it not only forced kids to be removed from their classrooms but away from their friends as well. Kids, who had about as many plans as Garfield the cat, turned to Roblox as a social outlet, as it allows endless possibilities of entertainment, all while offering a popular text chat feature.
In fact, the company reported that its daily active users jumped nearly 85% in 2020 to 32.6 million, while the number of total hours spent on Roblox more than doubled to 30.6 billion. However, these numbers do come with a price, as with all the popularity comes the risk of more spammers as well as scammers, preying on kid users who have access to their trust fund.
“Because of the popularity of our platform, we believe that we are an attractive target for these sorts of attacks,” Roblox said in its prospectus. The company said it’s investing to make sure outside parties can’t access user data and to prevent phishing, spamming and malware as much as possible. In fact, only behind paying its creators, Roblox says that its second-biggest expense is in infrastructure, such as privacy & safety.
Future of Roblox?
Looking to help change things up for its creators, Roblox may soon be giving developers a new way to diversify in the form of in-game advertising.
So far, the majority of Roblox’s revenue comes from virtual items. However, Roblox did recently roll out a premium subscription service that allows certain users to receive a certain amount of Robux every month.
Now, it appears that Roblox has begun to dip its toe in branded content, where virtual experiences may now feature some familiar products from the likes of Netflix, Warner Bros., etc. As well, a former product designer at Facebook had recently launched Bloxbiz, where game developers & creators can show ads inside of their games, in the forms of 3d posters as well as billboards.
What are your thoughts on Roblox going public? Do you have any interest in being one of the many creators on this game developing platform? Would you have major questions marks as it pertains to cybersecurity and constant spamming? Whatever your thoughts, comment below and let us know.