This video game is turning teenagers into millionaires — and it’s on track to pay out $70 million more this year

Posted: July 14, 2018 in Game Articles

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by Matt Weinberger via Business Insider

If you’re under 18 or know somebody who is, there’s a pretty good chance you’ve heard of Roblox, a massively popular online gaming platform with 64 million players that also turned three teens into millionaires last year.

This weekend, Roblox is hosting its annual Roblox Developers Conference in Burlingame, California, very close to San Francisco. At the event, the company is expected to tell the 4 million developers building games for its platform that it’s on track to pay them a collective $70 million this year, up from more than $30 million last year.

“There’s enormous upside in the size of our opportunity here,” Roblox CEO David Baszucki told Business Insider.

Some of that upside is for the company itself. Earlier this year, Roblox announced it was cash flow positive for the first time, with “hundreds of millions” of dollars in bookings in 2017. More recently, Recode reported, citing a company filing, that Roblox was fundraising at a valuation of up to $2.4 billion. Baszucki declined to comment.

Unlike “Fortnite” or most other smash-hit video games, Roblox is created entirely by its users. All 40 million Roblox games, including popular ones like “Meep City” and “Jailbreak,” were made by its base of mostly younger independent developers. If a player chooses to spend the premium virtual Robux currency — which costs real money — in a game, the developer gets a cut.

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“Meep City” is the most popular game on Roblox. Matt Weinberger/Business Insider

That has meant big opportunity for Roblox developers. Last year, one top creator cleared $3 million in earnings, while two more claimed $2 million. Others are paying for their college educations or even starting their own companies to make more Roblox games.

Now, Baszucki says, as the platform grows so too has the opportunity for developers. While not every Roblox creator can make millions, “the long tail of developers who are making a living has grown exponentially” over the past year or so, he said.

To keep the momentum going, Roblox has hired the former Activision exec Enrico D’Angelo as vice president of product for the developer platform. The goal is to keep building the behind-the-scenes tools that developers use to build their games, in pursuit of what Baszucki says is the ultimate, ambitious goal of the Roblox platform.

“We have an enormous vision for a new category for human interaction and, ultimately, immersive entertainment,” Baszucki said.

To that end, Baszucki also highlighted the company’s educational efforts: This summer, Roblox has planned more than 500 coding camps and other introductory classes, using its platform as a learning tool.

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“Jailbreak” is another massively popular Roblox game. Matt Weinberger/Business Insider

Importantly, those classes are both in the United States and abroad in countries including Canada, Brazil, and the United Kingdom — highlighting what Baszucki sees as a major opportunity to bring the platform to international audiences.

For more established developers, Baszucki says Roblox is working on ways to engage with them and help them be more successful. For instance, the company has begun inviting developers to come to its Silicon Valley offices for two- or three-month residences, giving them direct access to the people who make the platform.

“We’re developing a lot of resources for developers to build their knowledge,” Baszucki said.

Finally, Baszucki says that if Roblox is going to reinvent entertainment as he believes it will, it must continue doubling down on finding other ways for developers to monetize that goes beyond their games. The company recently got into the action-figure and apparel businesses, licensing popular characters from top Roblox games. And Baszucki says there’s no reason Roblox games couldn’t inspire movies, TV shows, or a web series either.

Developers’ vision “goes beyond creating gameplay,” he said. “There’s enormous value in their stories, avatars, and situations.”

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