Roblox users are highly engaged and (mostly) young audiences
The creative possibilities of the user-generated games on the Roblox platform are appealing to many gamers, especially children and young teenagers. However, the platform’s player base is getting older and currently, over half of Roblox's user base was 13 years or above.With this target audience, the platform also makes a point to address parents and highlights the ways in which it ensures that Roblox is a safe online environment for children, especially as gaming usage and screen time increased during the global coronavirus pandemic. Roblox has become a popular digital hangout platform for young gamers.
As of the fourth quarter of 2022, there were approximately 58.8 million daily active users of Roblox games worldwide. Gamers accumulated over 12.8 billion hours worth of global user engagement with Roblox experiences in the most recently reported quarter. The most popular Roblox games of all time based on plays include pet adoption game Adopt Me!, city exploration Brookhaven, and obstacle course Tower of Hell, having each generated over 20 billion lifetime plays.
Making money through Robux
In 2022, the annual revenue of Roblox Corporation amounted to 2.23 billion U.S. dollars, with an annual net loss of 930 million U.S. dollars. The company generates almost all its revenue through the sales of virtual currency, Robux, which players can use to purchase virtual items sold by the Roblox developer and creator community on the platform.Infrastructure, as well as product research and development spending, account for about 70 percent of all operating expenses of the company. Additionally, Roblox spent more than 623 million U.S. dollars on developer and creator payout in 2022. At the end of that year, there were approximately 4.2 million developers and creators who earned Robux on the Roblox platform, out of which only 11 thousand were qualified for and registered in the developer exchange program which allowed them to convert their Earned Robux to real money.
Trying to profit off the metaverse trend
Gaming is regarded as one of the industry sectors that consumers are most interested in engaging in the metaverse. Roblox parent company Roblox Corporation filed to go public in November 2020 and started trading on March 10, 2021. The IPO created headlines as the company’s stock closed at a first-day market cap of 38.26 billion U.S. dollars, ahead of gaming industry heavyweights Ubisoft and Take-Two Entertainment. Roblox is generally seen as one of the first movers in the metaverse market and its stock surged at the end of 2021 when the metaverse hype reached the mainstream. However, the gaming company’s stock performance declined massively in 2022 due to slowing business growth after the COVID-induced boom, as well as other economic factors such as inflation and foreign currency exchange.Despite being one of the first companies on the market and already boasting a major audience and robust digital ecosystem, Roblox trails its competitors when it comes to metaverse brand preference. Additionally, while ranking among the leading gaming companies in terms of user awareness, Roblox lags behind its cohorts in terms of brand popularity. Roblox has faced criticism regarding the financial exploitation of creators, many of which are children, as well as insufficient content moderation within its virtual worlds, making them unsafe for a large part of its user base.
