Roblox: Hugely Popular, Yet Unprofitable

Matthew Ball has written an excellent deep-dive into Roblox:

Compared to its most similar competitors — the social virtual world platforms, Minecraft and Fortnite — Roblox has about 5× and 2.25× as many monthly players. For non-gamers, Roblox has about two thirds as many monthly users as Spotify and half as many as Snap (though it probably has a lower share of daily-to-monthly active users) and is roughly as popular as Instagram circa Q4 2015, and Facebook in Q3 2009.

Each month, players spend close to six billion hours using Roblox. This time excludes the viewing of Roblox content on Twitch or YouTube, the largest video platform on earth and which counts non-live gaming content as its second most popular genre, with Roblox one of its five most watched games. Most estimates suggest the average Disney+ account watches no more than 20 hours per month, which would mean about 3.1 billion hours in total monthly watch time — barely half of Roblox’s total.

But:

So yes, Roblox is unquestionably “working.” Yet Roblox is also unprofitable. Very unprofitable. What’s more, Roblox’s losses continue to swell because its impressive rate of revenue growth has been outpaced by that of its costs. [...] Over the last twelve months it has averaged $138 in costs for every $100 in revenue.

★ Tuesday, 27 August 2024