How Roblox outbuilt the market, and what its CEO says is coming next
Roblox is an $80 billion business that has tripled in the stock market over the past year, become the target of a prolific short seller, and been the subject of intense scrutiny over concerns about kids’ safety on the platform.
And its CEO didn’t even mean to start a kid-focused company. It just happened along the way.
“When we started Roblox, the vision — the long-term vision — was: to what extent could we simulate 3D reality? It takes incredible technical innovation to get there. It’s very different than downloading a game. It’s very different than streaming video. It’s the fabric of the metaverse,” CEO David Baszucki told Sherwood News. “It just so happens, games overlap a lot with reality simulators.”
It’s one of the hottest stocks, having garnered significant engagement from the retail trading crowd. Its shares have risen about 200% in the past year, far outpacing the S&P 500’s increase of 17% over the same time frame.
This spring, when the platform saw a new peak of 12.5 million concurrent players, a Roblox board member told us, “That is 173 NFL football stadiums, full, playing Roblox at the same time!” Since then, a spokesperson says, it’s hit 30 million concurrent players.
The company pulled in $3.6 billion of revenue last year, growth of 29% from the prior year. It has a goal of capturing 10% of the world’s video game activity; execs figure they’re at 2.4% right now.
Whether it will become a profitable business still remains to be seen.
Roblox posted a net loss of $935.4 million last year, and it has yet to produce an annual profit — or even a single profitable quarter — since it went public in early 2021.The Takeaway
Baszucki says Roblox is “less a game than a 3D social platform where you and your friends can pretend to be in different places.” With the end goal of reality simulation still a long way off, Roblox is working to hold on to a customer base that’s constantly aging away from the game — just 19% of Roblox users are over 25.
How in the world is Roblox still LOSING money!! Makes no sense!!!