How Roblox became the ‘it’ game for tweens – and a massive business

Video games are having a moment during the pandemic, perhaps none more so than an oddball create-your-own game sandbox called Roblox.

If you’re a tween, there’s a very good chance you’re playing Roblox. About 75% of American children ages 9 through 12 play Roblox regularly with friends, according to the company. During the pandemic, kids flocked to Roblox to throw virtual birthday parties and other in-game events that were no longer as safe to hold in-person. In July, gamers spent 3 billion hours playing Roblox, twice as much time as in February.

Roblox is big business: It surpassed $2 billion in lifetime revenue just from mobile players last week. That’s why Roblox earlier this month filed confidentially with the Securities and Exchange Commission to go public. The company declined to say when it would debut detailed financial information, but it was recently valued at $4 billion this year, according to the Wall Street Journal. The company declined interviews, citing a quiet period before the initial public offering.

Roblox is essentially a digital sandbox where kids can build their own games – anything from a simulation of running a virtual restaurant to adopting a pet. The entire platform is made up of user-generated games, many of them created by children and teens who have made millions of dollars through the platform.

Since its release in 2006, it has amassed millions of players who socialize and let their imaginations run wild. They play games such as digital hide and seek together and even kid-friendly horror games. Schools, camps, Girl Scout troops and many other organizations use Roblox to teach kids coding. And it has become a quasi-social-network for children.

Katie Salen Tekinba?, a game design professor at the University of California, Irvine, estimates that the virtual camp nonprofit Connected Camps she co-founded, which teaches kids how to build Roblox games, saw attendance jump to 10,000 over the summer, while previous years typically saw 2,000 attendees.

“I think it does begin to open up pathways for young people, particularly into the tech sector, which is hard to get into,” said Tekinba?.

Getting Paid

For the platform’s most successful developers, Roblox is more than just fun: It’s a paying job. The Roblox platform offers tools and tutorials for young developers to customize and create their own titles that can easily be monetized. They can sell in-game items like virtual clothes or pets for real money.

The company recently announced its developers were on track to earn over $250 million this year.

“I do this because I enjoy it. The fact that I get paid just means I don’t have to get a job,” said CJ Oyer, a 22-year-old Roblox game developer and game design student in Indiana, in a video shared with CNN Business.

Oyer began playing Roblox as a 10-year old and made his first game in 2008. He has now earned six figures developing a series of games, played tens of millions of times, where people can roleplay as their own superheroes.

With his excess earnings, Oyer turned to charity work, giving out an estimated 40 loans to help people pay for college.

“What makes it fascinating is that it’s relatively untapped as a target market for a lot of professionals, which is surprising because it’s a cash-generating machine from top to bottom,” said Alisha Karabinus, an assistant professor and games researcher at Grand Valley State University in Michigan.

Roblox games are relatively easier to make compared to developing and producing games on rival engines like Unity, whose stock has risen to over $97 after launching last month at $68, and Epic Games’ Unreal Engine. Epic, a private company, is valued at $17.3 billion, while Unity, which was valued at $6 billion last year, more than doubled its valuation to over $20 billion after it went public.

Challenges

Unlike many other video games, Roblox is primarily aimed at children under the age of 13. Roblox games are more bite-sized than the titles for PlayStation and Xbox and more focused on multiplayer interactions. That opens up the platform to a myriad of responsibilities, including offering strong parental controls and educating parents on how to use them.

Roblox has come up in the headlines when kids spend too much money without parental permission and when predators target children using the platform. And because it’s made up of user-generated content that may include popular franchises like Pokémon, Roblox can often be the target of copyright complaints from other companies.

The platform has also been hacked multiple times, and because it adheres to child-privacy rules, it is limited in how much user data it can collect to track those hackers down. All those issues could challenge and potentially hurt Roblox’s business if not addressed.

Roblox said in an August blog post that it has a team of 1,600 moderators who monitor the platform for inappropriate content and conduct safety reviews of all images, audio and video files using humans and machine scanning.

Karabinus, the professor, has discussed with her own children, who are 7 and 12, that while they can play on Roblox with friends of friends and in groups, they cannot play with strangers. And she doesn’t allow them to spend real money, although she said she knows other parents who give their children allowance in Robux, Roblox’s in-game currency.

“You can have a very safe experience if you’re aware of things and careful,” said Karabinus, who talks to her children about how to recognize scams.

Roblox said it works with parents to refund purchases if their child buys anything without consent.