Thread by @petergyang

Roblox is a company that sits at the intersection of gaming and the creator economy.

It has also been building the metaverse for 17 years.

Naturally, I have to do a deep dive.

New post and thread below:
creatoreconomy.so/p/roblox-gamin…

1/ Games are expensive to make. The Last of Us Part II took 2,000+ devs 6 years and $100M to ship.

But what if the players themselves could craft the game?

2/ Most of Roblox's content comes from its 8M creators, so I see Roblox as a 17-year old creator company:

1. Creators craft avatar items and games
2. Players enjoy a creator's content and pay
3. Creators get a share of earnings

Roblox saw rapid growth during the pandemic:

3/ Roblox now has:
8M creators
43M daily players

Over half of these players are under 12 years old and 72% play on mobile.

Kids are hanging out with their friends in Roblox instead of on social media.

4/ Roblox's top game, Adopt Me, has 64M monthly active players.

That's only 16M less than Fortnite's 80M MAU (from June 2020).

Adopt Me is a surprisingly sophisticated simulation of raising a virtual pet.

5/ So creators on Roblox must be making a lot of money right? The answer is: Yes, but only a few:

1.25M creators made money
1,250 made more than $10K
300 made $100K or more

6/ In total, Roblox creators made $329M in 2020.

While impressive, these payouts pale in comparison to Roblox's annual revenue ($920M) and the payouts from other leading creator economy platforms (e.g., Patreon's $1B).

So what's going on?

7/ Roblox does a lot for creators - helping them publish content, grow an audience for their creations, and make money.

But for every dollar a player spends in a Roblox game, the creator only keeps $0.25.

8/ In a time when platforms are competing to offer lower take rates to creators, Roblox’s 75% is an outlier.

The breakdown:
25% for App Stores and payments
22% for Roblox hosting and investment
27% for Roblox's operating costs

Running millions of virtual worlds is expensive.

9/ Let's close with the metaverse. Everyone wants to be a metaverse company these days.

In Roblox's vision, you can:

10/ What excites me about Roblox's vision is that it goes beyond gaming as entertainment.

Roblox wants to empower creators to build "games" to help people:

Learn: e.g., Explore ancient Rome.
Connect: e.g., Experience a new culture.
Work: e.g., Work in a virtual space.

11/ It's easy to dismiss Roblox (""The graphics aren't great.") or claim that your company is all about the metaverse.

But Roblox has been quietly building the metaverse for 17 years, taking a creator-first approach from day one.

That makes it special.

12/ I plan to interview a Roblox product lead next to get an insider's perspective.

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