What is Roblox and why it is now worth more than Electronic Arts
Roblox, born in 2004, is a platform: users can enjoy for free various games (adventures, sports, shooters - of all kinds) created by other users and can buy virtual items through Robux. It is available for PC, Xbox, Android and iOS. In the document sent to the Securities and Exchange Commission (the US equivalent of Consob) before going public, the company stressed that "we basically generate all our revenues through the sale of virtual objects".
Here are some numbers to frame Roblox: in 2020 it had a turnover of 932 million dollars, 82% more than the previous year. Over 1,250 developers have raised at least $ 10,000 with their creations; more than 300 have made 100 thousand. There are 8 million active developers. They are paid in Robux, which can then be converted into cash: in 2020, the company paid $ 328.7 million to the developers.
Most Roblox users, or 54%, have tra 8 and 13 years old. The main target audience is made up of players between the ages of 8 and 13, representing 54% of active users every day (over 32.6 million). Users can purchase items such as clothing or virtual gestures, not unlike what can be done in other gaming experiences such as Fortnite. Between Android and iOS, Roblox made $ 2.5 billion, half of which in 2020 alone.
Roblox's Initial Public Offering (IPO) started at a valuation of $ 45 per share: when the market closed, that value was over $ 64, which means Roblox is worth over $ 45 billions of dollars. Electronic Arts, for example, is worth 37 billion; Ubisoft 8 billion, Take-Two 19 billion, while Activision Blizzard is worth over 72 billion dollars.
Although its user base is that of the very young, over time Roblox has understood how the platform can actually transform itself into a more generic container. Already in November 2020, rapper Lil Nas X held a concert in Roblox, which attracted 30 million people, the first examples of what in the future will be the direction to take to further grow the platform. Roblox itself organized its own corporate party over the Christmas period on Roblox: employees could chat in various virtualized environments, such as a bar.
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David Baszucki, co-founder and CEO of Roblox. The strong growth seen during the pandemic stemmed from the fact that the kids stayed home from school, so they had more time to devote to video games. When the emergency subsides, Roblox could see a sharp slowdown in its revenues and platform growth. For this, it intends to create more and more content for users aged 13 and over: virtual concerts, for example, but also educational experiences that can be useful to schools.
This is because, the company explained at a recent presentation, users over the age of 13 "have a higher propensity to spend on content and our ability to increase user penetration and contribution in this age group will affect our ability to grow revenues. " Roblox co-founder David Baszucki used the term "metaverse" to convey the shape the company wants to give to the platform: a heterogeneous set of experiences; a huge virtual world where you can do a little bit of everything.
Children's games have pushed Roblox into a 39 billion dollar company. Now it looks to the biggest users to add the next 39 billion.
