Roblox is getting kids’ attention. Next stop, investors

If you don’t live with teens and tweens, you may never have heard of Roblox. If you do live with them, you may hear about nothing else. More than 31 million daily users engage with the free platform’s 12 million games (or “experiences,” in Roblox-ese), and in a regulatory filing ahead of its planned initial public offering, Roblox said users spent 22.2 billion hours on its site during the first nine months of 2020—an average of 2.6 hours a day. If you’re a parent, that’s worrying. If you’re a potential investor, it’s exciting.

Here’s how it works: Players like my 10-year-old daughter create avatars, which they use to visit different games. Avatars are personalized, with virtually unlimited options for customizing their appearance (my daughter prefers hers to be eating a popsicle while hefting a sniper rifle). The basic structure of the games is the same: Players manipulate their avatars through virtual worlds to solve mysteries, build hotels, or slay aliens. Accomplishments are awarded with badges, and a homepage keeps track of your games, which can tally in the hundreds.

The engine that truly makes Roblox go is the army of developers who make its games. While developers share in the revenue Roblox makes from its premium audience—subscribers shell out up to $20 a month for various perks—most can only monetize their work by charging for in-game upgrades paid for with in-game currency called “robux.” Of the nearly 7 million developers building games on the site, less than a million made any money at all in the 12 month ending Sept. 30. (Three made more than $10 million.)

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