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  • (upbeat music)

  • - A lot of the work you do is with blocks.

  • It's the core shape of the platform.

  • - [Narrator] Samuel Jordan has been making video games

  • since he was 15 years old.

  • - I've gone from making clothing stores

  • to 3D cafes and food restaurants

  • to now full-fledged games.

  • - [Narrator] He's made all of these

  • on a free online gaming platform called Roblox,

  • which is available on Desktop, mobile devices

  • and Xbox consoles.

  • Last year, at the age of 21,

  • Jordan earned more than $600,000.

  • - Not yet.

  • - [Narrator] He's among the seven million Roblox developers

  • who've built the company a library

  • of over 20 million games and experiences.

  • And this has attracted about 33 million daily users

  • and more than half of them are under the age of 13.

  • The pandemic fueled this model

  • and Roblox became a place

  • where kids at home could hang out.

  • This has made it one of the valuable video game companies

  • in the world.

  • And its first day of trading in March,

  • saw a market valuation of $45 billion.

  • But as new games are created every day,

  • the company faces the challenge

  • of moderating its platform.

  • And its business model rides

  • on whether Roblox can remain a safe place for kids.

  • - My daughter's obsessed with Roblox.

  • I know this platform way too well.

  • She loves "Royale High."

  • - [Narrator] Sarah Needleman covers the video game industry

  • for The Wall Street Journal

  • and she's been spending a lot of time on Roblox

  • with her daughter.

  • - Got this yesterday.

  • - [Narrator] An even owns a copy

  • of "The Ultimate Guide to Roblox."

  • - All of the games on the platform

  • have been made by users.

  • Some are just individuals like you and I

  • but the company itself doesn't make the games

  • that are on the platform.

  • - [Narrator] This means Roblox doesn't have to rely

  • on Hollywood-like budgets

  • and rockstar talent to produce blockbuster titles.

  • For example, one of last year's most anticipated video games

  • was "Cyberpunk 2077,"

  • a game that cost Polish company CD Projekt

  • more than $300 million

  • to develop and market.

  • Just compare that with Roblox,

  • which provides a free developer toolkit

  • for anyone interested in creating content for it.

  • - Luckily, Roblox has a lot of these pre-made for us,

  • so we're just gonna go into our toolbox and find one.

  • - You don't have to be an expert in coding

  • to make games for Roblox.

  • There are step-by-step resources

  • and a lot of it's drag and drop.

  • Somewhat turnkey you could say.

  • So that has made it very attractive to younger folks

  • who are just learning how to do this stuff.

  • - [Narrator] Roblox says

  • it's continually updating the toolkit.

  • This helps developers make engaging content

  • so its players don't get bored.

  • - They can make higher-equality games

  • and the kind of games that adults

  • would appreciate more so than youngsters.

  • They're more complicated, they're more challenging.

  • - [Narrator] This creates an ecosystem

  • of players and developers.

  • Just look at Samuel Jordan.

  • - It felt just really inspiring

  • to think wow, at a young age, I can make something.

  • - [Narrator] He first started playing in 2011

  • and four years later,

  • he began creating his own worlds, like Fairytale.

  • - Yay, a new friend.

  • - [Narrator] Today he's building complex games

  • for young children

  • and even took a break from college

  • during the pandemic to focus on Roblox

  • with his friends.

  • Jordan was also hand picked by the company

  • when he was 19 years old

  • to help expand the toolkit.

  • - They've also increased the amount

  • of textures you can add in game

  • and it's really helped to really build an atmosphere

  • for your games.

  • - [Narrator] Games are free to play on Roblox.

  • So Jordan only starts to earn money

  • when a player spends the in-game currency called Robux.

  • - [Samuel] Earning money on Roblox

  • is actually a pretty easy process.

  • People will pay you with Robux

  • and you can exchange those out for dollars

  • or your local currency.

  • - [Narrator] So players can link their accounts

  • to credit cards and for young children,

  • they can use prepaid gift cards.

  • With Robux, they can buy this Prince jacket

  • or pay for a pass to visit the Dream Mansion.

  • (pensive music)

  • Jordan also makes money from collaborations with brands,

  • turning real-world products

  • into Roblox items

  • but he doesn't get to keep all the money.

  • Developers receive 70%

  • of the Robux spent in their games

  • and get 30% of the Robux spent

  • on items they put up for sale.

  • Roblox says the rest goes to running the business,

  • including hosting services and operations.

  • As players flocked to Roblox during the pandemic,

  • the company said its revenue last year grew 82%,

  • while sales of virtual items more than doubled

  • to about $2 billion.

  • But user loyalty hasn't translated into profits.

  • The company has incurred net losses

  • since its inception in 2004.

  • And last year, those losses exceeded $250 million,

  • in part because of higher operating costs.

  • But profitability isn't the only challenge.

  • There's been an increasing amount

  • of adult content on some games.

  • - All the sort of bad actors you see on social media,

  • you would have to assume could happen on a site like Roblox.

  • The only difference is that Roblox happens

  • to appeal to a very young audience.

  • Probably youngsters are more sort

  • to bad actors than adults maybe

  • and so it raises the bar in terms of moderation.

  • - [Narrator] Roblox said it hired

  • more than 2,300 content moderators

  • while inappropriate words are replaced with hashtags.

  • The company also said it's now developing

  • content ratings for games

  • and making parental controls easier to find and use.

  • (upbeat music)

  • But as countries emerge from the pandemic,

  • Roblox hopes the habits of using the platform

  • aren't easy to break.

  • Even Jordan says he'll continue to create.

  • - I don't think I'm gonna be chasing to keep people on

  • past the pandemic.

  • I'm gonna continue to make content

  • I think players will enjoy

  • and the ones that stay long

  • are gonna be there 'cause they enjoy the time they spend.

  • (lively music)

(upbeat music)

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How Roblox Became a $45 Billion Public Videogame Company | WSJ

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    joey joey posted on 2021/05/30
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