New World Notes

Roblox's Odd Blocky Avatars Are A Key to the Platform's Success: Excerpt, Making a Metaverse That Matters

Pictured: Intrance and LAGurlz, creators of the hit Roblox experience Starving Artist

As Roblox reaches upwards of 300 million monthly active users and continues expanding its feature set, one common reaction is basically: Wait, isn't that just a game platform for kids with blocky, LEGO-like avatars?

Yes... and very much no. As I explain in Making a Metaverse That Matters, Roblox has succeeded not in spite, but in good part because, of those avatars:

Roblox Leaping the Metaverse Age Cliff With VOIP Calling, PlayStation Expansion, Dating Experiences and (Sigh) Generative AI

If you missed the recent whirlwind of Roblox announcements, they read like the company's concerted attempt to the cross (in a single leap!) the Metaverse Age Cliff, that point in the lifecycle of a platform where usage tends to drop sharply as the user base reaches adulthood:

• Coming later this year in early release, Roblox Connect is an avatar-to-avatar voice chat system. Most metaverse platforms already have some variation of this, but seeing as Roblox has 300 million monthly active users -- i.e. nearly the size of the entire US population --  this feature will create a calling network large enough to compete with traditional phone carriers.
• Roblox is coming to PlayStation 4/5 next month, connecting it to an install base of over 150 million households, primarily comprised of core gamers in their 20s and 30s.
• The company also unveiled a generative AI assistant (video below) to create 3D content.
• Roblox CEO David Baszucki is again promising "dating experiences" coming to adult-age users in the next 5 years, where "thousands"  of people will start real life relationships. This is basically re-branding an existing phenomena for a mass market/Wall Street audience -- thousands of people already do that in virtual worlds every day.  Indeed, the 20-something developer couple I profiled in the book first met in Roblox. (More on them later.)

Pictured: Frontlines, recent user-created Roblox experience ideal for PlayStation crowd

This is on top of the recent Meta Quest integration and the little covered news (from a reputable data gathering source) that Roblox has amassed 300 million monthly active users. If the PlayStation launch is successful, the company will have a near-unbeatable lead among metaverse platforms.

As for the generative AI, I'm still a bit skeptical that it will be more than a brief novelty -- but it will take a platform of Roblox's size to determine that. Watch below:

Roblox Stock Performance Misses Metaverse Platform's Population Has Grown to 300 MILLION MAU

You probably saw today's downbeat reports of Roblox's stock after the company announced its last quarter earnings:

Shares of Roblox closed down more than 21% Wednesday after the company reported second-quarter results that missed analysts’ expectations on top and bottom lines.

The revenue figure is what Roblox calls bookings, a category that includes sales recognized during the quarter and deferred revenue. Bookings rose by 22% year over year. Roblox reported $639.9 million in bookings in the year-ago quarter. The company generates revenue from sales of its virtual currency called Robux, which players use to dress up their avatars and buy other premium in-game features.

This despite the fact that Roblox also reported [.pdf link] strong user growth:  "Average Daily Active Users (“DAUs”) were 65.5 million, up 25% year-over-year.  Average monthly unique payers were 13.5 million, up 19% year-over-year."

Roblox the company doesn't report monthly active users -- probably because its MAU can fluctuate wildly from month to month, based on the free time of its core user base of kids and teens.

That's unfortunate from a market perception point of view, because last December, Roblox was estimated to have 250 million MAU. And recently (this June), a leading Roblox analyst service RTrack reported that Roblox MAU had since grown to over 300 million:

Roblox on Quest Feels Like a Buggy Rush Job (Comment of the Week)

Commenting on Meta putting the new Quest/Roblox integration as a key to its metaverse strategy, VR expert "SkarredGhost" believes it was a rush job:

Yeah, it's clear that Meta is betting a lot on Roblox. I tried today Roblox on Quest and it is so full of visible bugs that it is clear that it has been rushed out to release it for business reasons (Zuck being able to talk about it to investors). 

In fact Mr. Ghost has a whole blog post and YouTube walkthrough (watch above) on the topic, which is important, because the current version is not officially discoverable -- but has already been played by quite a lot of Quest owners:

Meta Quest Coming to Roblox -- Niche Add-On... That'll Also Provoke More Provoke Scrutiny to Both Platforms

Nice upcoming integration for Roblox users who also happen to own a Meta Quest:

Roblox, one of the largest 3D immersive platforms, will soon be available on Meta Quest, the leading VR headset. Roblox on Meta Quest is available for any user 13 and older.

This opens up another opportunity for developers to create and share their experiences with millions of people instantly on Meta Quest. Roblox developers will be able to bring their existing experiences to Meta Quest or create unique new experiences with VR in mind.

This is a great opportunity for VR developers, inviting them to port their experiences to a much larger audience. (And Roblox already boasts a number of high quality immersive games like Tunneler and Frontlines.)

However, with Quest 2 sales already plateauing at around 20 million, I doubt Roblox will grow the market for the VR headset any further. In fact, Quest usage is already dominated by competing metaverse platforms Rec Room and VRChat -- which also suggests that we probably won't see many Quest users becoming dedicated Roblox users, or vice versa. (Metaverse platforms tend to engender fierce community loyalty, beyond occasional tourist visits to other platforms.)

But both Meta and Roblox corporate heads should also expect more public/political scrutiny coming their way. Top Senators recently enjoined Meta to prohibit its own metaverse platform to teen children:

 

Backstory on Frontlines: Roblox's Viral, AAA-Quality FPS Not a Huge Hit (Yet)

Above: Frontlines' Daily Active User rate via RoMonitor Stats

Last week I described Frontlines, a Roblox game experience with newly updated AAA-level graphics and gameplay, as an amazing breakthrough in metaverse platform technology; I even said it showed how Roblox could be a competitor against Steam itself. That's still true, but here's a somewhat important qualifier to that:

Frontlines doesn't seem to be making much money, and it's definitely not a hit by Roblox standards. Not yet, at least.

According to RoMonitor stats, Frontlines is regularly attracting Daily Active Users in the mid-six figures, with concurrency levels in the low-to-mid four figures. If we're comparing it to a Steam game, that's quite good! Easily placing it among the Top 200 most popular games on Steam out of thousands of available titles.

By Roblox standards, however, Frontlines is not a huge hit; on Roblox, the top games have concurrency levels in the mid-five figures to the mid-six figures. Brookhaven, a mini-MMO that's usually the #1 Roblox experience, has DAU rates between 30-60 million.

Frontlines' monetization rates have not yet been officially reported, but the developer is selling IAPs -- mostly weapon expansions, ranging from 50 cents to $5.00.

But how many players are actually buying those?

I talked on background with a Roblox creator who's behind some of the top experiences on the platform, and they made some rough estimates' of Frontlines' revenue:

Interview with Frontlines' Lead Creator, the Game Which Proves Roblox is a Viable Competitor to Steam -- Seriously.

A key question I tangle with in my upcoming book is what I call the Metaverse Age Cliff. It's very impressive that a metaverse platform like Roblox has 250 million+ active users, but will those users go away when they're no longer impressionable pre-teens and teens, in search of platforms with better graphics and functionality?

Frontlines, a new game experience on Roblox, is a pretty impressive answer to that question. Watch:

Yes, this is on Roblox. I played it last night. It's on par in terms of graphics quality and gameplay with just about any FPS on Steam. And it was made on Roblox. Play here.

"Took millions of iterations and over 4-5 years of work to get it to where it is right now," lead developer Clarence Maximillian tells me. But he and his team did so through a "combination of perseverance, focus, and obsession."

But why do this on Roblox, when a game like this is usually published to Steam?

"It’s mainly about reach. You can get your game in the hands of millions of people with 0 marketing. This especially great for developers who may not have the largest resources and need a place to start. And for those who have resources, it’s also a cost effective way to get your game out there."

Maximillian tells me he created Frontlines with a 5 person team, none of who have a background in professional game development.

 

"We have one guy doing maps, one guy doing audio, one guy programming, one guy making all 3D content and renders, and one guy making the whole vision come to life." (That would be him.)

Alongside Tunneler, the Roblox experience inspired by the Portal games, Frontlines is an example of how the platform can evolve, and eventually compete directly with Steam. (Which already trails Roblox in terms of users.)

And, Maximillian tells me, it's only the beginning for he and his team:

Despite Widespread Tech Layoffs, Metaverse Platforms Currently Have 800+ Job Openings

With news that Microsoft is shutting down its VR metaverse platform AltspaceVR, along with widespread layoffs across most of the major tech companies, you might assume the Metaverse as an industry is also feeling the string.

Not so much.

On a quick tally of leading metaverse platforms in terms of active users, along with promising metaverse startups I've written about recently, I'm seeing nearly 800 current job openings at minimum. (And by the way, Microsoft and Minecraft developer Mojang still currently have 6 Minecraft-related job openings.) 

Here's links to these job openings available as of today, January 24, 2023:

Roblox, the market leader among metaverse platforms in terms of users, currently has 194 job openings.

Epic Games, developer of Fortnite/Fortnite Creative, currently has 368 job openings.

Rec Room, the most popular metaverse platform among Quest 2 users, currently has 45 job openings.

VRChat, the best next gen metaverse platform, currently has 19 job openings.

Naver Z, developer of mobile metaverse platform Zepeto, currently has 14 job openings.

Lockwood Publishing, the game studio behind Avakin Life, currently has 7 job openings.

Garena, the creator of Freefire, a Fortnite-like metaverse platform that's huge in Asia/South America, currently has 54 job openings.

There's also at least 150 job openings in promising startups featured by New World Notes, including:

Roblox Launches Creator Hub This Week, Rumored Quest Support This Year

First the news, then my commentary:

On the Creator Hub:

Roblox is officially completing its rollout of the Creator Hub, a new hub that gives developers more tools and centralizes things like documentation and a developer forum into one place. Making the information easier to find seems like it could be quite helpful for developers, and that has an important aftereffect for Roblox, too: Roblox makes its money by taking a cut of what its developers earn, so it’s incentivized to make things better for the creators on its platform.

Intrance, co-creator of the popular Roblox game "Starving Artist" (more on that soon) is impressed so far: "I'd say the most noticeable improvements are the faster loading times and user interface. The addition of verified users helped with filtering out lower quality assets. They've also implemented lots of new analytics dashboards displaying all kinds of stats including retention, engagement, and monetization."

On the rumored Quest support:

Second Life User Creators Were Paid Out $86 Million in 2021! That's Decent Growth & Compares Well To Metaverse Leader Roblox

When I blogged about J.P. Morgan investing in Linden Lab payments spinoff Tilia last week, I missed this point from Forbes columnist and longtime Metaverse expert Charlie Fink:

Tilia is easy for developers to implement, and it’s simple and convenient for their customers to use. Transactions are instant and cost pennies, some of which go into the developer’s pocket. At Second Life, those pennies amounted to $86M last year.

Emphasis mine, because wow. I checked this with company spokesman Brett Linden who clarified that this $86 million is "the amount that was paid out to creators in 2021."

Yes: Second Life's content creator community earned $86 million from their virtual content last year.

This is notable for at least a couple reasons: