Is the Roblox Builders Club worth the money
Gamer as an entrepreneur
Millions of children play video games on Roblox. Not exactly unusual for a social gaming unicorn. What's unique about it: Children learn the basics of programming - and get paid like entrepreneurs.
When Alex Binello was 13 he started playing games on the Roblox website. He really enjoyed spending time doing titles like “Work at a Pizza Place” and “Down Hill Smash!” - so much so that he was inspired to build his own games. Today, eleven years later, he is the creator of "MeepCity", a huge role-playing game that had 15 million visitors on the Roblox platform in July (2018, note). Forbes estimates that the cartoonish game Binello has grossed millions since its inception in 2016. The 23-year-old, who has never attended a single computer programming course, now employs a salaried creative director and six other freelancers to keep his game up to date. “Roblox was just part of my life,” he says. "It makes me feel a little privileged."
Roblox, based in San Mateo, California, is a combined game and social media platform. There are millions of games that gamers, mostly young people, can explore with their friends by chatting and interacting.
... The games and social media platform Roblox was founded in 2004 by David Baszucki (CEO) and Erik Cassel (passed away in 2013). Roblox has more than 70 million visitors per month, and almost a million games are created by the developers every month.
But what's unique about Roblox is that the game company doesn't actually produce commercial games - Roblox just gives the kids the tools and platform to create their own unique creations. What is impressive is that Roblox has turned its users into an army of new entrepreneurs. Developers can request Robux, a virtual currency, for various items and gaming experiences; and they can exchange the Robux they earn for real money: 100 Robux pays 35 cents (players can buy 100 Robux for one dollar).
"Many of the Roblox developers grew up with the platform," said David Baszucki, Roblox co-founder and CEO, 55. "And many of them are now starting to make a living on the platform." It turns out that children are pretty good at making games that other kids will enjoy. Roblox has more than 70 million visitors per month worldwide. According to Comscore, six- to twelve-year-olds spend more time on Roblox than any other site on the web. Roblox ranks second among teenagers, just behind Google's sites, including YouTube.
Behind this are some pretty impressive numbers: Roblox is cash flow positive with estimated sales of $ 100 million in 2017 (in 2018 this should be over $ 200 million) and has around $ 185 million in venture capital recorded. The company is valued at around US $ 2.5 billion. Baszucki's stake is worth an estimated $ 300 million (Roblox's other co-founder, Erik Cassel, died of cancer in February 2013.)
Part of the growth is due to the sheer number of games produced: almost a million games are created on the platform by more than four million developers every month. The games cover a variety of genres, from traditional racing and role-playing games to the popular “robber and gendarme” game “Jailbreak” to everyday simulations such as “Snow Shoveling Simulator” and “Work at a Pizza Place”. The platform has even spawned its own genres, such as obbys, complex obstacle courses that are difficult to navigate.
"It's almost like we're running American Idol for aspiring game developers," says Baszucki. Roblox originated in a company founded by Baszucki in 1989, an educational technology start-up called Knowledge Revolution. The company created a program that served as a 2-D laboratory where students and teachers could model physical problems using virtual levers, ramps, pulleys, and projectiles. As his software became increasingly popular with students, Baszucki discovered that children were using the program to do things that went well beyond the problems of "textbook physics". In 1998, Knowledge Revolution was bought by engineering software company MSC Software for $ 20 million, so Baszucki decided to take some time off and see what he wanted to do next.
Inspired by the worlds the kids had built with his interactive physics program, he and Erik Cassel, former vice president of engineering at Knowledge Revolution, “went into retreat for over a year and a half” to build the first version of Roblox. "Right at the beginning we imagined a new category of people who do things together," says Baszucki. "A category that involved friends like in social networking, a category that included immersive 3-D like gaming, a category that developed cool content like a media company, and finally a category that had unlimited creativity like a building toy."
For the first few months after Roblox went into beta in 2005, the user community was tiny. At peak times, around 50 people were playing at the same time - today it's an average of over a million. But the small size of the community at the time allowed Baszucki and Cassel to hang out with the players and get feedback as they continued to develop the platform. When the duo released Roblox Studio - the app that enables Roblox users to create games and simulations - everything changed. By 2012, Roblox had more than seven million visitors a month, making it one of the most popular entertainment sites for kids.
As the company grew, it also experimented with different business models. Originally, the income came from advertising and the premium membership model "Builders Club". But after a few years the company switched to its current model: selling Robux. This enables young developers to receive part of the income from their games. In 2017, the developers made nearly $ 40 million on the platform. It is expected that this figure will exceed the 70 million mark in 2018. Roblox has also started making toys from popular games, such as action figures and plastic cars. The platform shares the money it earns with these toys with the developers - they were able to earn an additional US $ 1 million in license fees in 2017. "We're just giving developers the ability to find out all of this for themselves," said Craig Donato, Roblox's chief business officer. “If a developer is too aggressive with monetization, the kids won't play. If you have a great idea, it will be copied. "
The company also helps budding programmers get better. The annual developer conference attracts Roblox developers from all over the world to meet and share tips and tricks. The company also has a paid internship program that acts as an incubator or accelerator for young developers to develop and improve games. The program at the company's headquarters in Silicon Valley teaches project management skills and makes interns responsible for delivering their projects on time.
The next phase is internationalization: although Roblox users come from more than three dozen countries, the platform was previously only available in English and only on a dollar basis. That changed a few months ago when Roblox launched a Spanish version. Since then, the company has had an average of five million monthly visitors from Spanish-speaking countries. The company has also produced Brazilian-Portuguese, French and German versions.
“It's super exciting that a kid in Jakarta can program a game that a kid in Menlo Park would never imagine, but that is really fun and relevant to other kids in Southeast Asia - and maybe also to the kid in Menlo Park”, says Chris Misner, President of Roblox International. “Our hope is that we will bring people all over the world together,” adds Baszucki. Despite the enormous growth of the platform, Baszucki still maintains contact with his power users - even if many do not know his name. During a company tour for players on a Friday morning, a tour guide asked the children if they had ever heard of Dave Baszucki - they all shook their heads. Then she asked if they knew Builderman - Baszucki's name in Roblox - and the group replied with a loud "Yes!"
Text: Alex Knapp / Forbes US
Photos: Timothy Archibald / Forbes US
Translation: Wolfgang Steinhauer
This article was published in our February 2019 issue of “Gaming - Competition”.
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