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Roblox Earnings: Takeaways
The platform continues its consistent growth and reaching an all time high 70 million Daily Active Users.
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Roblox reported earnings for Q3.2023 and the results are excellent.
With many people including the media this year questioning the emergence of the metaverse or the evolution of the Internet from 2D to 3D, the performance and growth of Roblox is a signal of things to come. The platform rises above the noise and continues to show consistent growth. I wanted to share a few takeaways looking at its business results and assess what they could mean for Roblox’s long term potential, looking at it from the lens of a developer on the platform.
(1) Key Results for Third Quarter 2023
Revenue: $713.2 million, up 38% year-over-year
Bookings: $839.5 million, up 20% year-over-year
Average Daily Active Users (“DAUs”) were 70.2 million, up 20% year-over-year
Hours engaged were 16.0 billion, up 20% year-over-year.
Average bookings per DAU was $11.96, flat year-over-year.
“Our strong third quarter results reflect our continued platform innovation and growth across all age groups and geographies. We are executing against our key priorities to enable deeper forms of immersion, communication and Avatar expression on the platform, while investing in artificial intelligence, brands and advertising, to drive future growth,” said David Baszucki, founder and CEO of Roblox.
The results show topline growth particularly strong in western Europe and east Asia. The US and Canada still contributed the most to bookings growth among all regions.
Content & Experiences
Daily Active Users
Let’s assess Roblox’s results through lens of these five pillars.
1) Developer Ecosystem
Over the past 10 years Roblox has nurtured a community of millions of developers and creators who built millions of games and experiences now used by millions of users globally. Ensuring that developers on the platform, small and large, can monetize and build a business that stands on its own is, and should be, a key priority for Roblox the company. In third quarter 2023 developers earned $170.7 million, an increase of 13% from the $151.5 million earned in third quarter 2022. Generating revenue is not the only thing that keeps developers loyal to the platform - they also make friends and many of them grew up as players on Roblox and gradually becoming builders. I continue to consistently argue that the passion and dedication of developers to the Roblox platform is one of the platform’s most important competitive advantages.
2) Content & Experiences
The diversity of content on the platform means that any of Roblox’s millions of daily users can find something that they are excited to play and invite their friends to play with them. The low friction of accessing content through one master app and the enormous library of content that’s available to users at any given moment continues to be a key pillar of Roblox’s flywheel.
The hours engaged KPI is a key parameter which shows the outcome of Roblox’s content flywheel but it’s the fact that Roblox has millions of loyal developers in the first place that are creating the massive content library which is at the core of that flywheel. As long as Roblox continues to have a committed community of developers, we will continue to see more and more content created and more and more hours of engagement.
Hours Engaged in third quarter 2023 was 16 billion, up from 13.4 billion in third quarter 2022.
Roblox also continues to push its technology forward and enable developers to create ever more impressive and expansive worlds for users to engage with, and earlier this year it made several key announcements:
Roblox Connect (launching later this year) – a new way for friends to call each other on Roblox as their avatars—together in a shared experience. Leveraging voice chat, facial animation, and the ability to attach a real name to friends’ usernames, Connect will enable people to call each other in a natural way—conveying nuance with their own body language, voice and name—and be transported to a shared immersive space for their conversation, sitting together by a campfire or standing beside a waterfall, for example. Roblox will open source Roblox Connect, providing creators the opportunity to develop new communications experiences and add additional connection options to existing experiences.
Roblox launched on PlayStation and Meta Quest.
Assistant (available later this year) - a conversational AI that makes creation on Roblox more accessible and empowers advanced creators to build richer, more engaging experiences faster. Working with Assistant will be collaborative and iterative, so creators can provide feedback and Assistant will work to provide the best solution. This new generation of AI-powered tools will amplify the ability of all creators to bring their ideas to life. You can read more about their Generative AI vision, here.
Subscriptions within Experiences (launched): a way for creators to offer subscriptions within their experiences and the freedom to choose which features or offerings they make available as a subscription model. You can read more about their Economy vision, here.
Expanding 3D creation on Roblox (launched) - as a step toward making it possible for anyone on Roblox to participate in our economy, Roblox is going to allow anyone that is ID-verified and has Premium account to create 3D items for the Marketplace. You can read more about their Marketplace vision, here.
Creator Marketplace Fees (launching next year) - Roblox plans to update their Creator Marketplace fees to enable asset and tool creators to keep 100 percent of the net proceeds from the sale of their items in Studio or Creator Hub—excluding tax and payment processing fees. Also coming next year is the ability for developers to sell models in addition to plugins, and a change to buy and sell assets in U.S. dollars instead of Robux, thus eliminating any Roblox platform fees.
3) Aged-Up Users
One of the key strategic pillars for Roblox’s growth, in driving the growth of both the number of daily users and bookings per user is the platform’s ability to retain users as they age up and acquire new age-up users (the reference is to users over age 13). In the past two years we have seen major growth of the over 13 demographic and late in 2022 was the first time that the platform had more users over 13 than users under 13.
In its recent reporting Roblox stated that the user group above 13 year-olds now stands at 57% of total users on the platform, an all-time high.
The next two years will be pivotal for Roblox in proving that it can continue to not only dominate the under 13 age group (which is its core audience historically) but also, and perhaps more importantly, retain them as they age up and acquire new users in the over 13 age group who may not think of Roblox as they social platform of choice. Alongside that, Roblox will need to show that as the platform ages up, developers create content that meets the expectations and desires of the aged up users and on the back of hours engaged is able to monetize that audience more effectively, both in North America and world wide. Driving growth of in bookings per daily active users (ABPDAU) will be key to ensuring that the more professional developers are not only passionate about the platform but can also build a sustainable business around their passion.
4) Daily Active Users
Everything that is happening on the Roblox platform ultimately needs to drive the growth of daily users (and bookings per user), and on that metric, Roblox continues to show consistent growth despite concerns of kids going back to school and the aftermath of the covid-related rush into screens and social platforms. Roblox is clearly not going anywhere and not only that school time doesn’t seem to interrupt usage, third quarter 2023 numbers show an all-time high DAU of 70 million! (20% year-over-year growth).
When it comes to paying users, monthly unique payers (MUPs) in 3Q2023 reached an all-time high of 14.7 million, up from 12.9 million in 3Q2022. Average bookings per monthly unique payer (ABPMUP) was $19.02 in 3Q2023, up from $18.11 in 3Q2022.
5) Geographic Breakdown
26% os users came from the US and Canada
26% came from Europe
22% came from APAC
26% came from ROW
Roblox continued to execute successfully on their international expansion strategy. In Japan, DAUs increased 66%, Hours increased 64%, and bookings increased 174% year-over-year. Roblox believes the Japanese market is starting to exhibit the same virality as other wealthy international markets.
Key Western European markets continue to grow. In Germany, for example, DAUs increased 27%, Hours increased 30%, and bookings increased 75% year-over-year.
India and Brazil are important markets as part of Roblox’s vision to reach 1 billion global DAUs. In India DAUs increased 53%, Hours increased 49%, and bookings increased 76% year-over-year. In Brazil, DAUs increased 23%, Hours increased 23%, and bookings increased 62% year-over-year.
I expect this trend to continue although it’s important that Roblox (1) maintains strong monetization of North American users (who likely account for more than 50% of bookings) while (2) increasing bookings per user from international markets, which is not a simple thing considering that of the top 10 most engaged countries on Roblox, 5 of them are developing economies (Brazil, Philippines, Mexico, Russia, Thailand).
The future of the Roblox platform is not without challenges but the consistent growth it’s showing across some of the most important indicators show that Roblox’s brightest days as a platform are still be ahead. With the integration of more advanced technologies which in turn will enable developers to create ever more engaging games, experiences and virtual worlds can ensure that Roblox remains the most important destination on the Internet for kids and youth and potentially for many more young adults around the world.
As a builder on the platform, I’m going to continue and keep a close look at the growth of Roblox’s developer ecosystem (numbers and developer payouts), the growth and stickiness of its user base (both under 13 and over 13), its global footprint and how effectively Roblox monetizes outside North America, the quality of content launched on the platform, and releasing new features and technologies for creators.
Yon is the founder of CEO of Supersocial, an innovator and leading developer, publisher and technology company focused on virtual worlds. Thank you for subscribing to Into The Metaverse. We grow when readers who appreciate our work spread the word.