Roblox, a Lego game, went public, with a one-year valuation of $37.2 billion from $4 billion


Tencent Technology News reported on March 10 that roblox, a video game platform, was listed on the New York Stock Exchange on March 10, closing at US $69.5, with the latest market value of US $37.2 billion. Unlike the traditional IPO, roblox is listed directly. But in just over a year, why did roblox’s valuation soar from $4 billion to $37.2 billion?
Novel coronavirus pneumonia is a huge beneficiary of the new blockade of Roblox. In 2020, roblox’s daily active users have increased by 85% to 32.6 million, and players’ time spent on roblox has more than doubled to 30.6 billion hours.
Roblox said in its latest prospectus that it paid $328.7 million to developers last year, up nearly 200% from 2019. In contrast, roblox’s total revenue last year was $923.9 million, up 82% from the previous year.
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Ethan Gawronski was about 10 years old when he discovered roblox, a video game platform. He was addicted to games at that time, mainly for the purpose of associating with other children.
Today, 20-year-old gorensky and his girlfriend Elle deppe have developed their own games based on the roblox platform. In the past month, the couple, who met in the game, made $49000 from the action game bad business by selling players clothes and weapons that can be used to make their characters look cooler and perform better. “In the individual developer community, some people make a lot of money and we think we can do it,” depe, also 20, said in a recent interview.
Bad deal is one of the games created by millions of users on roblox. After a valuation of $29.5 billion in January, roblox will be listed directly on the New York Stock Exchange on Wednesday. By turning young users into game creators without forcing them to learn complex coding, the company has created the most popular apps for apple and Google devices. The company rewards developers with a 30% share of in app payments.
Roblox said in its latest prospectus that it paid $328.7 million to developers last year, up nearly 200% from 2019. In contrast, roblox’s total revenue last year was $923.9 million, up 82% from the previous year.
Among roblox’s individual game developers, more than 1250 earned at least $10000 worth of digital currency robux; more than 300 earned more than $100000. As a virtual currency that can be used to purchase virtual goods and enhance roles in roblox platform, robux can be converted into cash.
Roblox told potential shareholders to adapt to the company’s huge expenses. At a roadshow last week, the company said it plans to pay more to creators to motivate higher quality content and to fund a larger team of engineers, designers, artists and producers. David baszucki, the chief executive who founded roblox in 2004, said: “hobbies in the past have become personal work, and now they are increasingly becoming the basis for the large, incredible creative studios that appear on our platform.”
On Tuesday, the New York Stock Exchange set a reference price of $45 per share for roblox’s direct listing, which is the same as roblox’s valuation when it was raised in January, but the reference price does not necessarily represent the stock’s opening price on Wednesday.
After two years at Grand Valley State University, gorensky dropped out last semester. During his study, he changed majors many times. Depe completed a two-year associate’s degree in Portland, Oregon, and thinks that’s enough. They have been living in an apartment in Grand Rapids, Michigan, since last year.
The couple met for the first time at the ROBLOX Developers Conference in 2017. They soon started working together, and two years later, they were invited to participate in the roblox accelerator project in San Mateo, California, where they started developing the bad deal. “The goal of the accelerator project is to develop some fully profitable games,” goronsky said. Since last September, bad trade’s monthly revenue has grown by an average of about 30%. “It was a bit risky, but it worked out in the end,” he said.
Goronsky and depe update the game weekly with new weapons, maps and other features. In the process of development, they added one full-time employee and eight contract workers.
Benefit from COVID-19
Novel coronavirus pneumonia is a huge beneficiary of the new blockade of Roblox. The epidemic forced children out of the classroom and away from their friends. As there was no school to go to, the birthday party was cancelled and the children turned to roblox, where they could socialize virtual, browse theme parks, attend concerts and play action games, as well as keep in touch with its popular text chat feature.
In 2020, roblox’s daily active users have increased by 85% to 32.6 million, and players’ time spent on roblox has more than doubled to 30.6 billion hours. This unexpected and unprecedented growth presents some challenges to the roblox developer community. The company has to fight a large number of spammers and scammers as they try to take advantage of millions of children who are ready and willing to spend their parents’ money on robux.
Pop ups in the game attract users with the promise of free robux, provided they fill out a questionnaire and then re navigate them to other websites without robux or even more spam. In some cases, roblox developers unknowingly installed a malicious plug-in from the game development studio and infected their own games.

“Because of the popularity of our platform, we believe we are an attractive target for such attacks,” roblox said in the prospectus. The company said it was investing in ensuring that external parties did not have access to user data and preventing phishing, spam and malware as much as possible.
Roblox’s second biggest spending after developer costs is infrastructure, privacy and security. These expenditures rose 69% last year to $264.2 million.
Alexander Hicks, developer of the role-playing game robloxian high school, said he noticed that in the early days of the pandemic, when new users proliferated, the number of spam also increased. But he said roblox moved quickly to restore order. Hicks has a strong economic interest in keeping roblox’s website clean and prosperous. In 2020, his game studio red Manta’s revenue at roblox doubled to $2 million.
In addition to Robson high school, redmanta has developed a number of games. After dropping out of Carleton University in Canada, Hicks went to Silicon Valley to start red Manta. “Robson high school” is now able to bring $50000 a month to Hicks, who is ready to re start his business with profits.
As an ambitious gamer with no real business experience, Hicks employs about 15 people, none of whom is over 22 years old. His company initially tried to replicate the success of Robson high school, but failed. Redmanta quickly ran out of cash and had to fire many of its early employees.
“I’ve done my best, so when the game starts badly, I can see that there won’t be enough money in our bank to continue to fund it in the future,” Hicks said. That experience allowed us to see how to scale up without taking too much risk. ”
Hicks’ business flourished last year, thanks to roblox’s rapid growth during the outbreak and the success of its second game. According to redmanta, the new game has 1.2 million active users a month. Because of the blockade, he also closed his Silicon Valley Office and temporarily moved to Los Angeles to rent with his friends.
Diversify investment and reduce risk
Redmanta currently has 10 employees in the United States and Canada. While developing the next game, they added new features to the two old games. “Our goal is to scale up so that we have multiple games and multiple teams to stay diverse, so that if the popularity of one game declines, other games won’t be affected,” Hicks said
Roblox may soon give developers another way to diversify: in-game advertising. So far, almost all of roblox’s revenue has come from virtual goods. Recently, the company launched an advanced subscription service, users can get a certain amount of virtual digital currency robux every month.
Meanwhile, roblox has begun to dabble in brand content, allowing companies such as Warner Bros., Netflix and marvel to market their products through virtual experiences. Pop band “why don’t we” held an exclusive launch of their new album at roblox over the weekend.
Sam drozdov, a former Facebook product designer, believes there is a potentially bigger untapped opportunity for advertising. In January, he launched bloxbiz, which allows game developers to display ads in games using 3D billboards and posters.
Some developers have placed static ads in their games, drozdorf said. Although in-game advertising is a fast-growing business in mobile, console and computer games, there is no advertising network connecting hundreds or thousands of roblox games in an automated way.
Bloxbiz is still testing the technology and hasn’t started making money. One of the company’s key challenges is to get brands to reach a large number of users while targeting the types of games they want to reach and avoiding those they don’t want to reach. For example, they may want to stay away from violent games, or pay more attention to those involving food.
Mr. drozdorf said that bloxbiz would share revenue with developers and mainly pursue full-time game developers who own popular games but don’t make enough money through robux. “Roblox wants them to make money, but many of them are still not making a living,” said drozdorf. We are interested in how to speed up this process and create a new profitable option for roblox game developers. ” (compiled by Tencent technology / Wuji)