Roblox hunts older customers for video games and digital concert events in preparation for direct itemizing

David Baszucki, CEO of Roblox


Roblox expects adults to buy its shares when the company goes public next month. But she also wants it as a customer.

Roblox has grown into one of the most successful apps on Apple and Google devices with millions of user-created games for kids to hang out with friends, navigate theme parks, ride speedways, and adopt pets.

With the children stuck at home during the pandemic, sales in 2020 rose 82% to $ 923.9 million, while the number of hours spent on the platform more than doubled to 30.6 billion. Players spend money to dress up their avatars and get advanced features in games.

Looking to a future of sustained expansion and lower reliability for kids, especially when reopening classrooms and real-world theme parks, Roblox is aimed at older users and non-gamers. As the company notes in its prospectus, people over the age of 13 “have a higher propensity to spend on content, and our ability to increase penetration and user contribution from this demographic affects our ability to increase revenue.”

This was one of the key messages in Roblox’s online investor presentation on the Friday before the company’s IPO on March 10th.

A rendering of the in-game action from the hit Roblox game “Jailbreak”.

Source: Roblox

“We are increasingly targeting an older user base,” said CFO Mike Guthrie in the video. He said that usage more than doubled in the last year among people aged 13 and over, and that the population now accounts for 44% of daily active users.

However, even a 13-year-old is shy of being a self-sufficient adult, and the company hasn’t disclosed how many users are in their twenties, thirties, and beyond.

Roblox is taking several avenues to expand its reach beyond children. Within gaming, it strengthens its technology so that users can create more feature-rich content and the types of immersive titles that appeal to older gamers.

CEO David Baszucki, who founded Roblox in 2004, wants people to stop thinking about the company as a gaming site and instead consider all possibilities such as the so-called metaverse used in entertainment, education and other types of live events can be .

“When we go to concerts together, we dance together, talk to our friends, dress up,” said Baszucki in the investor presentation. “Concerts are not just something we consume. They are of course something we do together.”

Roblox has already started demonstrating its virtual concert hosting skills. For two nights in November, rapper Lis Nas X held a virtual performance in Roblox that drew over 30 million viewers. Participants saw the artist’s avatar enter the scene with the sound of his hit “Old Town Road”.

Baszucki said the company held its Christmas party on Roblox, with some employees staying on the main stage, others chatting in different locations, while some opted to “hang out in the virtual bar”.

In addition to entertainment and events, Baszucki envisions schools using Roblox for comprehensive teaching. Instead of sitting on a video call with dozens of other students studying physics, we can “get into the physics experiment together,” he said. Or instead of learning about birds, “we can be birds together,” foraging for food and seeing what it’s like to try to survive, he said.

In the question-and-answer section of the presentation, Roblox executives said they will be giving a financial perspective next week.

Right now, Roblox is a gaming app loved by kids and tolerated by parents looking for ways to keep their kids busy. That raised the valuation to $ 29.5 billion, according to a funding round in January.

Roblox spent $ 201.4 million on research and development last year, an 88% increase from 2019, in part to switch to new types of products. Whether older users are willing to pay for these virtual experiences as much as they do for their children’s entertainment is a big question for investors when deciding how to rate the stock.

In the Risk Factors section of its prospectus, the company says that a key factor that could affect future growth is that “we are not developing and establishing the social characteristics of our platform to enable it to more broadly serve the entertainment, education and business markets. ” . “

SEE: How Roblox became an immensely popular $ 30 billion gaming platform

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