INSUBCONTINENT EXCLUSIVE:
Our recently published EC-1 on Roblox recounts the origin story and growth prospects of the company
may apply not only to game developers and gaming entrepreneurs, but also to the broader startup industry.Lesson 1: UGC is a missed
opportunity in gamesRoblox has shown that user-generated content (UGC) is a missed opportunity for much of the game industry
The company aspires, in a way, to be the YouTube of games
And it is succeeding, with 50 million experiences from 2 million creators to date.The game industry generally has two problems with UGC
One is the games themselves: AAA games today are too complex, and lack the flexibility and simplicity needed for robust UGC
(Minecraft proved much the same.)The other problem is the greater complexity of making games than, say, videos or music
Roblox solved this problem by building its own game engine, which is designed solely to output Roblox-style experiences.But increasingly,
engines like Unity are capable of accomplishing similar feats: games are getting easier to build
opportunities in gaming are still comingThe game industry is infamously cyclical
New platforms emerge, become promising, then grow overcrowded and competitive
Usually, this cycle relates to hardware (the iPhone, virtual reality helmets, game consoles like the Nintendo Switch) or massive changes in
consumer behavior (the emergence of Facebook, the early growth of the internet)
Roblox reported that it paid out $30 million to game developers in 2017, doubling to $60 million in 2018
Developers receive a quarter of the revenue made from their games, with another quarter covering payment processing and another quarter
Its top 10 developers made about $3 million on average each
At some point, professional developers are likely to conclude they can do at least as well
Weight Lifting Simulator 3 are significantly smaller than comparable games on other platforms.For entrepreneurs interested in creating new
you have the patience to wait for them to mature.Lesson 3: Patience can create amazing growth cyclesIt took Roblox 15 years to grow to its
But most of that growth is recent: as seen in the chart above, Roblox experienced 10x growth in about 3 years, from 9 million users in
February 2016 to 90 million in April 2019.So what went into the decade or so during which Roblox was a much smaller platform? As we tell it
in the origin story: a great deal of work, and very little paid acquisition.In its early years, Roblox did buy users, to seed a user base
while it worked on an impossibly large vision that included a game engine, platform, social features, a creator community, and its own games
But after a few years, it stopped buying users.All of its growth since has been organic
Of course, any company can try to do the same
But with more years of work, it may eventually get there.For more on the Roblox story, see Part 1: The Origin Story, and Part 2: The
We also provided more context of the revenue breakdown of payments made on Roblox to developers.
