Roblox CEO hopes users capture a tenth of global gaming revenue on the path to a billion players
[ad_1]
Dave Baszucki, CEO of Roblox, said his company’s goal is to reach 10% of the global gaming market’s revenue and a billion daily active users.
To do that, Roblox will focus on three key areas, Baszucki said at the tenth annual Roblox Developers Conference in San Jose, California, today. Those areas are helping creators, bringing people together to scale their creations and audience and build their businesses.
More specifically, the company wants 10% of all gaming content revenue to flow through the Roblox ecosystem and be distributed within the community of creators.
Baszucki also announced Party, which will let friends more easily play their favorite games together. And he said the company is unveiling a new incubation project to develop a Roblox-created 3D foundational model to power generative AI creation on the platform.
Join us for GamesBeat Next!
GamesBeat Next is connecting the next generation of video game leaders. And you can join us, coming up October 28th and 29th in San Francisco! Take advantage of our buy one, get one free pass offer. Sale ends this Friday, August 16th. Join us by registering here.
The company is also announcing new opportunities for creators to earn, including commerce, which enables creators to sell their physical merchandise within experiences by integrating with e-commerce partners, the first being Shopify. Roblox also announced a higher developer revenue share for paid access experiences; and a Creator Affiliate Program that rewards creators for bringing new users to the platform.
The San Jose event will gather thousands of the developers, 3D artists, brands, and influencers who make up the global Roblox creative community. They’ll be connecting and learning about new features and products that are going to help the company reach its ambitious goals.
Huge numbers
The Roblox community is playing, building, communicating, and connecting more than ever, as evidenced by the 79.5 million daily active users (as of June 30, 2024) from around the world coming to the platform, Baszucki said.
Because of those growing numbers — and because the game industry has seen an unprecedented wave of layoffs in the past two years driven by dropping numbers — all eyes are on Roblox. Matthew Ball, CEO of Epyllion, wrote an essay recently analyzing the significance of this number of users — which on a monthly basis is two times as many as Steam users and three times as many as PlayStation users. At the same time, parents remain concerned about safety issues related to their kids on Roblox. Roblox continues to address such concerns, the company said, even as it expands ways for players to access the platform and communicate with each other.
In the second quarter of 2024, daily active users grew by double digits in each of the regions where Roblox is available — and more than 20% in the U.S. and Canada; Asia; and Rest of World. Of the 79.5 million users who come to Roblox daily, 58% are aged 13 or older. That age group saw 26% growth year over year in the second quarter of 2024.
The company said players engaged for 17.4 billion hours in Q2 2024, up 24% year-over-year. And about $893.5 million was generated in revenue in Q2 2024, up 31% year-over-year. And oookings were $955.2 million, up 22% year-over-year.
Over the past 12 months ended June 30, 2024, the company paid over $800 million to the creator community. Earnings of the top 10 creators grew five times in the past five years. The top100 and top 1,000 creators grew even more quickly.
Since opening up creation in April, the creator community has made 22% more 3D avatar items. Roblox was founded in 2006 and it has 2,400 employees. Roblox has 27 of its own data centers around the world. It is focusing on performance quality and it is reducing crashes dramatically, Baszucki said.
Reach for Roblox games can exceed that of Among Us, Elden Ring and more, he said. There are more than 400 brand activations on Roblox.
“When Erik Cassel and I founded Roblox in 2006, we were motivated by a question that still drives the company today: How do humans connect through play?,” Baszucki said. “We’re optimistic that the technology we’re building will play a part in improving human connection. The engaging experiences that make up the Roblox ecosystem bring people together. That has always been our goal. To get there, we will continue to focus on the four core growth vectors we set out at our direct listing in 2021: expanding around the world; making Roblox compelling for everyone; ensuring a broad range of use cases; and growing and improving our economy.”
Worldwide, Baszucki said the gaming market is huge: 3.4 billion people play games, and the gaming industry generates more than $180 billion in annual revenue.
“On our way to 10% of gaming content revenue, we believe we will reach approximately 300 million daily active users,” he said. “We believe that about 80% of those people will come to Roblox to play together, with the rest coming to shop, consume entertainment, learn, or simply communicate with one another.”
Bringing people together
This is where Roblox started. People play on Roblox every day in ways that are impossible elsewhere — and now it wants to make it even easier. He said the Party feature will enable friends ages nine or older to seamlessly group up, discover, and join their favorite experiences together. Party will also let friend groups communicate via text and (for phone-verified users aged 13 or older) voice, both within and outside of Roblox experiences.
The company will launch Party first with text and then with voice. It is scheduled to be available by the end of the year. Early next year, Roblox will add an application programming interface (API) that will allow developers to expand the Party experience. Developers will be able to teleport Party members to the same starting point, drop them into a private lobby, or pre-pair them into a team.
Baszucki said Roblox wants to help developers connect with their communities and make it possible for them to manage their communities from one place. To this end, the company is sharing that Roblox Groups is being rebranded as Roblox Communities.
Roblox Communities will continue to grow with tools such as Forums, which are dedicated spaces for people to share feedback on experiences, discuss gameplay, and report issues. Experiences that have large communities, like Blox Fruits, are preparing to try out this new tool.
“Over the past year, we’ve expanded our vision for search and discovery to surface, in a fair way,more diverse content on our homepage, making it easier for people to find their next favoriteexperience,” Baszucki said. “We’ve also begun to augment our algorithms with Today’s Picks (on the homepage and on Marketplace). And finally, we’ve increased the impressions available for sponsored adson our homepage to more than 8% (as of June 30, 2024), up from 1.6% for the quarter that ended March 2024.”
To help creators understand how discovery works, he said the company is sharing its commitment to open and transparent insight into search and discovery on Roblox.
“We’ll be open with our algorithm —what wevalue and how we reward attributes that drive distribution,” he said. “We will also provide visibility into how developers’ experiences are performing against these attributes. We are already seeing results from these changes: More experiences are breaking into the top 100. In the second quarter of 2024, there were 25 experiences on Roblox with more than one million daily active users.”
On search and discovery, Roblox is working on how new people find new content off platform. To support this, the company is announcing a Creator Affiliate Program that rewards developers for new users that they bring to Roblox. Creators will be able to set up unique links for their experiences, and if someone uses that link to sign up and purchase Robux, the creator will earn a share of the revenue that person generates from their Robux purchases — anywhere on the platform — for the first six months.
The company will test this program with a few creators shortly, enabling them to earn up to 50% on qualified purchases. Then it will begin accepting applications for the first version today, and Baszucki expects it to be available to all eligible creators by mid-2025.
Organic music discovery
Another piece of the vision for connection on Roblox is to become a destination for organic and immersive music discovery. Today, creators can make experiences richer by including high-quality music, and people will soon be able to discover new music, interact with immersive audio experiences, and connect with artists. Artists will have a powerful new way to expand their reach, cultivate fandoms, and build communities on Roblox.
The company will do this with new platform-level features like What’s Playing and Music Charts, where people can find popular and trending experiences or songs from breakout artists across the Roblox community, and artists will get an opportunity to build fandom and connect with Roblox’s global audience.
Roblox is also rolling out an integration with music distribution service DistroKid to offer eligible artists a straightforward and official way to upload and share their music on Roblox. This integration gives creators the ability to use the tens of thousands of songs provided by DistroKid to expand their experience alongside the opportunity for music discovery within the community. By the end of this year, Roblox will have a catalog of music on Roblox that spans genres, like electronic, pop, dance, rock, country, rap, and hip-hop.
Scaling creation and access
Roblox is focused on providing the technology to support scale — for performance, creation, and safety.
“We have already hit some incredible milestones here, including a record number of concurrent users, entirely powered by our infrastructure,” Baszucki said. “We’re driving performance and quality improvements throughout our technical stack, and we consider performance to be one of our biggest growth drivers. This year, we’ve improved app launch time, increased streaming adoption — which speeds up join times — and reduced crashes. We estimate that the improvements we made on Windows earlier this year have eliminated more than 300,000 crashes each day.”
The company has also focused on frame rate. For sessions with lower frames per second (FPS) on two to three gigabyte Android devices, Roblox improved average frames per second (FPS) by 24%. The company did this thanks to gains from its platform technology and from the use of the analytics dashboard by creators to tune and improve performance.
“By our estimate, we are on track to add more than 300 million hours per year of playtime due to these performance improvements,” he said. “We are also sharing a hint about where we’re focusing our platform efforts. We’re going to make it possible for a developer to host a high-performance, 100-player open world, sports or battle royale–type game on Roblox and have it run on 2 GB RAM devices anywhere in the world at good frame rates. We won’t stop until this is possible.”
To support these ongoing performance efforts, Roblox is sharing an early peek at a novel technology, Harmony, which optimizes all aspects of engine streaming on both client and server.
Harmony will include client-side balancing and optimizations of CPU, GPU, RAM, and bandwidth to ensure that every person has the best experience possible across devices. And, Roblox is exploring a Roblox-supported architecture for server authority for competitive games.
“We also want to make it easier to create great content at scale,” Baszucki said. “We’ve been building AI into Roblox for years with tools like Assistant, Texture Generator, and Avatar Auto Setup. But these only scratch the surface of what we have planned.”
Generative AI
Roblox is sharing some early demonstrations from an incubation project the company launched a few months ago with a team of researchers and engineers. This internal AI project will power generative creation on the platform. The 3D foundational model will be open source and multimodal, and it will power 3D generation through text, video, and 3D prompts.
“We see a powerful future where Roblox experiences will have extensive generative AI capabilities to power real-time creation integrated with gameplay,” Baszucki said. “We’ll provide these capabilities in aresource-efficient way, so we can make them available to everyone on the platform.”
He added, “As our developers’ content makes up more of the global gaming market, our commitment tosafety and civility on Roblox will not change. We provide a powerful global safety system that is both increasingly accurate and cost-efficient — which lets our creator community focus on building.”
And despite the negative Bloomberg story about child safety, Baszucki said, “Our goal has always been to make Roblox the safest place for people to connect. This year, we also released Ban API and Alt Account detection tools, which makes it easier for developers to remove policy violators from their experiences and prevent them from rejoining. As these experiences grow, our vision is that our developers will be able to participate in running their own communities as they see fit.”
Helping creators build their businesses
As Roblox’s share of the global gaming market grows, Baszucki said so does the virtual economy that has powered the creation of nearly 18,000 full-time job equivalents in the U.S. over the past seven years (based on direct and indirect jobs created). That number is very significant, considering that there were 10,500 layoffs in games in 2023 and 12,000 so far this year. Amir Satvat, who aggregates job data, estimated that a college grad trying to find a job in games had a 1% chance of finding work in the first year after graduation. So Roblox is a significant new entry level path for gaming.
“Our formula to reward our creators is working, and we’ve taken steps to make it more efficient,” he said.
In the coming months, Roblox will begin offering a new solution to help developers optimize in-experience pricing. Price Optimization, a recommendation tool, runs price tests to identify the most attractive pricing strategy. The tool will help creators thrive, he said.
As a fast follow, Roblox plans to experiment with including regional pricing recommendations. Optimizing pricing by region will enable developers to set prices tailored to local markets and users to see pricing that’s more reflective of their local economy.
This year, brands such as e.l.f. Cosmetics, Fandango, Walmart, and Warner Bros. started testing commerce on Roblox. People aged 13 or older discovered clothing and beauty products within experiences — and with a few simple clicks, these physical items showed up on their doorsteps. Some people even bought movie tickets for the Beetlejuice sequel that comes out today, via a virtual Fandango box office in the [Beetlejuice] Escape the Afterlife experience from Warner Bros.
“Early next year, we’ll enable eligible creators to sell physical merchandise directly from within their experiences,” he said. “We plan to integrate with various e-commerce platforms, and are excited toannounce our first partnership with Shopify. This means that creators who sell physical goods with Shopify will be able to sell those same products in a Roblox experience.”
The company will pilot this solution later this year with a handful of creators, brands, and e-commerce partners. Roblox is also announcing new economics, where developers will be able to price their paid access experiences for purchase in real currency value on desktop and earn a higher revenue share.
Experiences selling at $9.991, $29.991, $49.991 will receive 50%, 60%, and 70% revenue share, respectively. The company will roll this out for people to purchase on desktop this year, with plans tolater expand to other supported devices.
John Benyamine, cofounder of Moonrock, said in an email to GamesBeat, “Basically, with Roblox giving up to a 70% revenue share, this is them making a proper move to try and get premium games into their platform in a big way. We are already talking to game publishers about bringing significant popular game IP into Roblox, and this is just going to make it easier and more enticing. We fully expect big publishers and developers to look at Roblox as another viable platform for much bigger experiences.”
Seeing this on Twitter, Matthew Ball said it was a huge step for developers and Roblox.
“As we look to the year ahead, we couldn’t be more excited about the new products and features that are coming and the opportunities they’ll create for connection and play on Roblox,” Baszucki said. “We’re also excited to see how they’ll turbocharge more diverse content from our creators. We can’t wait to build it with you.”
[ad_2]
Source link