“Roblox is an incredible community where people are creating together,” said Roblox CEO and co-founder David Baszucki in an interview with CNN Business Wednesday. His stake in the company is now worth more than $ 4 billion.
It’s a big business – and a fast growing one.
Roblox recorded revenue of nearly $ 925 million last year, an increase of 82% over 2019. The company also said earlier this month that it now expects sales to increase by about 60% this year, to a range of US $ 1.44 billion to US $ 1.52 billion.
Roblox had 32.6 million daily active users at the end of 2020 and the company predicts it will have 34.6 million to 36.4 million by the end of 2021.
Most of the company’s players are children under the age of 13. But Baszucki said the company is approaching a point where most of its players will not be pre-teens. He said the group of 17- to 24-year-old Roblox users is growing very quickly.
But Roblox noted in his paperwork with the Securities and Exchange Commission that having such a young user base will lead to further scrutiny by the platform.
“Increased use of interactive entertainment offerings like ours by consumers, including younger consumers, can lead to stricter consumer protection laws and regulations that can impose additional burdens on companies like ours,” said Roblox.
This means that Roblox must ensure that the game remains safe for minors who play it and that privacy practices are strictly enforced. The company also has safeguards to ensure that younger users don’t spend too much to buy Robux.
Baszucki said he was excited about the stock market debut, adding that it is good for investors and long-term employees of Roblox, which was founded in 2004, to participate financially in the company’s success.
Roblox listed shares directly on the New York Stock Exchange, as opposed to issuing new shares in an initial public offering. The NYSE had established a reference price of $ 45 per share for the shares.
“For us, a direct listing seemed natural. It brings the whole community together and everyone is using the same price when opening the auction,” said Baszucki.
So, what’s next for the company now that it’s publicly traded?
Roblox is not yet profitable. It lost more than $ 253 million in 2020, compared to a loss of about $ 71 million a year earlier.
Baszucki said the company will seek to generate more sales with advertising. He stressed that it will be organic. Users, for example, can pay to wear Nike sneakers in the game instead of seeing large Air Jordan billboards on Roblox.
“The small amount of advertising that we have been doing is engaging and authentic,” Baszucki told CNN Business.
Baszucki, whose Roblox username is builderman, added that he is not too concerned that Roblox is a fad that will end up losing popularity.
He noted that the game continued to add users, even though players have other options like Minecraft, Fortnite and the increasingly popular Between Us to play during their free time.
Further debuts on the stock market are expected later this year, with Instacart, Coinbase and Robinhood among the most anticipated new listings.