Why is Roblox Special?

This case study is perfect for:

1. Folks who are curious about why Roblox is so popular.
2. Those who are building in the gaming and social media space.
3. Anyone who is interested in exploring what the future of the internet(Metaverse) might look like.

I highly recommend that you read this case study from this PDF version for better readability.

Content Overview

1. What makes Roblox special?

2. A new era of social communication

3. An economy where anybody can participate

4. Empowering creators — The building blocks of the economy

5. Consumer-centric — Building the ideal community

6. Roblox — A platform beyond social gaming

7. Roblox 2.0 (A metaverse before it was cool)

8. Roblox of the East

9. Can Roblox answer this?

10. About the company

WHAT MAKES ROBLOX SPECIAL?

What makes a game special? Is it the immersive gaming element for the user, the gamified social communication factor? Or the empowered creator? Or maybe the open economy of the game? Well, the answers lie at the intersection of all these aspects, and only one company in the world has been able to find that sweet spot.

Let’s unravel all the aspects that make Roblox so special

A NEW ERA OF SOCIAL COMMUNICATION

“We believe ultimately that human co-experience — doing things together in a social platform for play is a new category. It’s differentiated from toys or games or social networking in that it’s people doing things together in real time.” — David Baszucki, Founder Roblox

We live in a world where people don’t interact with each other on social media platforms, they interact with the system(algorithm). Roblox is a beacon of hope that encourages people to connect in a fun immersive way. A platform where the algorithm does not hold the whip, but the users navigate according to their will.

What’s not right with the conventional social media platforms?

Loneliness is an economy and conventional social media platforms thrive on it. Be it TikTok, Instagram, or X(Twitter) the aim of these platforms is to glue you to the screen and show as many ads as possible. Every time you binge a reel/short the algorithm incentivizes your zombie-like endless scrolling habit with a quick dopamine hit thus keeping you hooked to the screen. You don’t live on social media platforms, a socially insecure version of yours exists there!

Similar to social media platforms, social networking apps such as WhatsApp and Telegram also have imperfections that can affect our communication. These platforms support two types of communication: Asynchronous and Synchronous.

In a podcast with David Baszucki, Garima Sinha (Senior Director at Roblox) explained the following:

Asynchronous communication → Here people just communicate but don’t share their feelings. Like when you’re texting your friend and he’s not online and he ends up replying to you after an hour when he comes online. In this form of communication, the true feeling of context and immersion gets lost. The text becomes bits of information, not the emotion the person is trying to convey.

Synchronous communication → In such a form of communication the engagement remains intact and the context of the conversation is easy to interpret because it happens in real-time. However, the emotions still remain lost because the expressions of the people involved in the conversation are not visible. Like When you and your friend both are online and texting each other but can’t see each other’s reaction.

The more immersive and expressive a platform gets, the better it helps its users to communicate. That’s the reason why WhatsApp, Messenger, and WeChat started with only text but then added emojis, stickers, avatars, and voice/video calls to make communication between users more immersive. Roblox takes this immersion to a whole new level.

Roblox is the next-generation social communication platform

Each group of internet users tends to have their own favorite social communication platform, and as new generations join the internet, they create new social platforms. The adoption of these new social platforms is driven by younger generations of consumers. That’s what makes Roblox the next big social communication platform because 67% of its daily active users are under the age of 18 and to them Roblox is much more than a game.

Roblox serves the same purpose for kids as Instagram and WhatsApp do for adults but in a meaningful way where the algorithm does not hold the whip, and the emotions of the users are conveyed to the fullest. Here’s how Roblox overcomes all the flaws of conventional social media and networking platforms.

How Roblox connects people

• Self Expression → On Roblox self-expression works not in terms of who you are in real life, but what you want to be. Everybody wants to be unique in today’s world be it real or reel world. Self-expression is the most important part of socialization. Roblox gives you the full ability to be unique by customizing avatars, and once people become who they want to be, they feel confident and are more likely to socialize.

• Communication (Real-time) → The communication on Roblox is always synchronous (real-time) because both the sender & receiver have to be online to communicate on Roblox. Features such as Voice chat, Avatar expression, and the upcoming immersive call will allow people to not only just communicate but also to share emotions in the most immersive form possible.

• Experience (Feeling events together) → Experiences are virtual spaces where the users socialize. These spaces are gamified to make sure that the whole process of expressing yourself & communication becomes fun. Roblox experiences are millions of hybrid casual games(short games) that enable users to connect in a unique way every time. Any boring mundane task becomes fun when done together with friends, that’s what Roblox’s multiplayer experiences do. They connect two users in a gamified world that encourages them to communicate and invokes the feeling of togetherness.

When you give people a platform to be whoever they want in a gamified place that is always online. You get the world’s most immersive social platform.

Roblox has introduced new elements to social connection:

• Instead of profile pictures, you have virtual avatars.

• Instead of photo filters, you customize your avatar.

• Instead of home feed, you have virtual spaces.

• Instead of texting, you communicate in gamified human co-experiences

Social media is evolving to become more immersive and expressive, with each generation shaping it to reflect their preferences. Roblox is the social media of the generation alpha (kid <12), a platform that has redefined the way people connect.

Games are the new way of socialization and where attention goes, commerce follows.

AN ECONOMY WHERE ANYBODY CAN PARTICIPATE

Right now, a lot of attention is going into Roblox and a few other game-like platforms. This means that commerce gradually but inevitably will follow. Businesses will slowly start to appear on those platforms leading to new economic opportunities.

What is a virtual economy?

Think of Roblox as a country that gets 66M visitors every day and these visitors try out experiences(games) & buy goods created by the builders of this country. To participate, Roblox asks the visitors to trade their regular money for its special ROBUX currency. Then there are creators who build experiences and assets for the country. To try out these experiences, the visitors pay creators in the form of ROBUX, and then creators mostly reinvest these ROBUX into developing more cool experiences and assets, leading to a never-ending cycle. This completely mimics the behavior of how a real country’s economy works. Resultant, Roblox has given birth to the world’s first virtual economy.

The never-ending cycle of Roblox Marketplace

According to Enrico D’Angelo (VP of at Roblox). The Roblox economy is built on three principles:

1. The economy should be seamless for anyone to participate
2. It should serve our community
3. It should empower creators of all sizes to launch and scale a business.

How these three principles empower the Roblox economy

1. Open Market place

Think of industries like Consumer electronics, Automobile, or Grocery retail, they produce products that you use in your day-to-day life, but are there marketplace open for everybody to participate? No. Let’s say you have a killer idea for a next-generation smartphone that would revolutionize the world. But the problem is, to build your smartphone you first need to register a company then hire engineers, and complete tons of formalities to enter the market.

On Roblox, you don’t need a company, engineers, or formalities to enter the marketplace. All you need is a computer with Roblox Studio. From a 13-year-old Sci-Fi geek kid to a 50-year-old game dev veteran, anybody can participate and build.

The open market of Roblox has attracted over 10.5M developers to build over 40M experiences, making it the world’s biggest 3D content creation platform. The marketplace managed over 3.2B transactions and distributed $1.1B among developers between 2021–22. (source)

2. Serving Community

Roblox says that it is built for its users and its community is at the center of everything they do.

When developing a native game on your own, you’d need to spend money on IDE subscriptions, cloud storage, platform maintenance, commission to the App/Play store, and on multiple other things but not on Roblox. They take care of every such formality for you so that you can focus on only the most essential task, aka making your game fun!

The developer community of Roblox consists of game developers, who build experiences, and Asset creators, who build customized avatars and accessories. Both groups get incentivized in a very unique and specific way.

Commission breakdown of a Roblox experience(game) developer

29% of the Roblox spent by the consumers is returned to the experience(Game) creators. This is a very good number, considering the fact that the developers don’t have to worry about anything else other than their game. After personally interviewing a few game dev’s myself I came to the conclusion that they seemed very happy with the way they got commissioned. One of my interviewees has been building on Roblox for over a decade, which made me realize that Roblox has consistently served the community for quite a long time.

Commission for Asset creators

The Assets on Roblox can be purchased in two different ways, either in the open marketplace or inside the experiences(games). Commission for builders varies in both the categories:

Here the platform fees compromise the amount for cloud, infrastructure & payment gateway.

How creators earn commission

Creators earn their commission from the dev exchange (DevEx) program. They are allowed to submit only one request per month on the DevEx program to convert Robux to Fiat (Real-world currency). The request usually takes around 7–10 days to process. Also, the minimum withdrawal amount is 30K Robux (approx $105).

3. Scaling the business

An economy grows as the number of ways its participants can make money grows. With time Roblox has significantly improved the number of ways its creators can make money.

Evolution of creator economy

Roblox has given birth to a fully functioning economy that sits at the intersection of games, creators, and real-world economy, with the future ability to go above and beyond physical limitations. A world where loyalty, exclusive access to benefits, and special discounts are interconnected to what you do in Roblox and what happens in the real world. That is why it is called Roblox economy, not Roblox monetization.

EMPOWERING CREATOR — THE BUILDING BLOCKS OF THE ECONOMY

“We learned very early on that our creator community is vastly better than we are at making just about anything… what we need to do is just unlock the barriers.” — David Baszucki, Roblox CEO

An economy is nothing without its participants, and Roblox has empowered its creator participants with the most effective community, tools, policies & most importantly an easy entry point.

How Roblox manufactures creator cum entrepreneurs

Let me show you a broader perspective on this idea. I had the chance to talk to several Roblox game developers, ranging from as young as 14 to as old as 30, and some have been creating games on Roblox for a whopping 15 years. What’s fascinating is that they started because the concept of “making your own game” sounded incredibly fun to them. None of them had any fancy technical background; they were just kids with a passion for creating games. Roblox gave them the tools, a supportive community, and an easy way to get started. They found it easy to build games using Roblox Studio and the Lua programming language. This experience wasn’t just an introduction to tech; it was also a glimpse into the world of business. Roblox taught them how to communicate, manage teams, create and sell, and, most importantly, turn their passion into a way to make a living.

Did you notice what Roblox did here?

Roblox is not manufacturing games or game developers. Roblox manufactures mini-entrepreneurs. Something that our conventional education has failed to do.

So how exactly does Roblox make development easy, supportive, and incentivized to produce mini entrepreneurs? The answer lies in these four sets of systems:

1. Roblox Studio, a fun engine to make development easy
2. Lua, the heart of Roblox studio
3. Dev forum & Roblox assistant, a community & AI to help creators build
4. Responsible monetization, a balanced way to earn

What makes Roblox Studio great?

Coding is tough. 3D modeling is even more tough. When you mix these two skills to create a video game, it becomes a lot tougher. And starting from scratch? This sounds like a scary dream. That’s why only big companies usually make video games.

But that doesn’t mean it can’t be done. With the right tools, anyone can make their own game, and that’s precisely what Roblox Studio is designed for. The Roblox Studio is a highly beginner-friendly IDE that is like an all-in-one kit for making games. It helps you build, gather assets, and publish your game, a lot like ‘no-code’ or ‘low-code’ for games. The greatness of Roblox Studio lies in its simplicity of use. When you open it up, you’ll find ready-made templates and free 3D assets to kickstart your project. You only need to dive into coding or 3D modeling if you want to get really creative.

Unlike other platforms where you wait days or weeks for approvals, you can modify your Roblox experiences(games) and publish them immediately in multiple languages on all popular platforms — iOS, Android, Mac, PC, and Xbox. Build once and deploy everywhere.

When publishing a game on the App/Play store you need to pay upfront fees to share your game but not on the Roblox store. On Roblox, you pay after you earn. All of these features and many more combined make Roblox Studio so special.

Just as YouTube, Instagram, and Twitter made it easy to create content and Canva made designing a breeze, Grammarly made writing simplified in the same way Roblox Studio is making game development as easy as child’s play.

Lua Programming language

Roblox Studio makes it simple to create popular game types like Obby (Obstacle) or racing. You can build a basic version of these games without needing to write any code because there are ready-made assets you can use.

However, if you want to do something unique, you might have to do some coding. Roblox Studio uses a special version of Lua as a scripting language to control how things work in a game. However, you don’t have to use it if you don’t want to. The good news is that it’s not as hard as it sounds. Most of the tools in Roblox Studio use only a small part of Lua, so even beginners can learn it easily. In fact, all the developers I interviewed agree with the fact that Lua is among the easiest programming languages to learn.

Dev forum & Roblox assistant

No matter how easy a programming language is, when you’re getting your hands dirty with a scripting language you’re likely to encounter errors. Errors are as common in a programmer’s life as typos in a text. To tackle this problem Roblox came up with Dev forum in 2013 and Roblox Assistant in September 2023.

Dev forum

Let’s be really honest. If it wasn’t for Stack overflow all of us programmers would be doomed. Dev forum does the same job for Roblox developers. A community of millions of developers to help you tackle errors in your Lua code.

Roblox Assistant

Since the inception of ChatGPT, programmer’s reliance on Stack overflow has decreased significantly. Why spend hours fixing a code when you can ask an AI to write a bug-free code from scratch? Roblox understood this changing behavior of programmers and built Roblox Assistant. From resolving your programming problems to generating 3D models from scratch, Roblox Assistant gets everything done.

Responsible Monetization

A developer can be super skilled in programming and 3D modeling to build a game, but earning money out of it is a tricky challenge. The usual way Free-to-play game owners make money is by advertising but popup ads and videos jeopardize the whole user experience.

This is where Roblox’s native currency Robux comes into the picture. Roblox allows game owners to sell avatar accessories, assets built by the UGC community. The commission is split in a way that both parties make a good chunk of money, as learned in the economy section. Other than that creators can also charge the user for visiting the experience.

The number of creators on Roblox are growing every day and all these techniques aren’t sufficient to fulfill the needs of the creator community. Roblox resolved this problem in a unique way, Roblox redefined the way advertisements are displayed in games by building Immersive ads. Instead of bombarding users with popups, Immersive ads are a very special way to build a meaningful relationship between the consumer and the advertising brand.

Immersive ads

Immersive ads are like portals inside games that transpose you into a whole new customized experience(game) built by the brands. Users can not only see what the brand’s product is(like in conventional ads) but can also try out the products on their custom avatars, establishing a special relationship between the customer and the product. More than that, the brand experiences are also gamified, which makes the whole process of trying out products fun! Immersive ads help brands redefine their identity from a normal consumer brand to a fun interesting brand that is reaching out to their audience in a gamified way.

Good ads invoke feelings, Immersive ads let you experience those feelings.

There are many other ways in which experience owners can monetize, like Engagement-based payout, Subscriptions, Limited, Paid experience access, etc. The one thing that is common among all of them is that they do not jeopardize the user experiences for the money. Roblox has always embraced responsible ways to incentivize developers while making sure the user experience is smooth.

Roblox does not compete with its creators by building experiences or assets, it empowers them with the right tools, guidance, and community to build and earn, making Roblox’s success a by-product of its creator’s success.

Roblox is built on a set of systems rather than feature by feature. Where every system emphasizes making the creator’s journey easy. Roblox Studio makes development easy, the dev forum & Roblox Assistant make tackling problems easy, and responsible monetization makes incentivization easy.

CONSUMER-CENTRIC — BUILDING THE IDEAL COMMUNITY

One of the big unmet needs we solve is to give kids a place to have imagination, if you play the experiences on our platform, you’re not playing to win. You go into these worlds with people you know and share an experience.” — Craig Donato, Roblox CBO

Creators build for the community of consumers, and then the community decides their fate.

What does the word community mean?

Fitting in somewhere and existing not just as one person, but as a key part of other people’s lives as well.

Roblox has emphasized enabling its creator to build experiences(games) that are community-centric. Where every user is not just playing the game, but is contributing to building a community of similar-minded people. In this process, Roblox has given birth to a new category called ‘human co-experiences’.

Just like creators are empowered with a set of systems in the same way human co-experiences are built on top of these four sets of systems:

1. Consumers — Right People
2. Experience — At the right place
3. Synchronization — At the right time
4. Avatars — Equipped with the right accessories

Consumer (Picking the right people)

To build a perfect community of users a platform has to start with the right people. Roblox started with kids and teenagers and now expanding rapidly to the age group of 17–24.

To understand why kids like Roblox we must first look into what kids seek:

• Freedom and Creativity: Kids love games that offer freedom, creativity, and easy learning.

• Independence: Virtual platforms that give them a sense of independence, that kids envy in real life.

• Endless Exploration: They enjoy games with boundless opportunities for gaming and exploration. There’s always something new for kids to try.

Why Kids Love Roblox Games

1. Endless Variety: Roblox offers millions of games to beat boredom.
2. Avatar Customization: Kids enjoy owning and personalizing their avatars.
3. Exciting Escapes: They like experiencing thrilling adventures and chatting with friends.
4. Playing Together: The excitement of playing with others draws kids in.
5. Player Vs Player Fun: Kids enjoy competitive games in different categories.
6. Obstacle Challenges: Obby games, with their obstacles, are a hit with kids and even adults.
7. Social Connections: Making new friends who share their interests is a big draw.
8. Role-Playing: Kids can become anything they want, bringing their fantasies to life.
9. Empowerment: Roblox gives kids a sense of responsibility and creativity they may not get in real life.
10. Endless Possibilities: There’s something for everyone, and they can switch games for a new experience.

In summary, Roblox games provide kids with the freedom to be themselves and explore a world full of creativity and connections.

This all sounds interesting, but it doesn’t end here. Kids grow old, and so do their interests. What may look appealing to a kid at the age of 12, the same thing would look cringe to that kid at the age of 20. This brings us to Roblox 2.0, The expansion of Roblox experiences for 17+ people.

Roblox’s ability to retain its users as they grow old is just remarkable. Most of the kids on Roblox don’t leave the platform as they grow old. They just shift their attention and usage to different experiences. Roblox understands this very well. That’s why they have throttled on developing 17+ experiences like “Drink on tap!” to cater to the needs of their aging user base. More of this is yet to unfold in the upcoming years.

A platform that grows with its users is one that stays for a long time. Orkut, Friendster, Nokia, and Vine will vouch for this statement.

Experience (Designing the right place)

Once you have the right people, You gotta build the right place for them. But what if you build MILLIONS of right places? Sounds insane? Roblox has pulled it off with its wonderful creator community. But what makes a place ‘Right’? Is it the design, graphics, gameplay, aesthetic, storytelling? The answer is YES, but it’s not only these factors, there’s much more to the story.

Let’s first understand what are Roblox’s experiences(games)

Roblox games are hybrid casual games, which are a mixture of hyper-casual and mid-high-end games that are free to play. Some examples of hybrid casual games are Clash of Clans, Candy Crush, and Clash Royale.

• Hyper casual games → Hyper casual games are a type of mobile game that are characterized by their simplicity, ease of play, wide appeal regardless of age, skill, and short play sessions.

• Mid-high-end games → Consider mobile games like PUBG mobile, Free Fire, and Apex Legend. One’s that are multiplayer, super engaging, and have a high retention rate.

Hyper casual games + Mid high end games = Roblox experiences(games)

What makes Roblox experiences special?

The never-ending, easy-to-play games that give quick dopamine hits. That’s what makes them special. Roblox experiences(games) have constant mini-wins (e.g. Level 1, Level 2, Level 3, etc) whereas, in real life, humans frame goals as one-off big wins (e.g. 6 Pack Abs, $1 million, Graduation, etc). Regular small and easy wins on these gaming platforms hijack the human brain. Every time a person plays the game and wins, he gets a quick dopamine hit (Something that our mind craves), Since the game is never-ending the person keeps on coming back to get that easy dopamine hit and the loop never breaks.

All of this is not just immersion, that’s full-on addiction. It’s an open-world addiction in a mini Metaverse.

Roblox is a fantastic way to spend your time and take a break. Microgames in Roblox can keep you entertained for a short or long time, and they aren’t too big or overwhelming. When you play a game like Call of Duty, it feels like a big task, but when you play a small game like Candy Crush, it’s light and easy. In our fast-paced world, where everyone quickly jumps from one thing to another, these short microgames on Roblox give you a quick dose of enjoyment. It’s like a little burst of happiness. Since there are millions of experiences on Roblox, there’s something for everyone to play.

Also, When people get bored or want to take a break from a stressful day, they often turn to short microgames. In the case of adults, they could also go outside to meet friends, but kids have fewer options, so Roblox is their way to have fun and pass the time.

Another reason why Roblox has so many players is because it fills a gap in the market for kid’s entertainment. Over time, unstructured and free play for children has been decreasing. They now have more homework and structured activities like swimming classes & theater after school, there’s no time left for letting their minds wander in the wild to craft their creativity. Roblox experiences are the only places that fill these gaps, it provides kids with an unstructured world that they can carve according to their wishes.

Synchronization (At the right time)

Once Roblox has brought the right people to the right place. They have to make sure that these people come together at the right time. Consider a scenario where Brookhaven (a Roblox experience) has 10K simultaneous users from different parts of the world. All these users are not present on the same server, they’re grouped into different servers. Synchronization is all about bringing like-minded people to the same server. Once a user is surrounded by the right people, in the right place, at the right time, the experience invokes the true feeling of connectedness, which is very important to form a community.

On the Roblox Tech Talks podcast, Anupam Singh VP of Growth Engineering with David Baszucki, discussed how Roblox brings the right people together.

The growth engineering at Roblox is pretty different from conventional growth engineering being used at YouTube, TikTok, or Instagram. Conventional growth engineering only compromises on recommending the next content(Reel/video) to the user but Roblox goes a step ahead because on their platform it is not only about the content that the user is going to see but it is also about the activity that the user is going to perform inside the experience/content.

This is how Roblox matches the right people together:

1. They group all the users together who visit similar kinds of experiences. (Group people)

2. Then they group all similar experiences that are being used by this group of users. (Group experiences liked by those people)

3. Now here comes the most interesting part. The users are introduced to a situation that encourages them to perform the action that they love to do. And remember most of the users in this experience are the ones who like similar actions that are being performed. When all the similar-minded users see each other performing similar kinds of actions in the same experience, this invokes a sense of connectedness among the users.

Grouping the people who love the same genre and the same actions is the best way to form a community and if all of this is happening in a gamified way then the community would literally rock.

Avatars (Equipped with the right accessories)

Before understanding the importance of avatar’s accessories we must first understand how experiences (games) attach themselves to the identity of the users.

Let’s take the example of Adopt Me (34B visitors) and Brookhaven (37B visitors) and understand how experiences(games) attach themselves to the user’s identity.

Why “Adopt Me” is So Popular

Think about how kids enjoy playing with Barbie dolls — they have dollhouses, clothes, and accessories. “Adopt Me” is like a digital version of that, and it’s for everyone, not just for one group.

Creating something from the beginning makes people feel like they truly own it. Owning a pet on “Adopt Me” gives kids the feeling of true ownership. Something that they don’t get in real life at an early age.

Why do People Adore Brookhaven and Other Role-Playing Games?

We live in a complex world filled with a constant stream of information, leading to excessive thinking and daydreaming. These fantasies seldom come true in real life. Most of us have imagined ourselves as characters like Iron Man or Black Widow from the Marvel movies, but these dreams rarely come true. However, RPG games offer an opportunity for these dreams to become a reality. RPGs empower people to be anything they desire and explore places they always dreamt of.

You see what’s happening here, Once your identity & feelings are attached to a place. You embrace it much more than anything else. In the same way, kids embrace the Roblox experiences(games) with avatar accessories. Like once a kid has thought of himself as Iron Man. The kid wants to embrace that identity completely, he wants to feel like Tony Stark and he would do anything to make this dream come true. Roblox marketplace with its Asset creators empowers these kids with the right accessories so they can mimic the TonyStark/IronMan or any character’s appearance.

Avatar accessories truly bring everyone’s imagination to reality. You can be anything you want, regardless of your age, gender, race, or nationality.

All of this tells us a lot about why the top experiences of Roblox have over billions of visits. Roblox has brought the right people to the right place, at the right time, with the right accessories to build the perfect human co-experiences. This proves Roblox is not just a gaming platform, it is much more and brings us to the realization that it’s not about what Roblox is today, it’s about what Roblox can become in the upcoming years.

ROBLOX — A PLATFORM BEYOND SOCIAL GAMING

Roblox is moving beyond its identity of being a gaming platform for kids. The platform has seen its users grow over the past 17 years. Its romantic dreams might be how it keeps them loyal, just like LEGO reimagining sets for adults.

Roblox is re-imagining how it attracts the audience in three specific ways:

• 17+ Experiences
• Education initiatives
• Harboring a safe environment

17+ Experiences (A hangout place for adults)

On May 17, 2023, David Baszucki (Roblox, CEO), unveiled the plans for Roblox’s vision for all ages. He talked about Roblox’s expansion into the 17+ category and since then, there’s been a significant increase in the number of experiences(games) specifically meant for adults.

Popular 17+ experience

Introducing 17+ experiences on Roblox may sound like something new, but Roblox has been planning this up for a very long time. Ever since Covid, Roblox has organized many concerts by musicians, wherein artists like Bebe Rexha, Lil Nas X, and British YouTuber KSI came to promote their albums, and surprisingly all of this wasn’t just because of the Covid-boom.

These artists came to Roblox because their ideal audience is present there. In the RDC(Roblox developer conference) 2023, David Baszucki spoke about portraying Roblox as a platform for dating. “Thousands of adults will meet for the first time in Roblox dating experiences and subsequently form real-life relationships,” Baszucki declared at RDC23.

There’s a huge potential for experiences specifically meant for adults because because17–24 is the fastest-growing userbase group on Roblox, accounting for 38% daily DAUs(66M).

To serve the needs of its aging user base, Roblox came up with 17+ experiences.

Education

During the covid-boom period, Roblox was at the tipping edge of becoming something more than a gaming platform. During that time, kids between the age of 9–15 were the biggest userbase of Roblox. So, the company came up with a plan to diversify its platform by prioritizing this age group.

Roblox acquired Imbellus, a company that creates simulation-based assessments on December 2, 2020, for an undisclosed amount. ****Imbellus created the McKinsey Digital Assessment, which is an interactive gamified assessment that helps companies understand how to develop and retain top talent.

The education and verticalization division is now led by Rebecca Kantar (Founder of Imbellus). Rebecca recently came on the Tech Talks podcast of Roblox and spoke about how Roblox plans on revolutionizing the education system.

What makes immersive education special?

According to Rebecca, simulations add an enjoyable fun element to assessments. Unlike many other online courses and tests that usually cover a broad range of subject knowledge, immersive education assessments delve deep. They assess the candidate’s capability of first principles thinking, and how much time they invest in detailed analysis of a subject or problem at its fundamental level.

RCF (Roblox community fund)

Roblox plans to support 100 million students to learn on the platform by 2030. To do so, Roblox has started the $25 million community fund. The RCF will award grants to educational organizations creating engaging curricula and learning experiences that harness their platform’s immersive potential.

Experiences built by RCF Initiatives:

• Mission: Mars from the Museum of Science and Filament Games challenges students to create a rover for a Mars mission using actual NASA data. This makes learning science and engineering fun. (After personally trying the experience, I can say Mission Mars even captures the adventurous spirit of the movie “The Martian.”)

• Lua Learning by Boatbomber lets students access curated community tutorials, learn to code interactively and finish classroom assignments using Lua.

Initiatives like Mission Mars, Roboco Sports League, CodeCombat Worlds, and Lua Learning are among the initial educational experiences on Roblox. The community fund is empowering educators with the world’s most immersive platform and a good chunk of cash to build the world’s first Edtech experiences in the first true Metaverse.

Keeping it safe

Once you’ve built a platform that hosts 66M DAUs, it becomes very important to keep it safe from any kind of threats. Roblox prioritizes keeping the safety and civility of its users. (Something that is often neglected by tech companies these days).

When you have millions of kids onboard in an open virtual space where anybody can participate, it becomes easy for predators to target innocent children. Keeping the users safe has been one of the biggest challenges for Roblox ever since the beginning. Moderation and user safety & civility are the top priorities of Roblox, they have the most number of people working in that division.

Parental control on Roblox:

Roblox also offers various ways to monitor account activity, such as:

• Reviewing individual chat histories in direct and small group chats, limited to Friends and Friends of Friends.
• Accessing private message history.
• Checking Friends and Followers.
• Tracking virtual item purchases and trades (browser only).
• Viewing creations like games, items, sounds, and ads (browser only).
• Monitoring recently played games from the Home, Keep Playing, or My Recent sections.

Also in 2022, Roblox committed to no targeted experience-based ads for kids below the age of 13. The platform is dedicated to preventing kids under 13 from encountering new ad campaigns, sponsored content, items, or user ads.

Age appropriate moderation

Sometimes what may be right for a 23-year-old to say, the same thing would be completely inappropriate for a 13-year-old to say. This is one of the most important moderation problems that Roblox had to overcome. To do so, Roblox came up with different levels of verification for different types of experiences.

Like Roblox has established new rules to access 17+ experiences, Users need to send a live selfie and get themselves verified through a government ID. This strict step is to make sure age rules are followed. In this category, there are experiences with mature themes like violence, humor, romance, and alcohol. But Roblox’s community rules stand firm against sexually explicit content and illegal substances.

Moderation beyond text

In September 2023, Roblox acquired Speechly, a voice tech startup that provides voice chat moderation, real-time transcription, and a Voice API. This addition allows Roblox to incorporate AI voice technology and voice interfaces into their experiences. This strategic acquisition was specifically done to moderate 17+ experiences.

Roblox as a family bonding method

Some parents play multiplayer Roblox experiences(games) just to bond with their kids. It becomes a good way for parents to connect with their children on a friendly level and understand what’s going on in their lives. The parents may not fully understand the kid’s passion for Roblox, but they can still support them and celebrate their wins and achievements like a friend.

No platform is perfect but Roblox has made sure that it provides the most civil & healthy platform for its users to play, hang out & learn. 17+ experience, Education initiatives, and keeping safe environments, all these factors indicate that Roblox is moving beyond social gaming. They are on the path to building something that’s only been mentioned in Sci-Fi movies & books? Yes! Roblox has been on its path to building the world’s first Metaverse since 2004.’

ROBLOX 2.0 (A METAVERSE BEFORE IT WAS COOL)

“We’ve had this vision of the metaverse way back in the 2000s, when we made our first business plan. This new category had elements of social and 3D immersion from gaming and media, and we more and more are thinking of these tenets of a metaverse — persistence, identity, avatar, the shared cloud fabric, universal accessibility, fast jumping from place to place, and an amazing variety of experiences.” — David Baszucki (In a podcast with Venture beats)

On October 28, 2021, Mark Zuckerberg rebranded Facebook to Meta, in his pursuit to build the world’s first Metaverse. Now after two years, Meta has made significant achievements in terms of making affordable VR/MR headsets but in terms of virtual worlds, they are not there yet. Many other tech giants entered the Metaverse race. Microsoft came and left and now, Apple is launching the Vision Pro to compete with Meta.

But on the sidelines, Roblox which was considered as a gaming company up till 2020, has been building the true Metaverse, ever since 2004.

What is the true Metaverse?

Most companies and people think of Metaverse as a place where you could go (Like going on the Facebook website), but in reality, Metaverse is a moment in time. Yes, you heard it right, Metaverse is a moment in time.

Let’s understand this better with an example.

Imagine the Metaverse is like your birthday party.

Some people think the Metaverse is a special place where the party happens, like a fun park. But actually, it’s more like the exciting moment when you blow out the candles on your cake and make a wish. That moment is the Metaverse — the fun and exciting time.

So, the Metaverse is like the fun part of the birthday party, not the place where the party happens. It’s like the special moment when you feel super happy!

Why did conventional Metaverse projects fail?

Metaverse is not about where you go, it’s about having a really good time. Most companies and startups confuse the meaning of Metaverse with virtual worlds. Some were building super realistic virtual worlds where you could shop, attend meetings, or watch a movie. Eventually, all of these projects failed. I don’t see any such project in a good position in 2023. Literally, nobody is using/going on these virtual spaces.

Roblox understood the true meaning of the Metaverse since the beginning, that’s why they always emphasized making the experience fun. Roblox has mastered the ability to create such fun moments in time called the Metaverse. They don’t use super-realistic graphics, their platform literally stands on quirky and unique blocky graphics. It’s not about the quality of graphics. It’s about the quality of interaction (human experience). Try playing Squid games on Roblox and you’ll know what I mean. Even with these weird aesthetics, they have 66 million people use the platform every day, and over 200 million use it monthly. This is because Roblox focuses on making the experience fun for its users. How does Roblox make the moments fun? It is something that we learned in the Consumer section.

If you’re a beginner to Metaverse, Read my Metaverse 101 to get an introduction to everything you need to know about the Metaverse.

Let’s dig deeper into the Metaverse dream

Most SciFi movies & books have portrayed Metaverse as some dystopian future. Even the book “SnowCrash” from where the term Metaverse originated, portrays Metaverse as some dystopian virtual world, where an evil corporation handles it, or a rouge AI takes over the world and captures everyone inside the Metaverse like in the Matrix movie.

The problem here is that all the events & scenarios in such movies & books were exaggerated to the extent that they should hook the user’s attention, and people in the entertainment business need the public’s attention to make money, be it in a negative or a positive way. That’s what these movies & books did, they captured attention and fed people with the exaggerated dystopian version of the Metaverse. It was all fictional not real.

Metaverse does raise a lot of questions about the future of our social lives but the solution to this problem is not to stop the progress of the field, but to build a better responsible Metaverse. Cars made bullock carts obsolete but made traveling easy. Mobile phones made letters obsolete but made communication instantaneous, Internet made barriers to information obsolete. In the same sense, Metaverse will make barriers to immersive human connections obsolete and bring us closer in a way we never imagined. Big things take time. No technology should be feared; it must be molded in a way that it becomes beneficial for humans.

Why Roblox users are Metaverse natives

Generation Alpha, the kids born after 2012, are one of the biggest consumers of Roblox and are also the first Metaverse Natives for three major reasons:

• Lots of people will use XR headsets by the time they turn teenagers(2025).

• Digital identity becomes more important than real-life identity.

• Generation Alpha will adapt to 3D naturally.

Wide-scale XR adoption → By the time the first Gen-Alpha kids reach teenage by 2025, XR headsets would’ve become cheaper, resulting in an easy entry point to experience 3D. Recently Meta dropped the price of Quest 2 to $299. More similar initiatives by tech companies will drive XR headset sales in upcoming years. Just like how a few years after the introduction of the iPhone, smartphones started to become cheap. XR headsets are on the same path.

Digital identity > IRL identity → Gen Alpha is born and brought up in an era where the digital identity of a person is more valuable than real-life identity. For adults how their profile looks on LinkedIn matters more than how they look in IRL. In the same sense for kids, how their avatars look on Roblox & Fortnite matters to them.

Naturally immune to 3D → Some people feel nausea after using VR headsets because they were brought up in the era of 2D screens. Immersive 3D is something very new for their brain to process. But Gen Alpha kids are born in the era of 3D, from Instagram filters to Roblox games, everything is in 3D. Their developing brains adapt easily to 3D visuals. Unlike adults, kids naturally handle VR without much effort.

In short, the kids on Roblox, are growing at the intersection of key metaversal ingredients. It’s easy for millennials & boomers to be skeptical about the Metaverse because maybe it isn’t meant for them.

ROBLOX OF THE EAST

Roblox isn’t the only company that is building the Metaverse around gamified social experiences. Just as Roblox is a hit with Western children, Zepeto is the go-to for those in the East.

Zepeto is a Subsidiary of Korean tech company, Naver. Starting in 2018, Zepeto was Naver’s attempt to build Roblox of East Asia. Zepeto hosts many similar core features of Roblox, including gamified social experiences, UGC avatar accessories, and a native currency for the virtual economy. These all features have amassed Zepeto a user base of 300M with 2.3M UGC creators.

There are many features that separate Roblox from Zepeto but there are three key reasons that make Roblox a global dominance and limit Zepeto to East Asia.

Here are the home pages of both applications. Look at them carefully.

1. Zepeto’s preferences for monetization

The homepage of both applications informs about the motto of the company:

In the West, Roblox is a social experience first and a marketplace later.

In the East, Zepeto is a marketplace first and a social experience later.

Roblox prioritizes fun, while Zepeto leans toward commercialization.

Every feature of Zepeto is screaming to grab your attention. There are too many options, major leading to monetization. The homepage looks very cluttered and feels like multiple things stuffed in one place. There’s no clear CTA (call to action), while on Roblox it is very clear that they want you to play a game.

2. Algorithm-driven Zepeto

While Zepeto has introduced a particular tab for Tiktok-style 3D content. Leading users to the vicious loop of zombie-like scrolling habits and also hurting the attention span of the users.

Roblox has no algorithm-driven element that decides your next move. A problem with conventional social media platforms has been overcome by Roblox as we learned in the social communication section. Again here, Zepeto has prioritized monetization over user experience.

3. East-centric elements of Zepeto

Even though Zepeto plans to expand all over the world but their experiences(games) and avatar accessories do not convey the same story. Almost all of the avatar’s accessories are centered around Eastern cultural themes. Users associate their identity with their avatars, so if they can’t relate to it, they will never accept it. For Zepeto to move beyond the Eastern market they have to introduce experiences and accessories that are relatable to the global audience.

Except for all these cons, Zepeto possesses one clear exceptional feature that is missing in Roblox. Catching up with the trend, since the UGC element of Zepeto is in the early stage of development, Most of their avatar’s accessories & emotes are built by the in-house developer team, which gives Zepeto an edge to build and deploy faster.

In the global arena, Zepeto isn’t the only one challenging Roblox. Fortnite has also emerged as a strong contender for creating gamified user-generated content (UGC) experiences but its identity among the eyes of the common public is associated with a battle royale game and not a UGC game. Additionally, several small startups have shown promise in competing with Roblox, including HighRise, which stands out by focusing entirely on socializing rather than games. This unique approach has proven successful for them. While many other companies are also working on social experiences, none have managed to build a thriving ecosystem like Roblox because they have always prioritized user experience over monetization.

CAN ROBLOX ANSWER THIS?

There are many things that remain unanswered about Roblox. Some of the most important ones are:

• When will Roblox become profitable?
• Is moderation a boon or bane?
• What’s special for business?
• Where’s play-to-earn?
• Ever heard of music?
• Where form here?

Profitability

In the current market, Profitability is the most important question asked by investors. Something that Roblox hasn’t been able to answer in the past 17 years of its existence. Roblox posted revenue of $2.2 billion, up 16% YOY, and $2.9 billion in bookings, up 5% YOY in 2022. The numbers are great, but so is the net loss, which accounted for $934 million in 2022, which was almost double its 2021 loss of $504 million. It’s a long road ahead for Roblox, it would be interesting to see what new responsible monetization tactics they come up with to become profitable.

Moderation

Moderation has been a boon and bane both for the platform. On the one hand, moderation has kept Roblox’s users safe from any harm, on the other hand, moderation has caused tons of problems for regular users. It has happened many times, that users got warnings or even got their accounts blocked for very silly and sometimes for no reason at all. The reason behind this problem is that moderation at Roblox is outsourced to third-party moderators who are not completely unaware of Roblox’s TOS(terms of service). Even though Roblox has most people working in the safety & civility division the moderation issues have remained one step ahead solution implemented by them.

What’s special for businesses

Roblox has built a great platform for businesses to attract new users with Immersive ads and native experiences. But is that it? The hints of such methods of attracting an audience in 3D spaces have long been mentioned in Sci-Fi books and movies. Considering the current meaningful impact of 3D on people, these forms of user onboarding techniques for businesses do not feel enough. There’s more to it like Google & Facebook came up with user behavior-based targeted ads on the 2D internet to connect businesses with their ideal audience. Roblox has to do something the same, Instead of simply implementing the targeted ad technique of the 2D internet in the 3D world, they need to come up with something new. Roblox needs to redefine the way a business can attract an audience in the 3D world. Probably like the iPhone moment for the advertising industry in the 3D space.

Play-to-earn

Which category of users are the biggest participants in the Roblox ecosystem? The creators? No. It’s the consumers. How does Roblox incentivize them for the amount of time spent on the platform? At this point, Roblox doesn’t. Discovering ways to incentivize consumers on Roblox, perhaps through engaging, sustainable branded rewards, has the potential to boost player’s session durations and overall retention rates. Play-to-earn is the future of gaming and Roblox needs to figure out a way that everyone from the consumer-to-creator and Roblox itself benefit from the participation.

Music

Roblox is all about giving users the ability to immerse themselves in 3D virtual spaces. But, is that immersion in its fullest form? No. Long before 3D or even 2D, music was the people’s way of immersion. When you hear your favorite song, it hits you with a wave of nostalgia and brings back all the memories from the day when you heard that song for the first time. Music is not deeply synced with Roblox experiences(games), they’ve provided a great way for creators to build 3D spaces with Roblox studio but the integration of the right music isn’t there yet.

Roblox experiences have audio not music, and the soulful factor that separates audio from music is that, audio is all about hearing, and music is all about feeling. Remember playing Super Mario? Where every stage category had a different music theme in the background to completely immerse you in the experience, Roblox needs something similar. True immersion is only possible when the user can feel both the visual & audio parts together.

Where from here?

We have talked about Roblox as a social media, game dev studio, economy, consumer-centric, Metaverse, and much more. But the real question lies in how Roblox views itself as a platform in the next 10 years. How do they plan on making sure that Roblox does not convert into a dystopian evil company as mentioned in the SciFi books?

Conclusion

Technology is useless until we put it in the hands of the masses and empower them to use it as a force for creation and wealth generation. Roblox empowers a world where people can earn from their creativity, a world where social communication is not a mockery but about connecting people. As mentioned earlier, at this point, it’s less about what Roblox is today. It’s all about what Roblox can be in the upcoming years. The closest thing to a responsible Metaverse.

ABOUT THE COMPANY

Roblox was initially started in 2004 by David Baszucki and Erik Cassel but the roots of this idea to build a gamified social experience where anybody can participate & build was implanted back in 1989. During those days David started an ed-tech company called Knowledge Revolution, which had a simulator called “Interactive Physics”, designed as an educational supplement that would allow the creation of 3D physics experiments. People who used the software could simply drag parts, hinges, ropes, and springs to design and conduct physics experiments. When David saw that users were more having fun interacting with 3D elements and building stuff, rather than the physics part. It gave the indication to David that people like to interact with 3D stuff but they aren’t empowered enough to build it. Thus, the idea of Roblox was born.

Knowledge Revolution was later sold to MSC Software in December 1998 for $20 million. David joined the MSC software as the VP and continued till 2002, later he left to build his own angel investment fund. In November 2003, David convinced Erik Cassel (Former MSC college) to join him and work on the early version of Roblox. During that time Roblox was known by the name, ‘GoBlocks’ and later on, ‘DynaBlocks’. Since the name ‘DynaBlocks’ was hard to remember, the name was again changed to Roblox because of the aesthetic value delivered by the word “Robots” and “Blocks”.

From the very beginning it was having kids develop games for other kids

— Tami Bhaumik, VP Civility & Partnership

Ever since the public release of Roblox in 2006, the goal has been clear: “Make 3D development easy”. Roblox has come a long way in achieving this goal, and they have done an excellent job in staying true to it.

In the early days, Roblox attracted users via online advertising on gaming sites like AddictiveGames.com and TV ads. In those ads, Roblox portrayed itself as a platform where you can “Build anything and Be anything”. Something that they’ve done very well.

Ever since the 2010s, Roblox’s growth has been all-natural, coming primarily from two sources: word of mouth and YouTube users tuning in to watch various Roblox streamers. While other companies attempted similar strategies, Roblox’s success stems, from its dedication to creating a unique product that took over many years of hard work. The key to this success was the commitment to a long-term vision: Empowering Creativity and Connection.