Game Platform Roblox Raises $92 Million To Build “Ultimate” Virtual Playground

By Kevin Ohannessian

You may have heard of virtual gaming worlds Minecraft or Second Life, but Roblox, a smaller entity that dates back to 2006, is determined to give both a run for their money. And on Tuesday the company announced it’s raised $92 million to back that vision.

“Every month 48 million kids from around the world come to play and create and imagine. They do it in an immersive, 3D environment created by the community. We have a big vision to create the world’s ultimate social platform for play,” says David Baszucki, CEO of the San Mateo, California-based company.

Roblox, named after “robots” and “blocks,” is a cloud-based gaming platform that is visually a cross between Minecraft and the Lego games, with a dose of physics-based realism. Players, most of whom are between the ages of 6 and 24, create games and experiences like they do in sandbox worlds like Minecraft or Terraria—think shooters, fighting games, and role-playing games. But on Roblox, all the content is 100% user-generated, and creators can earn revenue from their creations, selling premium content inside free games.

“Our top developers are making over $50,000 a month. They are starting to form small companies and studios with five or six people, all working to create immersive experiences that people come together and play and imagine in,” says Baszucki.

Roblox, which makes money from commissions it takes on the micro-transactions conducted on the platform, previously raised $10.5 million in funding in 2011. The company, which has 163 employees, has not disclosed last year’s financials, but in 2015, revenues amounted to $52.3 million.

The audience that creators have access to on Roblox itself is substantial: 48 million users—half in the U.S., half overseas—playing 22 million games. There are 1.7 million developers creating the content, according to the company, and there have been over 1 million users on at once, with top games having 20,000 or so players at any time. Altogether, 300 million hours are spent on Roblox each month. Though we know Minecraft has sold at least 107 million copies across PC, mobile, and console, we don’t know how many actual users that is, since players may buy multiple copies for different devices. Either way, at 48 million, Roblox is about where Minecraft was three years ago.

Some of Roblox’s developers are now in the IP business. In January toy maker Jazwares announced it had partnered with the platform’s leading developers to release physical versions of Roblox’s top user-made characters and avatars, which are already available for sale at Toys R’ Us. It wasn’t the platform’s first big partnership. The company partnered with Disney in 2015 to create branded virtual spaces, such as a virtual Disney World and virtual rides like Space Mountain.

Roblox’s Reachability

Part of Roblox’s success can be tied to its accessibility. Content is created on PCs and Macs, but then uploaded to the cloud. Once there, not only can players on both computer platforms play, but also users on both iOS and Android mobile platforms and on Microsoft’s Xbox One console. Roblox even supports the Oculus Rift headset to allow players to enjoy games in virtual reality. And with the cloud, there is cross-platform play between all devices.

“People are playing together on a wide range of devices,” Baszucki says. “VR provides the most immersive way of playing with Roblox, but we think it is very important that VR players can play with players on other devices. Our VR players can enter busy, vibrant, social environments, and so they can play with their friends that may not always be on a VR headset.”

David Baszucki, founder & CEO

Baszucki revealed that this round of funding, from Meritech Capital Partners and Index Ventures, will help the company improve the Roblox Studio program used to create content, including more tools to specialize games for mobile platforms or for VR. The company says it’s also exploring ways to make creation more accessible from other devices.

The developers on the platform are already pushing for more creative choice. Some Roblox games now make creation a part of the gaming experience.

“We are starting to see more and more Roblox games that offer creation. An example would be Theme Park Tycoon, which lets anyone construct a theme park on any device. You get to build roller coasters and theme parks, your work is saved, and when you come back, you can keep working on your creation,” says Baszucki.

One of countless popular YouTube videos devoted to Roblox YouTube/Guava Juice

The platform’s popular games include a bird simulator, a pizzeria manager, and one where you survive natural disasters on an island, all of them multiplayer and cross-platform. Like the venerable online world Second Life, the Roblox platform was built from the ground up to support social interactions. Players can chat and message each other and enjoy experiences together.

Parental Concerns

Like many massive online games for kids, there have been concerns about inappropriate chat messaging reaching children. Last month, reports online raised concerns that pedophiles are using Roblox to contact underage users. In a recent blog post, the company addressed the concerns, noting that besides a variety of parental controls, Roblox uses white lists for chats with children under 13, limiting the words allowed to a specific list. Parents can also turn chat off altogether, as well as utilize other safeguards, if they wish.

Part of the employee expansion from the new round of funding will go toward improved moderation software and human moderators, says Baszucki. “The safety of our community is a top priority, and we’re constantly assessing and improving our trust and safety measures,” which rely on “technology and human oversight,” he said. “This is a priority for us. We want all users to be safe on Roblox, and we will continue to invest in the safety of the game so it is a positive, productive, fun, and protected space for our community.”

With a platform whose millions of players are also the ones generating all of the content, the company can focus on improving the creation tools, the social interaction, and the overall experience, says Baszucki.

The graphics and physics of Roblox have been upgraded and likely will be again, as it continues into its second decade of use. And as new Studio tools are released, new game play will emerge. The players themselves will make the games worth playing. After all, they know what they want to do and how they want to engage.

Baszucki hopes—and VCs are betting—that this online-play platform will continue to expand into new kinds of social interactions in virtual spaces.

“We believe ultimately that human co-experience–doing things together as a social platform for play–is a new category. It’s differentiated from toys or games or social networking in that it’s people doing things together in real time. And like YouTube, all of these experiences are created by our community. There’s an infinite variety of these experiences,” says Baszucki.


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