Roblox has seen rapid growth during the pandemic
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Released in 2006, Roblox has risen from obscurity to gaming giant. culminating in a multi-billion dollar public offering in 2021 — and controversy over the child-based monetization model. Here's what you need to know about the game.
Roblox is a video game and creative platform available on most mobile devices, consoles, and PCs. Players can choose from experiences created by the developers and can use in-app purchases to obtain in-game content and other perks.
Thanks to the platform's cute design and the freedoms it provides to players, Roblox has become a standout hit among kids. The pandemic only accelerated its growth as adults sought alternative sources of income to grow and children were stuck at home playing games. These forces came together to create the giant that is Roblox today.
What makes Roblox unique is its proprietary development platform. Instead of allowing players to create levels within the game, creators should use a separate authoring tool on Mac or PC. Once you submit content to Roblox, it can be monetized in a variety of ways.
Another gaming company, Media Molecule, is known for pioneering player creation in the Little Big Planet series, but the creators were unable to monetize the content. Roblox has a similar approach, but the experience can only be created in the development software, not in the game itself. Roblox also lacks a central storyline for players and focuses on experiences created by the developers.
Roblox: The Video Game
Roblox is not a traditional video game — it is a platform that hosts experiences created by developers using a custom game engine. When players open Roblox, they are greeted with a page of “experiences,” or mini-games that you can play.
Roblox platform developers can create experiences and charge money for content
The game has attracted young children due to its popularity on YouTube. Influencers targeting younger audiences have found that the colorful and fun nature of many mini-games in Roblox will attract viewers. This is leading to influencers hiring development teams to create mini-games and content that can be monetized.
Once a viewer sees a game on YouTube, they are usually prompted to download the game via a pop-up ad. The excitement of playing something they've seen someone else play and the cute nature of the game will quickly win over many children.
This simple cycle of using social media to promote specific mini-games and content has proven to be very profitable for the platform. So profitable that Epic Games has begun offering in-game experiences in Fortnite sponsored by companies like Disney.
What is Robux?
Roblox makes money and pays developers using its in-app currency purchasing system. The currency used in Roblox is called Robux. Many games and apps use this form of in-app purchase to give users currency that they can spend in bulk without having to check actual payments each time.
The problem with in-app purchases on Roblox is that it has multiple layers. You will need Robux currency to purchase items and accessories in the game, but you can also exchange Robux for other in-game currency.
This means that by playing a mini-game, you can earn “bucks” by completing challenges, just like in any other video game. If a user wants to buy special content or more “bucks” in a mini-game like “Adopt Me”, they will have to spend Robux to do so.
The Robux exchange rate is simple — divide by 100 to get the equivalent dollar amount. While this math is simple for adults, it confuses the value of items for children.
There is a monthly subscription that adds 450 Robux every month for $4.99. There are more cost-effective ways to get Robux, such as buying them directly from the website or getting gift cards from Amazon.
What is the Roblox Marketplace
Roblox Marketplace , formerly called a catalog, is a place where any item, accessory or customization option available to the user is sold. In the avatar menu, the catalog consists of things such as hair, clothes or faces. There may be in-game sales systems created by the developer, or an isolated catalog of items created specifically for certain mini-games.
This is the default screen in the avatar builder that displays obscenely priced content
Developers using proprietary development software on Mac or Windows can customize and upload items that can be sold for Robux. Roblox players cannot create levels or content in the game, but can buy and resell items on the marketplace if they are listed as restricted items.
Players and children may not realize this difference or understand the value of the item. Parents should be aware of the in-app purchase system and ensure that purchases cannot be made without a password. Children left unsupervised on Roblox can quickly spend thousands of dollars that cannot be refunded.
How to exchange Robux for real money
Roblox Premium Subscribers can convert Robux into real money when certain conditions are met.
- Have a valid account on the DevEx portal.
- Have at least 30,000 Robux earned on this account.
- Have a verified email address .
- Be 13 years of age or older
Once a participant meets the requirements, they can apply to participate in the Developer Exchange Program. Once approved, the account holder can request a Robux withdrawal once a month at the current market exchange rate.
This means that the developer or player must earn at least $105 by selling items in the catalog or through mini-games before being able to cash out. Players looking to make quick money upload a simple emoji and charge hundreds of dollars to use it. It is unknown how effective this method is, but parents should warn children about scams.
Moderation and control
Since Roblox is heavily used by children, it has several systems to keep things safe. For example, the avatar creation tool prevents you from sending obscene items or wearing inappropriate clothing.
Such systems are fully automated and not ideal – — so players will have to report anything that slips through the cracks. For example, reports of “fascist playgrounds” and “virtual strip clubs” suggest that Roblox doesn't always grasp or understand what should and shouldn't be allowed.
Combining online chat and in-app purchases can be a worrying experience for any parent.
When viewing another player's profile, a “Report a Problem” button will appear. This allows parents or players to report any strange behavior, inappropriate messages or other issues.
The game features live chats in a mini-game and private chats between players. There are filters to prevent the sharing of sensitive content, such as phone numbers, and obscene language is prohibited. However, there is nothing stopping players from sharing usernames with other chat apps or meeting on Discord.
There have been reports of child predators taking advantage of this, for example by getting young players interested in the new world they are developing. As soon as the child transfers the conversation to a third-party chat client, all protection disappears.
Roblox reportedly does little to protect users other than banning the offending account, but the offender can easily create a new account and continue the abuse. The ban also does not interfere with monetization, since the attacker can transfer his developed games to other players before the inevitable ban. Therefore, there are no consequences for offensive behavior.
Parents can restrict access to certain parts of the game using security settings. In-game chat can be disabled, and parents can hide other profile information from here.
Outside the game lies a completely different world, inhabited by the developers themselves. These developers can be anyone over the age of 13, and they typically take up spaces outside of Roblox to communicate and coordinate, often on Discord.
If your child decides to develop for Roblox to try to make money, they may be recruited by a small team. These teams are often run by other children or young people, and Roblox is not responsible for what happens between these people. Parents must supervise and ensure that their child is treated fairly and paid appropriately — if it's about money.
Roblox: Content Platform
Time to create mini-games and content is limited for developers, becoming a developer requires very little overhead. All you need is a Mac or PC to install a free developer tool called Roblox Studio.
To monetize content on the Roblox platform, you must be over 13 years old. Designing and loading avatar elements requires a certain level of competence, and creating mini-games requires fundamental programming skills. The programming language used in Roblox Studio is called Lua 5.1.
By uploading something to the platform, even a simple shirt, you can monetize it, but you must have a premium subscription to do so. As soon as an object is sold from the catalog, the developer will receive a portion of the income in Robux.
This game has its own in-game currency that can be purchased with Robux.
Social media influencers can use the Roblox platform as there are no restrictions on it. self-promotion. The mini-game menu and start screen may contain links to YouTube or other creator accounts. This means influencers can monetize through in-app purchases and viewing sponsored ads on YouTube.
As the platform has grown, so has the size of the development studios creating the Roblox experience. In these large studios, dozens of people can work full-time on a single mini-game, and they earn enough to live on. However, Roblox does not take any responsibility for how these studios operate and pay their developers.
Since the game is designed to get kids involved in programming, this often results in teams of kids working together to try to compete with a big studio. Some reports suggest that some development teams take advantage of child developers by paying them poorly, if at all. And since Roblox doesn't regulate any of this, your child could be forced to do difficult developmental work with little to no compensation.
Roblox: company
Roblox was founded in 2004 and has undergone many changes since then. The app's popularity grows from time to time, but it consistently remains at the top of the App Store gaming charts.
According to the Roblox Corporation website as of April 1, 2024, it has 2.4 million developers, 4.4 million active events, and the payout rate has disappeared. In December 2021, there were 9.5 million developers on one page, 24 million experiences, and $761 million paid out to community developers.
The platform is available in 180 countries in 11 different languages. Roblox claims to have 32 million average daily active users.
The vertical integration of development, monetization and social media influence has made Roblox a multi-billion dollar company. The company went public on March 10, 2021, with a net worth of $45 billion.
Investors hope Roblox can continue to grow
The impressive IPO and share price surge were short-lived as the company suffered a peak setback in early 2022. Today, RBLX's stock price is $37.84 per share and its market capitalization is $23.9 billion — almost half of IPOs.
Children are fickle and can move on to the next popular activity without warning. Additionally, the pandemic bubble burst, leaving many companies like Roblox much smaller than they were.
However, while children are interested, parents need to pay attention to the game. Set up parental controls in iOS to block in-app purchases, disable in-game chat, and make sure the games your child is interested in aren't generic or filled with abusive players.
If your child is interested in developing a Roblox experience, discuss the issues with child labor, ways to generate income, and what their goals are before they start. Be sure to contact them and keep an eye on who they are working with and whether there is real money involved.
Reports indicate that players and developers tend to remain silent about issues due to internal politics. If a user is labeled a “snitch” or their reputation is tarnished, they may never be able to join or create a team on their own in the future.
Payment Controversy
In August 2021, Roblox came under criticism for the way it treated developers who created experience for the game. In a lengthy investigation published on YouTube on August 19 by People Make games, Roblox is accused of exploiting the system's developers.
Although Roblox offers developers the opportunity to earn income, similar to the Apple App Store, the situation is much more complicated for those who create Roblox applications and expect to receive payment.
Part of the problem is that Roblox focuses payouts on Robux, the in-game currency, rather than cash. This results in developers being able to immediately spend their earnings within Roblox itself, so earnings never leave the platform.
Users earn very little by cashing out Robux
This concept can be compared to corporate certificates that were used by mining firms in the 19th century, where mine operators provide certificates to employees , which can be paid in the company’s store, and not in currency. Workers will be warned about any potential currency exchanges, as exchange fees take away some of the cost, leaving them free to buy goods from the company itself.
Along with in-game items, currency can also be used to pay for advertising in the game. Again, this service is operated by Roblox itself.
In terms of what Roblox pays out, developers only earn 28.9% of the Robux value per transaction, with the company keeping 48.9% and app stores receiving a 22.3% commission. In contrast, Apple charges developers no more than a 30% commission, as does Steam, Microsoft's Xbox platform and Sony's PlayStation, while Epic and Microsoft Windows game sales include a 12% commission.
The Roblox developers' own pages mention a large number of individual fees that are charged as a cost of transaction and operation of the platform. This includes a 22.3% reduction in app stores such as Apple's own.
The black market exists to avoid paying Roblox fees
Of course, the small amount of money received from completing transactions and exchanging Robux on Roblox itself led to the formation of black markets. Players, often children, are directed to illegal websites that exist outside of Roblox's purview. Here you can put up expensive items for sale much cheaper, thanks to the absence of commissions.
Users can also use the black market to exchange Robux for cash or other items, again avoiding the requirements set by the company. These black markets were reported to have operated without intervention for years. Presumably, this is because Roblox's economy relies heavily on these backroom deals.
Even though Roblox has been notified of such illegal transactions, the only action the company is allegedly taking is to block offending users. People Make Games reached out to the company for comment and did not receive a direct response to their questions.
It's unclear how long Roblox will remain popular with companies like Epic copying its business model. However, this is not an ideal environment for the children it is aimed at.
Updated December 15, 2021using information from the follow-up People Make Games video.
Updated April 1, 2024with updated information on stock valuations, Roblox commission percentages, and other small changes.
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