Over half of all US kids and teenagers under the age of 16 play Roblox every month.
Read that again.
Over half of all US kids and teenagers under the age of 16 play Roblox every month. It’s been going on for years, completely under the radar.
You’ve never heard of Roblox.
We live in a fragmented world, where cultural explosions go unnoticed by anyone outside the target zone. This goes along with my article about niches that you’re unaware of despite their huge audiences: in music, where Bad Bunny’s sales blow away every recording star you’ve heard of combined; where Colleen Hoover – Colleen Hoover! – overwhelmingly dominated book sales in 2022; and where a guy known as Mr. Beast has 126 million subscribers on YouTube.
You thought you were keeping up with the kids. You’ve never played Minecraft or Fortnight but at least you know the names. You might not scroll through TikTok videos yourself, but you’re aware it exists, it’s a thing, whatever it is.
But – Roblox?
Mark Zuckerberg knows about Roblox. If you understand what Roblox represents, you will know everything you need to know about why Zuckerberg is trying to replace/supplement Facebook with a social network built on new technology.
Let’s see if I can give you the basics.
What is Roblox?
Roblox has been around for sixteen years. It started to grow fast in the late 2010s, and really took off during the pandemic. Almost sixty million people use it every day, more than two hours per day on the average, 80% under the age of 16. It is a truly global phenomenon; daily active users are evenly split between the US, Europe, Asia, and the rest of the world.
Roblox is a lot of things – a platform, a social network.
It’s a website at www.roblox.com.
It’s an app – most people use it on their phones but you can install it on computers, iPads, and Xbox consoles too. Expect it to be released this year for Playstation.
Kids create an avatar to represent themselves, starting with a cartoony Lego-like figure and choosing the look of their heads and hair, clothing, and accessories. Then they move freely among a nearly infinite variety of 3D experiences.
There are games, some from professional developers. But it’s also a digital sandbox where kids can build their own games, anything from a restaurant simulation to a game of hide and seek. That’s why there are currently over 40 million games. The games created by children are frequently simple, buggy, unfinished, raw, stupid, of course they are! And the kids play them and they laugh and laugh and play some more.
But Roblox is not just a place to play games. Tweens socialize on Roblox. There are spaces for meetups. It’s the 2020s version of the mall. During the pandemic, virtual birthday parties were held in Roblox. It’s now beginning to promote virtual concerts and conferences.
Follow the money
Roblox Corp is a publicly-traded company valued at $20 billion, with more than $2 billion in revenue in 2022.
It has not yet become very profitable. Can you guess why?
Right. Kids under 16 don’t have much money.
Look at the big picture. A generation of kids is growing up immersed in an online environment where they create an avatar and interact with each other. Imagine what happens as they get older and get their first jobs.
They will outgrow the service aimed at kids and tweens.
Very soon, in the next few years, the vast Roblox audience will have disposable income and they will be looking for a new place to hang out online.
Are you starting to understand Mark Zuckerberg’s dreams?
Horizon Worlds and virtual reality
Meta/Facebook’s social platform is named “Horizon Worlds.” It’s intended to be Roblox for older kids and grown-ups – games, gathering places, events and concerts, socializing – but with guardrails and content moderation so people play nicely.
It’s off to a slow start. Few people are using it. The avatars look terrible, the games and worlds are unappealing, few developers are contributing to it. It’s only available on the Quest VR headsets, which have a small audience compared to the number of people using phones and tablets.
Meta is working on improving the avatars and getting the first batch of content spiffed up. When that’s done, expect to see mobile apps and a web-based version of Horizon Worlds. I haven’t seen any recent announcements but Meta execs talked about those plans in April 2022. That will make it directly competitive with Roblox.
In the meantime, don’t underestimate the audience for virtual reality.
Horizon Worlds is modeled in part on two very successful VR social platforms, VRChat (2 million monthly active users) and Rec Room (3 million monthly active users).
Right now VR goggles are fringe items for well-heeled gamers, but there will be a lot of attention paid to VR in 2023 and sales will begin to ramp up.
Apple will introduce a VR headset any time now, possibly in the next two weeks. Apple might not sell huge quantities of its devices; the current rumors say the first generation will be priced high and aimed at developers. Apple will be hoping in part to draw attention to VR and AR and get people talking, maybe even excited.
Meanwhile, Sony will begin shipping the next-generation Playstation VR2 on February 22 for $599, supported by extensive advertising and a few exclusive games. They expect to sell a few million of them in 2023.
HTC will get some press but not many sales for its upgraded Vive Pro 2 headset, just over a thousand dollars.
The real action will start this fall when Meta releases the Quest 3, the successor to the aging Quest 2 for VR gamers. Rumors suggest it will have appealing specs and Zuckerberg said the price would be in the $300-$500 range. If the supply chain holds up, Meta will sell millions for the holidays.
All this means that 2023 is the year where VR will gain momentum, after some slow years without much new equipment or strong games.
Roblox dreams about Mark Zuckerberg
How do we know that Mark Zuckerberg dreams about Roblox? Because Roblox dreams about Mark Zuckerberg.
Last week the first rumor appeared that Roblox intends to release a standalone VR app that can run on the Quest headsets. Those are the same Quest headsets that will be available later this year at a price that parents can afford to put under the Christmas tree.
See where this is going? Roblox might be a launch title for the Quest 3, an irresistible lure to increase holiday sales. At the same time, Zuckerberg hopes that Horizon Worlds will be a tempting destination for kids outgrowing Roblox.
Virtual reality is still going to be a niche product for gamers at the end of 2023.
But niches can be really, really large. Keep your eyes open so this one doesn’t sneak up on you unnoticed.