Roblox is a metaverse composing millions of independently produced games published on the platform. ‘Roblox’ in itself isn’t an actual game. It’s the platform hosting nearly 40 million titles, known as ‘experiences.’
The experiences vary from short adventures that take a few minutes to okay, to multiplayer worlds with hours of content. Users that sign up to develop games on the Roblox platform do so with the express interest in developing the ecosystem.
The Roblox slogan is ‘Powering Imagination.’ It provides a platform, encouraging developers to take advantage of the Roblox ecosystem to build user gaming experiences. Therefore, Roblox sees itself more as a developer assistant than a place hosting games.
However, Roblox isn’t a free platform. It uses its native token, ‘Robux,’ to finance transactions in its ecosystem. Players can sign up for games and purchase Robux to enhance their gaming experience. Developers receive Robux rewards, which they cash out to fund their development costs.
Roblox is a huge platform. The website gets 37.1 million daily active users, with Roblox experiencing a surge in users during 2020 and 2021, adding more than 23 million new users during this period.
It’s also interesting to note that the average age of gamers and developers on the platform is 12 years old. That means that it’s a digital metaverse built for kids by kids.
We take an unbiased dive into the tech and products behind Roblox and also how to buy the RBLX stock.
How to Buy Roblox Stock (RBLX)
- Ticker: $RBLX: NYSE
- PE Ratio (TTM): N/A
- EPS (TTM): -0.89
- Earnings Date: Nov 07, 2022 – Nov 11, 2022
- Forward Dividend & Yield: N/A (N/A)
- Ex-Dividend Date: N/A
- 1y Target Est: 43.42
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Roblox Games and Developers
Roblox targets kids. More than 505 of all players using Roblox are under 13 years old. So, Roblox presents a colorful and engaging platform to kids, attracting their attention. Kids can sign up for Roblox and start playing other creators’ games or build a game themselves.
Roblox offers a suite of user-friendly developer tools kids can use to create an experience for users. Getting started is easy; even kids as young as eight or nine can learn how to build games using the Roblox development tools.
Roblox offers a drag-and-drop interface, allowing kids to easily construct digital worlds. Roblox markets itself as a conduit for kids’ creativity, focusing on the development side of the platform. However, the reality is that the player-facing part of the user experience nets Roblox its revenue.
Roblox promotes the fact that it offers developers Robux earnings for building games. But the company makes more money from in-game purchases than any other part of its business model.
Roblox: A History
Erik Cassel and David Baszucki founded the Roblox Corporation in 2004. David had previous experience in tech through founding ‘Knowledge Revolution’ in 1989, focusing on educational software development.
In the first year of company operations, he and Cassel developed the ‘Interactive Physics’ product, a 2D physics simulator. They also developed the ‘Working Model,’ a mechanical simulator. Knowledge Revolution was sold in December 1998 for $20 million to MSC Software, with Cassel and Baszucki retaining senior positions at the firm.
Baszucki served as the VP from 2000 until 2002 before leaving to build his angel investment firm, Baszucki & Associates. He founded the Roblox Corp alongside Cassel in 2004, with the duo working out of offices in Menlo Park, CA.
people come together.
The team began working on ‘DynaBlocks,’ which they launched as a beta in the same year, changing its name to ‘Roblox’ in 2005. The game was officially released to the public on September 1, 2006. Unfortunately, Cassel passed away after a long battle with cancer in February 2013.
By December 2013, Roblox Corp had 68 employees, increasing to 163 by December 2016. In March 2017, the company secured an investment of $82 million through a funding round led by Index Ventures and Meritech Capital Partners.
Roblox Corp hired Chris Misner in May 2018 with the hope of using his experience to help the company penetrate international markets. In 2019 Roblox launched in the French and German markets, and in China, in partnership with Tencent.
The Roblox IPO and Direct Listing
Roblox started raising funding in 2020 using a series G led by Andreessen Horowitz. It raised Roblox Corp $150 million, earning the company a $4-billion valuation and entry into the Silicon Valley’ Unicorn Club.’
By October 2020, Roblox Corp started planning its transition to a public company. Management evaluated the benefit of an IPO or direct listing as the most effective means of going public.
By the end of October, Roblox Corp filed with the SEC to prepare for its $1 billion IPO, with the goal of being listed on the New York Stock Exchange (NYSE) under the ticker symbol ‘RBLX.’ At the time of the IPO, Roblox Corp had 830 employees.
However, the management team shifted direction in January 2021, pulling the IPO in favor of a direct listing. The SEC stepped in to delay the IPO after requesting information from the Roblox Corp regarding its reporting for sales of Robux.
Despite these issues, the NYSE approved the Roblox direct listing on its exchange in February 2021. The Class A shares started trading on the NYSE on March 10, 2020. The direct listing gave Roblox Corp an estimated $4.19 billion valuation.
According to the Roblox IPO filing, it has 32.6 million daily active users, up 85% year-on-year. Revenue surged 82% for the year to $924 million. However, the company showed a net loss of $253 million vs. a $71 million net loss in 2019.
Robux: How Roblox Monetizes Their Ecosystem
The Roblox ecosystem runs on its virtual cryptocurrency, ‘Robux.’ Users can spend Robux on the Roblox platform to enhance their game experience. Users can spend Robux to buy games, private servers, and other in-game features.
To acquire Robux, the user must earn it or purchase it. The most convenient way to get your Robux is by purchasing it directly from the platform. However, you can also pick up Robux gift cards online and in stores like Walmart.
Game developers earn Robux for contributing to the Roblox ecosystem. However, it’s not as easy as you think to build a successful game on the platform and receive millions in Robux. The vast majority of the Robux volume moving through the Robux platform comes from users making Robux purchases.
How Do I Buy Robux?
Most Roblox users don’t want to earn currency developing games. They just want to use the platform to have some fun. So, the easiest way to stack your Robux wallet is by purchasing Robux. Robux is available in the following package deals to suit your budget. You get a discounted tier structure, incentivizing users to spend more purchasing large Robux bundles.
Robux bundles are available at the following price points.
- $4.99 = 400 Robux
- $9.99 = 800 Robux
- $19.99 = 1,700 Robux
- $49.99 = 4,500 Robux
- $99.99 = 10,000 Robux
So, what can you buy with Robux, and what does it cost you for in-game purchases? Well, as an example, you can create a badge or a group using 100 Robux. You’ll have to pay 1,000 Robux to change your user name and spend 50,000 Robux to purchase the ‘Violet Valkyrie,’ the most expensive hat in the Roblox metaverse.
Roblox Premium
You’ll need to take a Roblox Premium membership if you want better prices on Robux bundles and exclusive access to Roblox content. There are different tiers, ranging in pricing. Each month, subscribers receive a set amount of Robux depending on the subscription tier they choose to join.
You get a 10% discount on any Robux top-ups outside your monthly subscription bundle if you’re a premium member. Premium members can also trade in-game assets with other premium users.
The Roblox platform encourages developers to produce game titles that offer exclusive levels to premium members only and discounts on in-game digital assets or exclusive purchases. Premium members get billed monthly, refreshing your Robux.
If you want to sign up as a ‘builder’ or developer in the game, you’ll need to be a premium Roblox member. There are three tiers for Premium memberships, with a specific amount of Robux allocated to each level.
- $4.99/month = 450 Robux per month.
- $9.99/month = 1,000 Robux per month.
- $19.99/month = 2,200 Robux per month.
Regardless of whether you take the low or high Premium tier, you get access to all the same premium features on the platform. However, the top level of Premium membership also unlocks the bonus accessories feature, along with membership gear and the developer exchange.
Can you Earn Free Robux?
Users can earn free Robux, but it’s more challenging than you think. The Roblox ecosystem is configured to sell Robux and have users spend it on the platform. Therefore, even if you use methods to acquire free Robux, chances are you’re not going to receive substantial amounts.
However, you have a few options if you want to start earning free Robux. You can sell clothing items in a shop, or you can develop games. Creating games on the Roblox platform takes time and effort. With millions of games on the site, and thousands produced every week, the chances of your game becoming a smashing success is a mixture of luck, good development, and user experience.
You have the option of building in-game purchases into your title, earning you a percentage of the Robux users spend in your game. You can also create a pay-to-play game, charging users for the gaming experience.
What Does Robux Buy in Roblox?
What can you purchase with Robux on the Roblox platform? Users can spend their Robux on games, buying premium servers to play private games with friends or make in-game purchases of digital assets.
Each game on the Roblox platform comes with unique in-game purchases relating to the game and the Roblox metaverse. Some in-game purchases are transferable between worlds on the Roblox platform, such as avatar upgrades, and others only exist within a specific game world.
Some games may offer the user speed boosts or premium skins for use within the game. When you spend Robux in-game, a pop-up window appears on the screen, giving you the transaction details, including how much Robux you’re spending and your balance after the transactions close.
There are millions of custom clothing items for sale on Roblox to help you upgrade your avatar. You’ll find yourself scrolling the options for hours, from hoodies and hats to shoulder pets. Users can purchase emotes, allowing their avatars to make motions like movements or dances within the game.
Advertisers must spend in Robux to advertise on the platform, bringing in more spending to the Roblox economy.
Should You Buy Roblox Stock?
Roblox is an international sensation and one of the most visited sites online. The company continues to grow from strength to strength, despite the controversy in media surrounding its predatory behavior toward children with the Robux system.
- Roblox remains a popular site for kids, built by kids. The company’s stock performance saw huge gains in the 2021 mania, reaching an all-time high of $135 per share before bottoming out at $26 in June 2022 and moving back to the $50 range in August.
- The company’s $4.1 billion valuation makes it one of the most valuable organizations in Silicon Valley and one of its biggest successes. It also emphasizes the potential of the online gaming space, Play-to-Earn, Pay-to-Play, and blockchain-based gaming models.
- With Roblox going public, it received the funding it needed to bring sustainability to its operations and reach new levels of success.
- While the stock may be recovering, it’s exposed to a pending recession which would see a pullback in growth stocks and tech.
- However, if we see risk-on mode in the stock market, you can expect Roblox to benefit from this upward momentum.
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