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Roblox is aiming at $10 million annual revenue for its top creators

User-generated online gaming platform already pays out $140,000 a month to most popular devs, says CEO Dave Baszucki

The last two years have been a prosperous time for Roblox, and to an extent rarely seen in the games industry.

Back in September 2015, the Roblox Corporation was preparing to launch its user-generated online gaming platform for Xbox One, another step in its broad strategy to reach as many platforms as possible. Today, Roblox is available on mobile, console, PC and in virtual reality, attracting more than 48 million active players every month, and surpassing 1 million concurrent users at peak times.

To put that in context, Minecraft only passed 40 million monthly active players in June 2016; at last count, in February this year, it had reached 55 million. Roblox isn't there yet but, speaking to CEO Dave Baszucki, it's clear that he sees the potential in Roblox to match - if not surpass - Mojang's game as a cultural phenomenon.

"We always felt that we need to get our top creators over the $10 million a year mark"

Indeed, the very term 'game' is a little too narrow to describe what Roblox has become in the 13 years since the California-based company was founded. If the company can deliver on its vision, Baszucki tells me, Roblox will be "much bigger than gaming."

Instead, Roblox is part of an emerging category, made possible by online connectivity, that centres on what Baszucki describes as "human co-experience." The category's roots can be traced back to early multiplayer games, he says, be it also includes more free-form experiences like There.com and Second Life.

"We believe the category is powered by user-generated content," he continues, mentioning YouTube as another example of a social platform powered by the sharing of user-generated content. "We believe that part of social experience is gaming. But part of it is hanging out with friends, part of it is creating with friends, learning with friends, even competing with friends."

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However, while Baszucki sees Roblox and Minecraft as occupants of the same emerging product category, Mojang doesn't feature in a discussion of the companies he wants to emulate. In media, he says, the strong brand and cross-generational appeal of Pixar is an inspiration. In toys, the shared social experiences fostered by Lego is similar to how own vision for Roblox. These are lofty aspirations, of course, but the $92 million in funding it raised in March this year - despite already being in profit - will allow the company to "aggressively expand the infrastructure that powers Roblox around the world."

"It also puts a healthy amount of cash on our balance sheet for opportunities that might arise," Baszucki adds. "The acqui-hire of a small company, for example."

"We believe that part of social experience is gaming. But part of it is creating with friends, learning with friends, even competing with friends"

However, while the Roblox platform empowers its users to be creative in a similar way to Minecraft or Lego, one difference among many stands out. With Roblox, creators are able to monetise their talent, and earn money from the content and characters they add to the world. According to Baszucki, most developers earning revenue from the platform are between 13 and 30 years old.

"They're making significant revenue," he says of the youngest Roblox creators. "They fund trips to our developer conference, and bring their parents along."

Even back in September 2015, when we last spoke to Roblox, the money paid out to users was far from trivial: $100,000 a year for the most popular creators. Now, though, much like the explosion in players, the revenue earned by the Roblox community is enough to sustain "professional development studios." In 2017, Baszucki says, the best developers will surpass $1 million in annual revenue, "cashing out at about $140,000 a month."

Baszucki expects that to continue increasing, with Roblox actively seeking out commercial opportunities for its creators. Work at a Pizza Place, for example, is one of the most popular experiences on the entire platform, having been visited more than 400 million times. It now has a line of physical toys based on its characters, and Baszucki "can see us doing that in other industries besides toys."

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"From a vision standpoint we saw it as being that big," he continues. "We never computed the numbers, but we always felt that we need to get our top creators over the $10 million a year mark. This is great progress towards that level, at which top creators become vibrant studios working on the Roblox platform."

"Roblox in VR is much more engaging and immersive than on any other platform"

With plenty of money to further its growth in the near term, Roblox has also earned the luxury of thinking even further ahead: to the consumer VR market that might one day become the most compelling environment for its users. According to Baszucki, the fact that every platform links Roblox users to the same virtual space means that it already offers the "largest social VR experience in the world right now."

However, the seamless multi-platform experience that has helped expand the Roblox audience up to this point also gives it an advantage when waiting for the VR market to grow. Where other social VR experiences might suffer or even collapse due to the small addressable market, Roblox doesn't need the revenue from VR to justify staying in the space until it reaches its potential.

"Roblox in VR is much more engaging and immersive than on any other platform, so we're very bullish on it long-term," Baszucki says, adding that the platform has the potential to be "the most immersive experience for human togetherness online.

"Roblox is really a VR platform, even when used without a VR headset, in that we're running cloud-based, physically simulated, avatar worlds that dynamically stream to various devices. We feel that's ultimately the way that VR for user generated content will work.

"It just so happens that most of our users don't use a VR headset right now."

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