BY ALEX KNAPP

Forbes - - Roblox - PHO­TO­GRAPH BY TI­MOTHY ARCHIBALD FOR FORBES

MIL­LIONS OF PRE­TEENS PLAY VIDEO GAMES ON WEBSITEROBLOX’SROBLOX’SWEBSITE. ROBLOX’S WEB­SITE. THAT’S NOT UN­USUAL FOR A SO­CIAL GAM­ING UNI­CORN. WHAT IS UN­USUAL: TEACH­ING KIDS THE RUDI­MENTS OF COD­ING AND PAY­ING THEM LIKE EN­TREPRENEURS.

When Alex Binello was 13, he started play­ing games on a web­site called Roblox. He loved spend­ing time with ti­tles like Work at a Pizza Place and Down Hill Smash! so much that he was in­spired to build his own. Now, 11 years later, he is the cre­ator of Meepc­ity, a sprawl­ing role­play­ing game that got 15 mil­lion vis­i­tors in July on the Roblox plat­form. Forbes es­ti­mates the car­toon­ish game has earned Binello mil­lions since its in­cep­tion in 2016. e 23-year-old, who has never taken a sin­gle com­puter pro­gram­ming class, now em­ploys a salaried cre­ative direc­tor and uses six other free­lance work­ers to keep his game up­dated. “Roblox has just been part of my life,” he says. “I feel raised by it a lit­tle bit.”

Roblox, based in San Ma­teo, Cal­i­for­nia, is a com­bi­na­tion gam­ing and so­cial me­dia plat­form. ere are mil­lions of games that play­ers—mostly young peo­ple—can ex­plore with their friends, chat­ting and in­ter­act­ing all the way. But what’s unique about Roblox is that the gam­ing com­pany isn’t in the busi­ness of mak­ing games—it just pro­vides the tools and the plat­form for kids to make their own unique cre­ations. Most im­pres­sively, Roblox has turned its tween au­di­ence into an army of fresh-faced en­trepreneurs. De­vel­op­ers can charge Robux, a vir­tual cur­rency, for var­i­ous items and game ex­pe­ri­ences, and they can exchange the Robux they earn for real money: 100 Robux can be cashed out for 35 cents. (Play­ers can buy 100 Robux for $1.)

“A lot of the de­vel­op­ers on Roblox grew up on the plat­form,” says Dave Baszucki, Roblox’s 55-year-old co­founder and CEO. “And many of them are now start­ing to earn their liv­ing on the plat­form.”

Kids, as it turns out, are pretty good at mak­ing games that at­tract other kids. Glob­ally, Roblox sees more than 70 mil­lion unique vis­i­tors a month. Ac­cord­ing to coms­core, 6- to 12-year-olds spend more time on Roblox than any other site on the in­ter­net. Among teenagers, it ranks sec­ond, just be­hind Google’s sites, in­clud­ing Youtube. at trans­lates into some pretty im­pres­sive num­bers: Roblox is cash- ow-pos­i­tive on an es­ti­mated $100 mil­lion in rev­enue last year (this year that gure should be north of $200 mil­lion) and has raised some $185 mil­lion in venture fund­ing, valu­ing the com­pany at around $2.5 bil­lion. Baszucki’s stake is worth an es­ti­mated $300 mil­lion. (Roblox’s other founder, Erik Cas­sel, died of can­cer in Fe­bru­ary 2013.)

Part of the rea­son for this growth is the sheer num­ber of games be­ing pro­duced. Nearly one mil­lion games are cre­ated ev­ery month by more than 4 mil­lion de­vel­op­ers on the plat­form. ese games cover a wide va­ri­ety of gen­res, from tra­di­tional rac­ing and role-play- ing games to the pop­u­lar “cops and rob­bers” game Jail­break to more mun­dane sim­u­la­tions like Snow Shov­el­ing Sim­u­la­tor and Work at a Pizza Place. e plat­form has even spawned its own gen­res, such as “ob­bys,” com­plex, hard-to-nav­i­gate ob­sta­cle cour­ses.

“It’s al­most as if we’re run­ning Amer­i­can Idol for up-and-com­ing game de­vel­op­ers,” Baszucki says.

Roblox has its ori­gin in a com­pany Baszucki founded in 1989, an ed­u­ca­tion tech startup called Knowl­edge Rev­o­lu­tion. at com­pany built a pro­gram that served as a 2-D lab where stu­dents and teach­ers could model physics prob­lems with vir­tual levers, ramps, pul­leys and pro­jec­tiles.

What Baszucki dis­cov­ered as his so - ware made it out into the stu­dent com­mu­nity was that kids were us­ing the pro­gram to do things far be­yond text­book physics prob­lems. In­stead, stu­dents were mod­el­ing cars crash­ing, build­ings fall­ing over and other fun stu that the pro­gram’s physics tools en­abled them to build.

“Cre­ativ­ity by the play­ers them­selves was so much more en­gag­ing than the con­tent from the physics books,” he says.

In 1998, Knowl­edge Rev­o­lu­tion was ac­quired for $20 mil­lion by an engi­neer­ing so ware com­pany called MSC So - ware, so Baszucki de­cided to take some time o and gure out what he wanted to do next. In­spired by the worlds kids had built in his in­ter­ac­tive physics pro­gram, he and Erik Cas­sel, who had been vice pres­i­dent of engi­neer­ing at Knowl­edge Rev­o­lu­tion, “went into a room for over a year and a half ” to build the rst ver­sion of Roblox.

“Right when we started, we imag­ined a new cat­e­gory of peo­ple doing things to­gether,” Baszucki says. “A cat­e­gory that in­volved friends, like so­cial networking; a cat­e­gory that in­volved im­mer­sive 3-D, like gam­ing; a cat­e­gory that in­volved cool con­tent, like a me­dia com­pany; and nally a cat­e­gory that had un­lim­ited cre­ation, like a build­ing toy.” For the rst few months a er Roblox’s 2005 beta de­ploy­ment, the user com­mu­nity was tiny—dur­ing peak pe­ri­ods about 50 peo­ple were play­ing at the same time (to­day that num­ber av­er­ages over a mil­lion), but the small size of the com­mu­nity en­abled Baszucki and Cas­sel to hang

out with the play­ers and get feed­back as they re ned the plat­form.

Once the pair pub­lished Roblox Stu­dio—the app that en­ables Roblox users to cre­ate games and sim­u­la­tions—the oodgates be­gan to open. By the year 2012, Roblox had more than 7 mil­lion unique vis­i­tors per month, mak­ing it one of the most pop­u­lar en­ter­tain­ment sites for kids. e site con­tin­ued to grow, but tragedy struck its found­ing team when Cas­sel was di­ag­nosed with can­cer.

“He loved what he was doing at Roblox,” Baszucki says. “And I saw Erik not change. He kept doing what he was doing. What for me was so amaz­ing to see was that he was al­ready in a good state of bal­ance, and it kind of made me look at my own life. It was an in­spi­ra­tion for the peo­ple we hire— nd­ing the type of cul­tural t where peo­ple have a pas­sion and share our dream and make this an amaz­ing en­vi­ron­ment.”

As the com­pany grew, it also ex­per­i­mented with di er­ent busi­ness mod­els. Ini­tially, rev­enue came from ad­ver­tis­ing and a pre­mium mem­ber­ship model called Builders Club. But a er a few years the com­pany had moved to its cur­rent model: sell­ing Robux.

Roblox’s monetization scheme al­lows young de­vel­op­ers to ob­tain a cut of the money spent on their games. In 2017, de­vel­op­ers earned nearly $40 mil­lion on the plat­form. at num­ber is ex­pected to sur­pass $70 mil­lion in 2018. Roblox has also started to make toys— think ac­tion gures and plas­tic cars— based on pop­u­lar games. It shares the money it makes from those toys with its de­vel­op­ers, earn­ing them an ad­di­tional $1 mil­lion in roy­al­ties in 2017.

“We just em­power de­vel­op­ers to gure it out,” said Craig Donato, Roblox’s chief busi­ness o cer. “If a dev is too ag­gres­sive with monetization, kids won’t play. If they have a great idea, it’ll get copied.”

e com­pany also helps bud­ding coders up their game. Its an­nual de­vel­oper’s con­fer­ence draws Roblox de­vel­op­ers from all over the world to meet one an­other and exchange tips and tricks. More than 400 peo­ple came to this year’s RDC, which was held in San Fran­cisco in July.

e com­pany also has a paid in­tern­ship pro­gram that works as an in­cu­ba­tor or ac­cel­er­a­tor for young devs to cre­ate games and im­prove them. is pro­gram at the com­pany’s Sil­i­con Val­ley head­quar­ters teaches them pro­ject-man­age­ment skills and holds them ac­count­able for the dead­lines they set for their projects.

Since Roblox doesn’t need to worry about mak­ing games—or even how to make money from them—it can fo­cus al­most ex­clu­sively on in­fra­struc­ture. e com­pany is in the process of mov­ing its plat­form from third-party cloud ser vices to its own cloud. It’s hired Dan Wil­liams, who helped Drop­box move o Ama­zon’s Web ser­vice.

e next phase? Go­ing in­ter­na­tional. Al­though Roblox’s users come from more than three dozen coun­tries, the plat­form was English-only and dol­lar­sonly un­til just a few months ago, when Roblox launched a Span­ish ver­sion. Since then, the com­pany has av­er­aged 5 mil­lion vis­i­tors a month from Span­ish­s­peak­ing coun­tries.

e com­pany has also pro­duced Brazil­ian Por­tuguese, French and Ger­man ver­sions. It just hosted its sec­ond Euro­pean de­vel­oper’s con­fer­ence and is build­ing up teams to ex­pand into more re­gions over the next few years.

“It’s su­per-ex­cit­ing to think that a kid in Jakarta can make a game that a kid in Menlo Park would never even imag­ine but is re­ally fun and rel­e­vant to other kids in South­east Asia—and maybe the kid in Menlo Park, too,” says Chris Mis­ner, the pres­i­dent of Roblox In­ter­na­tional.

“Our hope is that we will ac­tu­ally bring peo­ple to­gether around the world,” Baszucki adds.

De­spite the enor­mous growth of the plat­form, Baszucki still keeps in touch with his power users—even if many don’t know his name. On a Fri­day-morn­ing com­pany tour for play­ers, a guide asked the kids if they’ve ever heard of Dave Baszucki— they all shook their heads. en she asked if they knew Buil­der­man (Baszucki’s name within Roblox).

A loud “Yes!” erupted from the group.

Roblox box: Co­founder Dave Baszucki leans against a mockup of a video game ac­tion-fig­ure set at the firm’s head­quar­ters in San Ma­teo, Cal­i­for­nia.

IN 2017 UP-AND-COM­ING GAME DE­VEL­OP­ERS EARNED NEARLY $40 MIL­LION ON ROBLOX. THIS YEAR THAT NUM­BER SHOULDTOP $70 MIL­LION.

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