Roblox grew seven times in value during the pandemic era, its user base exploded, and tens of millions of people attended a hugely popular Lil Nas X performance. That achievement was primarily made possible by Roblox’s core player base of young, enthusiastic gamers.
Now that those children are becoming older, Roblox is attempting to mature as well. The user-generated gaming platform is working to appeal to an older demographic, increase its revenue streams, and yet meet the requirements of its millions of youthful players. Today, it announced intentions to apply age restrictions to its games and greatly increase its advertising business.
The adjustments mark a significant shift in how Roblox views its users and how the business conducts advertising. Soon, Roblox and the millions of users making games for the site will have a new revenue stream and the chance to market to a little older audience. Whether Roblox is able to turn these new features into growth and revenue will determine whether it can scale to become a billion-user platform with thousands of creators making a living off of it.
“When we first started, most of the users on our network were under 13 years old. Roblox CEO David Baszucki told The Verge, “We’ve crossed a massive threshold now where the majority are over 13 years old. We have a lot of hope that over time, this kind of technology will enable people all around the world to connect and interact with one another in a variety of ways.
Up until this moment, Roblox may have been best recognized for its appeal to young people; the firm had claimed that more than half of US youngsters under the age of 16 played Roblox. As its user base ages, Roblox is now searching for strategies to keep them coming back and provide marketers with more specific channels for targeting the 52.2 million daily active users.
Today at the company’s annual developer conference, Baszucki unveiled a number of significant platform updates, including a new immersive ad system that will enable marketers to reach users of millions of games, or “experiences,” as they are known on Roblox. Up until recently, producers had to pay for banner adverts using the in-game currency Robux, which frequently led to the production of absurd meme-like works intended to draw gamers to their websites and games. Additionally, well-known companies have entered the Roblox market by collaborating with developers to design unique experiences. Examples include Gucci Town, Spotify Island, and even a virtual Chipotle restaurant.
Through interactive billboards, posters, and other surfaces, the new advertisements system allows businesses to promote their products across Roblox experiences. The new ad system will allow artists to place 3D ads into their own experiences and receive a share of the ad revenue, first working with a small set of businesses and developers. Examples of such experiences include a billboard at a sports stadium or on top of a taxi in a game. Brands will be allowed to have “portals” that function as a tunnel between games and take players to a new branded location in Roblox, such as a shoe store or a coffee shop, in addition to adverts within user-created experiences.By the end of the year, the company will start testing immersive commercials, with a full rollout scheduled for the following year.
“In fact, Roblox will have 3D ad units that work as a big ad server for all of these businesses, where appropriate,” claims Baszucki. “We take great care in choosing the original brands. However, over time, this will increasingly transition to a self-service model for brands that fit our platform.
Although the effectiveness of advertising in the metaverse has not yet been established, businesses are already looking to it as the next location to reach consumers. The money that may be produced in the metaverse may be indicated by in-game purchases on platforms like Roblox and Fortnite. For instance, Fortnite made $50 million from skins from only one NFL deal, and in Roblox, some players paid hundreds of dollars for virtual Gucci goods. But last quarter, Roblox “bookings,” or the amount of Robux that users buy and from which the firm takes a cut, fell short of forecasts. Following a surge in popularity during the pandemic, Roblox went public last year; however, its stock has since plummeted and it is not yet profitable.
While the management of the company’s current on-platform advertising is under review, there is a drive to add more ads to Roblox. The watchdog group Truth in Advertising claims that branded Roblox experiences are inadequately recognized, making it difficult to tell whether a game is sponsored, especially for young children, in a Federal Trade Commission complaint submitted earlier this year. According to Baszucki, Roblox will implement immersive ads with “extreme conservatism”; businesses will only be allowed to connect with users 13 years of age and older, and Roblox will make it clear when experiences feature ads.