Good morning,
Today we have a very interesting interview about the future, but first a note about the recent past.
On to the update:
Roblox Earnings
From Bloomberg:
Roblox Corp. shares tumbled the most ever on Wednesday after the video game platform reported bookings that missed analysts’ estimates in the fourth quarter, reflecting a retreat from the pandemic-inspired boost over the last two years. “As parts of the world began to return to a more normal way of life, our absolute numbers have continued to grow,” Chief Executive Officer David Baszucki said, but “growth rates have declined as we are comparing, in some cases, to quarters last year in which certain key metrics doubled or even nearly tripled.” The stock plunged 27% to $53.87 in New York.
Roblox is yet another pandemic stock, like Peloton or even Netflix: it turned out that a product that appeals to kids in particular, which lets them socialize with their friends, and which parents generally feel good about, gets a ton of usage when kids are not attending school; something I found interesting on the company’s earnings call was the discussion about seasonality. Here is CFO Mike Guthrie:
DAU in the fourth quarter, it’s not unusual to have a decline. Just think a little bit that Q3 is July, August, and September. July and August are just peak for us. Like this is absolutely high-level time of activity. September back-to-school and things slow down, it’s a shorter month. And then October and November are actually pretty quiet for us until late, and things pick up a little bit of a bump on Halloween, and it really picks up around December, obviously, for the holiday. So Q3 has been bigger than Q4 in many years. It’s not really unusual.
What is notable is that while Roblox’s stock price certainly took a tumble, none of the rest of the business is really affected in any meaningful way. Netflix still has to buy a lot of content, and Peloton has to buy a lot of hardware; hardware in particular is so difficult because of all of the additional costs associated with it — there missed growth numbers can sink not only the stock but also the company. Roblox, on the other hand, is software; even better it is software populated with user-generated content.
That noted, it is striking that Roblox didn’t really give any sort of warning about slowing growth last quarter, even though it tried to spin this quarter’s results as perfectly natural and what you would expect given the ongoing emergence from COVID; it’s a reminder that assuming the good times will continue is one of the easiest mistakes to make, particularly when those good times happen to be perfectly aligned with the metric that investors care about (in this case, user growth).
An Interview with Roblox CEO David Baszucki
I was able to sit down with Roblox CEO David Baszucki earlier this week to have a wide-ranging conversation about his career, Roblox’s history, and the Metaverse and Roblox’s place therein. This interview happened before these earnings were released (and during Roblox’s quiet period), so there isn’t any discussion about these results or related metrics like user growth, etc.
As a reminder, the Daily Update Podcast is particularly useful for interviews, even if you are generally a reader; today’s podcast will be published shortly after this post is sent out.
On to the interview:
So David, first off it’s nice to meet you. I was actually reflecting the other day that I’ve been writing Stratechery for nine years and it felt like this incredible amount of time, and then I look up and I think Roblox came out in 2006, so I believe you started in 2005, that’s sixteen, seventeen years. I’m curious, when you got started back then, did you think you would be sitting here today as the CEO of a public company worth billions of dollars? What has that journey been like?
David Baszucki: It’s been quite a journey. When we got started we had this vision of a new category of communication and storytelling, which today is either called human co-experience, sometimes called the Metaverse, and this category we’ve been aware of back from sci-fi, back from people writing about it. So that part has been a constant, and we had an original business plan that was actually talking about this category sitting side by side with games and social networking and media, and all of those.
But at the same time, even though our vision of this category was really large, our aspirations were quite humble. It was me and a partner just really wanted to build a small company, write some really great code. We were really fascinated by immersive 3D technology, physics simulation, what this all could hold, and over the course of the last sixteen years it’s almost as if every three or four years we’ve reset our vision of what the company could be, come up with three or four or five more big, hard things to build, and almost start it fresh again. So it’s been a wonderful mix of both of those.
Well, it’s interesting to hear you put it that way. I went back looking for David Baszucki profiles, and there was not really any of them. I think the first piece that I really found was this interview you did with Wired, I think it was 2013. And what was really interesting about that, it was a good interview, but you said jokingly in the interview that your plan is to take over the world. And it’s interesting, when you actually view some of the discussion around Roblox, and some of the visions that you’ve been painting, particularly recently, maybe that wasn’t so much of a joke, it feels like it might have been a bit of a plan of action, however humble the beginnings might have been.
DB: Yeah, it was probably a little bit of a joke in that at that time in 2013-
But all jokes have a kernel of truth, right?
DB: That’s true! I think here’s where the kernel of truth came from. We have seen an evolution in both communication and storytelling, as supported by technology, that both have been inexorable. And on the storytelling side, whether it started 100,000 years ago sitting around the campfire, and migrated to cave art and oil painting and photography, and then the movies, and what we call 3D movies today, we’re always wanting richer ways of telling stories.
On the communications side, same thing, whether that migrated to the telegraph, telephone, this video call we’re having today, that’s been migrating forward. This category is very interesting because it’s people doing things together at a distance, and it’s not just communicating. We can be in a classroom together, we can be working together, we can be playing hide-and-go-seek, so we’re seeing an inexorable direction of technology. So I think that maybe offhand, funny joke I made could have been the feeling that this is a technology wave, and this is going to happen, and it is arguably going to be really big and interesting.
Well let’s just back up a little bit, because I do want to get into the implications of that and how Roblox fits. And this is maybe a bit of an unfair question, since you’ve been living this for sixteen, seventeen years, but how do you describe Roblox to someone who might be unfamiliar? I guess you just did the road show for the IPO not too long ago, so maybe you’ve had a lot of practice with this, but what’s the big level pitch for someone whose kid is not immersed in it?
DB: Yeah, you and I both go to Roblox, it could be on a phone, a tablet, a computer, a console, we sign up, we create our own avatar, our digital proximity of who we are, we find some of our friends and together we do all kinds of amazing things. We work together in a store, we go hunting and exploring for treasure, we maybe dissect a frog together, we possibly go to ancient Rome and see what it’s like. And rather than just watching it, we communicate together, control our avatars, and build the feeling that we’re doing this together. So that’s maybe the user perspective, the technical perspective is this is immersive 3D cloud-based physically simulated multiplayer avatar stuff where we can imagine just about a wide range of uses, from playing and learning all the way to going to concerts together, and maybe even someday working together
What’s the typical user path for getting started with Roblox? You mentioned you get together with friends, and is this something where that social aspect is really critical to the experience, so you want to get through that or what’s that path like?
DB: We have seen historically that we’re working at a very fundamental level of social virality, and that is friends saying, “Hey, you got to get a Roblox account so we can get together and do some stuff.” So it is groups of three, where the larger the group of friends the more sticky the experience is, telling their fourth friend, “You need a Roblox account.” It’s sharing those Roblox accounts, it’s having three people playing together in the fourth finding them and joining them, and it’s all happening on this very rich, broad array of user generated 3D content. All of the experiences on Roblox are made by the community, they range from things that seem like traditional games to social hangouts to educational experiences, and so it’s this fun combination of social being scaffolded by these immersive 3D experiences that content creators make. So the virality is really word of mouth.
I’m quite interested in this, because I feel like there is a connection between the expansiveness of your vision, where this isn’t just a game, but it really is a place that you go to hang out, and the fact you’ve been working on this since 2006. And there’s a bit where if you are having to buy customers, or acquire customers, I don’t know if we’ve really, truly solved how to acquire customers in cohorts, because if you’re buying someone for a mobile game, you just get someone, they play that game, and you see how much they buy, then you build a profile, they buy other stuff. In this case if the experience is so critical to be with friends, it almost feels like there could have been no other way for Roblox to have this vision if it hadn’t had so long to have such a long runway to grow up.
DB: This is an interesting parallel because behind the scenes we’re a very long view, deeply technology systems platform type company. When we got started, couple things, ads didn’t pay too much — which was actually really good — this is a group that we wanted to monetize very gently, and where even today a very small percentage of people use Robux or virtual currency. So we’re starting with something very, very difficult, and we were not buying traffic. So a lot of work was done to create that, as you’re referencing, natural virality, not supported by paid acquisition, and it’s deeply supported by people with friends in real time doing things together.
Is this a situation where because you did Knowledge Revolution before, you sold it for, I believe, $20 million, that you had this built-in runway to help develop it? How critical was that at the beginning where you didn’t have to go get a bunch of VC upfront, and then feel the pressure to get it done. You didn’t raise, I don’t think, any money until well into Roblox’s history.
DB: Yeah. A fun fact, we raised a little money along the way, but after about $10 million we were self-supporting and funding all of our growth internally. We did raise additional money mostly for some liquidity and some buffer, but we got to where we are essentially on $10 million. Knowledge Revolution, we always had an inkling, even at Knowledge Revolution when we were building a very simple 2D physics simulator, people wanted to jump into their creation, they wanted to be with their creation and with their friends, they wanted these 2D creations to be 3D, and they wanted them all to be in the cloud. We could see these pieces, even when kids were using this for educational purposes, that what they were seeking somewhat aligned with what the futurists and sci-fi writers were writing about and talking about, this ultimate, what they were calling Metaverse-type arena.
Well, you brought the word up, so I think that that probably is a bit of the main event. Over the last year, obviously Metaverse is going to be a huge thing, whenever Facebook talks about something it makes massive news, for sure. From your perspective, is there a little grumbling, like “Hey, we’ve been here thinking about this for a while”? Is it gratifying that “Now everyone is seeing the things that we’re talking about”? How do you define the Metaverse? Is this a definition you had in mind and Roblox has grown into it, has Roblox shaped the way you think about that? What’s your high level approach to that?
DB: I do think right now everyone has a little bit of a different view of what this category ultimately will be, and part of that is it’s so early in the evolution of the category. We think it’s mature and we’re well far along, [but actually] there’s twenty or thirty years ahead of us. I also think along the way there have been bursts of people trying to define this category. We could roll the clock back to there.com and secondlife.com, which were immersive 3D environments with audio a long time ago, and arguably some of the directions they did didn’t lead them to being in a certain perspective right now.
I think aspects of what this category is, whether it’s called human co-experience, or immersive 3D communication, or the Metaverse, involve personal self-identity avatar, connection with friends and associates, a feeling of 3D immersion, the technology to support that immersion around the world with perceived low latency, an ability to browse very quickly a wide range of immersive type content where we can go together, a foundation of safety and civility that has to form the foundation of any society, and an active economy. Our view is those aspects, I think they overlap a lot with some of the early futurists, and I still think it’s really early, actually.
The futurist take on the Metaverse is kind of interesting. If you contrast say a Snow Crash take versus a Ready Player One, the Snow Crash is almost like there’s this universal Metaverse, whereas I almost feel the one thing that Ready Player One got correct is that that was owned by a private company and it was contained to them, and it became universal in that regard. But that has always struck me as being more plausible, in part because all these different pieces that need to happen for there to be this immersive, persistent, low-latency functioning economy and world, you need a benevolent dictator, in a way. And that, I think, is something that is compelling from my perspective about your vision is Roblox is seeking to do it all. Does that rhyme with the way you’re thinking about this? Or do you think there is a broad interconnected thing going on?
DB: I think what we’re seeing is the technology is so complex, it’s so early, and what ultimately we would want to support, the 50,000 person photorealistic high quality audio simulation real time with friends at an awesome rock concert, are still a ways away, that the metaphor might be we’re in the dial-up bulletin board phase of multiplayer stuff. And after the dial-up bulletin and board phase we’re going to have the CompuServe-AOL phase, which is proprietary stuff, just trying to get this working and over time the LAMP stack is going to evolve and we’re going to have whatever Apache and HTTP and all of that. So I do think super long term this is going to be open, and all of that, it’s just what’s the fastest way to work through all these technical issues, as you mentioned, to put it all together? We’re trying to solve all these technical issues, and for now the fastest way may be just great engineering teams and great product leadership.
That’s certainly my view of the world too. I was curious last year, you’ve been making more and more acquisitions, I thought one that was particularly interesting to me was your purchase of Guilded, which is a Discord competitor, and I thought this was really interesting, because it seemed to signal this goal of keeping people within the Roblox universe, even when they’re not playing, whether they’re just chatting or communicating, or perhaps doing other games, as opposed to leveraging the same social networking tools as anyone else. It seemed to be an affirmation of this point of view that to the extent Roblox succeeds, it’s because people live in a Roblox world, as opposed to an interconnected one. Is that reading too much into it, or does that broadly fit with the way you’re thinking about this?
DB: I think just as there’s emerging 3D digital social stuff, and that involves identity groups being together, I think long term whatever the spec is for the emerging 2D social community platform, and that could include Slack, Discord, Teams, Guilded, and others, I think that’s an emerging thing as well. There is interesting ways that these products can talk together, there’s interesting ways that identity can move and share between them, and so one of the things we’re interested with Guilded is if can we use it as a platform for experimenting, for looking at ways of integration, and those ways of integration will be open, rather than tightly coupled, so it’s a way for us to learn about that.
Speaking of the interconnectedness and connection to the outside world, it’s interesting because on one hand, strategically speaking, I’ve seen this Roblox strategy being all-encompassing as one that makes a lot of sense to me, it makes sense with technology, I mentioned the Guilded acquisition. You did mention at the Roblox Developer Conference that the idea of building an analogy between limiteds in Roblox on one hand, and you didn’t say the word NFT, but you definitely seemed to be suggesting that, is that an angle where there is a lot of interest and you see some connection there? Or is that just a bit of speculative, “Hey, this could be something we might do?”
DB: I think this is super interesting. We are on a path, and we’ve committed to our developer community, that we want anything that we would ever do as a platform to ultimately go to our community. That includes the creation of all asset types, bodies, clothing, whatever, all of these wonderful things, and also the control of free items, rare items, limited items, whatever type of items, so we will move that to our community.
What becomes interesting then is the use case where, for example, there’s an immersive 3D place on Roblox where we could go to build interesting clothing, and Elton John shows up in that interesting place and Elton John builds ten cool pieces of interesting clothing, and Elton John’s got a validated account, you can see the blue star, and all of a sudden Elton John wants to sell those 10 items for charity and for a lot of money. You can imagine Elton wanting to take them off Roblox to say, “This is an NFT wrapped, one of the ten that I’ve made, you can count how many that I’ve made”, sell them for charity. People go off and hold them for ten years and then come back and revalidate them against Roblox.
It is an interesting configuration, [and while] we’re first moving towards just this whole UGC (User-Generated Content) thing, we do think that scenario, also the scenario of people participating with the individual groups and teams that are building stuff on Roblox, are all interesting crypto use cases. We haven’t announced any of them, but these would be some of the things we would discuss with people.
What’s very interesting is you use a lot of rhetoric talking about how you want the real world to be fully reflected in the Roblox world. You always talk about dropping a mug, it should sound the same and have the same dynamics when you drop it. What strikes me about the example you just gave is one of the issues, and I wrote about this I think the first time I wrote about NFTs, is one of the NFTs that I was the most interested in was actually the NBA Top Shot thing, in part because it had a root in this “real world.” The NBA owns a copyright, you can actually trace it back and it’s actually legitimate. Meanwhile you have these rootless NFTs, and some of them, like Bored Ape, can build sufficient social capital that they have a root there, but a lot of other ones you have no idea what they’re rooted in. This almost feels like going in the opposite direction where Roblox is a source of truth and something that people can rely on, and then people can carry stuff out of Roblox into the real world. Is that where your mind’s going?
DB: Yeah, I guess in this example, and of course we have no connection with Elton John, I don’t know if he would ever want to do this.
Yeah, this is all speculative, for sure.
DB: Yeah, this is all speculative, but in this case yes, we would have a validated account that we would stand behind, and there’s already a real world use case. We could imagine the real world version of this, and the collectible value of the ten things Elton John would make could be very high over time. I think in that sense, as you mentioned, this is very consistent with our physical-digital duality in that we’re just mirroring things we might see in the real world in the digital world.
Right, but this case you’re pushing it out from Roblox into everything else.
DB: Yeah, absolutely. And I think in this case maybe making liquid and transparent the value of the digital items in the Roblox world as they might someday have ability to go in and out and off platform.
So speaking of the development in all this, you want everything in Roblox to be user-generated content. Which again, I think really is only possible thanks to the fact you have had such a long runway, and you have a critical mass, and the assumption that that’s the case. There’s no one waiting for a Roblox drop of new items, or things along those lines, which I think is very compelling. It struck me listening to your developer conference, I felt a little bit of AWS vibes, where you said something along the lines of, you’re very famous for all your tracking and your analysis of data, and you wanted to have the same system that you use internally available for developers broadly, so they can do all the same analytics, things on those lines. Is that how you’re thinking about that, that you’re building these primitives, and there should be nothing the community uses that you don’t use, internally and vice versa?
DB: So this goes to the idea of doing really hard technical work, and this example, where a fourteen year old in an analytics class in high school might have access to the same technology our product leaders are using internally, is really difficult because it involves both ease of use self-service, as well as incredible scale and reliability.
Right.
DB: That’s an aspiration that ultimately students would learn about data science by watching events from the class’s 3D experience they created, even though the numbers might be low, and see what happens. And we do think that ultimately there’s a lot of technology in these types of platforms, there’s analytics and events, there’s persistence, there’s cloud-based ML layers, there’s cloud based serverless Lambda function layers, there’s these types of things, where the more we would use the same thing as the Roblox community, we’re leaning on this utility type fabric that is both super scale and easy to use. That’s a very perceptive observation.
How far down the road of this aspiration are you? Is it really just content today, but what you’ve done for content you want to do for the whole stack? Or are you further along in some areas than others?
DB: Yeah, and to be clear, we don’t want to in any way compete with AWS. What we do want to do is as developers get more sophisticated, support them by eating our own dog food, in a sense, and using the same stuff. One of the things we’re just getting ready is we’re moving more and more to what Roblox Studio is, is an application sitting on top of a cloud layer where everything is really happening, and giving developers ultimately the flexibility to ignore Roblox Studio — someone could directly access the place where their 3D place is stored, where they’re updating it, and write Python scripts to do the same thing that Roblox Studio does. So we are in the midst of this stuff.
I am curious, just to go back on this user-generated content question, when you launched Roblox in 2006, how much of this stuff that was in there was produced by you, or has it always been pure UGC from the beginning?
DB: A quick recap-
The more history the better! It’s quite hard to find early Roblox history, so I’m all ears, I’d love to hear more about how this developed.
DB: We knew that we wanted immersive 3D multiplayer immersive stuff. We thought we could get there faster by building with our physics and our 3D stuff something more of a puzzle type experience without avatar or multiplayer. We launched that, and we had a very trying time because we knew within a week this thing was not viral, this was not exciting. So we had to go back to the drawing board and say, “No, you know what, we were right, this has to be 3D multiplayer, avatar based, all of that”. The next round when we launched, the original Roblox was a website with one place, we made it, it was called Crossroads, and you would go to Roblox and you would jump into this one place. We had made it with Roblox Studio, and early on there might be at any time ten or twenty people. We’re talking starting from very minimal level.
We were using Roblox Studio to refine this Crossroad place, we knew we were going to in a few months ship Roblox Studio with cloud persistence, and all of that. When we did that “Singularity Day” three months or four months later and we released Roblox Studio, and then you could push your stuff, and it was sorted by top popular, that was one of those system days where we just said, “We were right”. This UGC system, the virality in that those first days was just like, “I cannot believe what these people are building, it’s better than what we’ve built already, we have thirty new things in the first few hours that are interesting”. It was a real good affirmation of building systems and crowd technology rather than building it ourselves.
What’s so interesting about this is this initial release, it goes out, you immediately want to pull the plug because it’s insufficiently viral. It strikes me this only makes sense as an origin story in 2006, 2007, before mobile, before Facebook ads, because the response today would be well, “Let’s buy a bunch of ads, let’s get people on the platform” and go from there and there’s a bit where because you didn’t have that crutch, you had to immediately pull the plug and find the virality immediately, which is critical, as we discussed at the beginning, you need to play Roblox with friends. And so the virality isn’t just a free marketing tool, it’s actually essential to the experience of the game, or whatever you want call Roblox, the Metaverse, and your long term vision for it.
DB: Yeah, we knew early on about paid traffic, there were some sources of it, I think AdWords or whatever, but I think we used certain words to refer to paid traffic that related to things in the real world that are addicting or bad to use.
(laughing) Right.
DB: So we were pretty aware of that, and we didn’t want to go that way.
Yeah, it’s very interesting. I find this in a lot of companies, and this is why I’m actually very pleased with this conversation, there are some aspects early in a company’s formation and their success that really become core, that’s what culture is, it’s decisions that worked out in the beginning. There’s a sense that I’ve always had, there’s something critical about Roblox and the time that it started, and the time it took you to build, that is essential to your success, and in some cases hard to duplicate, it’s almost like a moat in a way. It really strikes me that this bit is an important piece of that.
DB: For sure, absolutely. I think there were many of those, and there’s a lot of stories about these key cultural metaphors and learnings along the way where we have to have a difficult time, and then at this same time the learning carries forward.
Was one of those learnings around mobile? I think what was interesting, you were relatively late to the iPhone, I think it came out, the iPhone app in 2012 I believe, and it took a while more for Android. I think one of the challenges, and correct me if I’m wrong, is how do you translate a PC experience with your WASD controls, and those sorts of things, to a mobile device, and then you also didn’t have the full Studio experience, which was so essential to Roblox. Was that a tough decision, or was the market just so big you knew you had to do it?
DB: Yeah, this was another really fun thing in the company. So here we are, PC, Mac, working really well. We weren’t super late in that this was eight years ago or something, and at the time we were seeing nothing 3D in the top hundred iOS mobile game sort. I think there was one or two things out there. So the market was early.
Everyone in the company just thought Roblox is a big screen experience, it’s never going to be exciting on mobile. But at the same time a few of us really pushed, we built a prototype, digital, dynamic thumb control, and this was a vision push with a few of us just saying “No way”, we just got to roll the dice and build this, because we had this vision that immersive 3D digital stuff would go through the same transformation that 2D HTML did with the iPhone, and that is you’re used to it being on the big screen, there’s no mobile web pages, there are these cheesy mobile web pages, then in the case of HTML someone comes along and says, “Oh my gosh, with a pinch and a zoom, all of a sudden any website, I can use it on my phone!”.
We were pretty convinced there’s got to be this similar thing with 3D, and that 3D cloud is universal. So we built it, we kept it exactly the same tech PC, Mac, iOS, Android. Started slowly and now it’s, it’s so funny, we’re here eight, ten years later and it’s a “duh”, right? Fortnite, Free Fire, everything of course. But it took a little bit of a leadership vision to push that through
The economics are very interesting. On one hand you have this pretty significant chunk of money owed to the platform controllers, particularly when it comes to mobile, that doesn’t mean there’s much left for developers. On the other hand, different Roblox games have been defined as experiences, which has let you build out this entire unique economy where you don’t have to have separate listings for all these different experiences, etc. Does it feel like Roblox perhaps because you were early and you got to define the space, you end up being a real winner as far as mobile platforms go and the rules that have grown up around them?
DB: Yeah, I would say we would never take that for granted. So we would always assume every day we’re having to reinvent and rethink where we’re going to go. Internally the way we always think about it is we want to be sitting on a vision for three or four years out that is very difficult, highly technical, is going to require four or five big engineering product innovations, and we want to make sure we’re not just purely iterating, or purely polishing. We’ve always held that, and right now we’re sitting on our seven big things for 2025, they’re all very, very difficult. So I think it’s always assuming we have to keep pushing this forward really, rather than taking for granted where we’re at.
One of the things where you’re at is, and you see this in gaming on mobile broadly, is particularly with the recent changes in rules and regulations around ATT, that the more integration the better. And so you see all this integration happening in the gaming space, so they can know who their customers are. It’s funny, again, Roblox feels so far ahead of things where everything is one experience to the extent that you’re allowed to have these distinct experiences that are not defined as different apps, they’re defined as being part of one app, which is great for you from a monetization perspective and from a user experience perspective.
It also seems unbelievably compelling from an advertising perspective. I know you have ads on your website, and you’ve talked a bit about ads in the game, but given that your capability of understanding your customers and doing customer acquisition, not for yourself, but for your developers, you have so many advantages relative to anyone else, how much of a priority is that? And is that becoming more of a priority with these changes?
DB: Yeah, one of the things we’ve seen working with brands, whether it’s Nike, or whoever, is they do want to create experiences and bring attention to that experience, so there’s a wonderful opportunity to build an elegant, consistent way for people to find those experiences on Roblox, and especially not go off platform and find them and do that, and so that’s really, really important. We have that in a primitive way right now, and we’re building a better way of doing that that we think is Roblox-authentic, is good for everyone on the platform, so more good stuff to come.
The other one would be just advertising in general. We’re being very, very cautious here because I think there’s a really exciting type of advertising on Roblox which involves: I go to the Nike store, I get to wear Nike shoes around, I love the brand, and I’m wearing that brand, rather than getting that brand flashed at me, that’s a native-digital type experience. We really want to make sure those types of things happen in an authentic way. So there’s a huge opportunity, we’re going pretty slowly actually, we’re working with a few brands, but if anything we’re focusing more on user engagement and quality of these experiences rather than the advertising money from them.
So the focus is more on the brand advertising, as opposed to Roblox developers being able to acquire gamers for their particular experience.
DB: I think there’s a place for Roblox developers to acquire gamers for their experience if we’re very clear that this is sponsored discovery rather than it’s unclear, “Are you showing this to me because it’s recommended for me or because it’s sponsored discovery?” I do think there’s a role for sponsored discovery for new developers who want to boost traffic or something.
There’s always a lot of questions about Roblox as far as the age of your user base, and you’ve been talking a lot about how the number of users over thirteen have now crossed 50%, you’ve announced potential thirteen-plus only experiences in Roblox. I’m curious how this ties in with the loop you see with developers and users, where in the long run users of Roblox become developers of Roblox. How does this relate to the long term challenge as far as age goes? Is it more pressing for Roblox to figure out how to acquire and keep older users, or acquire and keep older developers? Or is it the same problem?
DB: They’re the same opportunity, I would say and one thing we’ve seen is I think in December 40% of the top thousand experiences on Roblox had more thirteen-and-up players than under-thirteen players.
Are those people mostly aging up into that? Or are you acquiring new users?
DB: It’s a mix of aging up and acquiring. It’s always elegant to think of this from a user standpoint. If we solve for user retention we get new users for free, because we get word of mouth and we make a much better product, so it’s fun to think of it as simply we’ve got a lot of nine through twelve people on the platform, let’s really be thoughtful of why would they stay on Roblox for a long time and do that kind of stuff, and that’ll bring new players. From developers, as the platform gets bigger, what would it take for a developer to build experiences aimed at thirteen through sixteen? They probably need really great tools, they need great discovery so thirteen through sixteen year olds can find that, they might need experience guidelines, there needs to be a lot of money there so they can support themselves. In that sense we’re farmers creating an ecosystem that hopefully those older developers will grow, and we’re seeing that, we’re seeing VC-backed studios going from ten to forty to north of fifty people in the studio, so we are really in the middle of this aging up, it’s not a new thing.
You built slowly so they could build quickly.
DB: Yeah, there you go.
Well, I know we went a little long, I appreciate you taking the time. It’s a fascinating company, and there’s not enough information out there about it, so I’m glad that we could dive into it a bit.
DB: Hey Ben, this was wonderful, and I’m happy to chat more anytime. Thank you.
All right, thank you.
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