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Roblox is the biggest game in the world, but is unprofitable

matthewball.co

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Re: Roblox is the biggest game in the world, but is unprofitable

#91

Post by bemmu »

itake wrote: post #78
bemmu wrote: post #60

Earlier quoted context omitted.

I'm a full-time developer of Roblox games. It's wild that Apple or Google make as much from my games as I do. Obviously it still works out well enough since I'm not abandoning the platform, but strange anyway.

why is it wild? Microsoft keeps 30% of xbox store sales. Apple, Google, MS, etc. play a massive part in attracting users to the platform.

Absolutely, it's better to have a smaller slice of a bigger pie, which is why I'm OK with this.

What I meant by "wild" is that in this case, the dev of the game is the one receiving that ~30% slice. Apple+Google get about the same as the dev does.

Re: Roblox is the biggest game in the world, but is unprofitable

#93

Post by justinclift »

itake wrote: post #78
bemmu wrote: post #60

Earlier quoted context omitted.

I'm a full-time developer of Roblox games. It's wild that Apple or Google make as much from my games as I do. Obviously it still works out well enough since I'm not abandoning the platform, but strange anyway.

why is it wild? Microsoft keeps 30% of xbox store sales. Apple, Google, MS, etc. play a massive part in attracting users to the platform.

Visa and Mastercard provide entire global payment platforms, yet only (generally?) take a small fee per transaction.

Apple seems to do a lot less, but wants ~1/3 of every transaction.

Re: Roblox is the biggest game in the world, but is unprofitable

#94

Post by throwaway984393 »

bemmu wrote: post #91
itake wrote: post #78

Earlier quoted context omitted.

why is it wild? Microsoft keeps 30% of xbox store sales. Apple, Google, MS, etc. play a massive part in attracting users to the platform.

Absolutely, it's better to have a smaller slice of a bigger pie, which is why I'm OK with this. What I meant by "wild" is that in this case, the dev of the game is the one receiving that ~30% slice. Apple+Google get about the same as the dev does.

[dead]

Re: Roblox is the biggest game in the world, but is unprofitable

#95

Post by modeless »

saint- wrote: post #82
modeless wrote: post #17

The bigger question about Roblox is how and why they got their special treatment from Apple. The whole concept of Roblox is in blatant violation of Apple's App Store policies. I believe they are significantly shielded from competition because who else can get that kind of ongoing and reliable relief from Apple's famously picky and capricious App Store reviewers? Maybe Roblox is happy to pay Apple their 30% in exchang…

Curious, why is Roblox in violation of Apple's App store policies?

> Apps should be self-contained in their bundles, and may not read or write data outside the designated container area, nor may they download, install, or execute code which introduces or changes features or functionality of the app, including other apps.

Roblox is in clear violation of this clause, downloading and executing entire games written in Lua. Apple does have an exception to this policy for HTML5 games and streaming games but Roblox does not qualify because it is not HTML5 and not streaming. Many people have had their businesses destroyed for far less serious violations of App Store policy.

I believe there are also other rules against putting an app store inside your App Store app. Clearly Roblox is an app store for games, with its own currency. Apple has not been reasonable on this point with other companies: they originally didn't even want to allow cloud game streaming apps to play multiple games in a single app. Their ridiculous plan was to require a separate Apple App Store listing for each game that a streaming platform supported, and they only relented under pressure after Microsoft went public with their complaints: https://www.theverge.com/2020/9/11/21433071/microsoft-apple-... And after that debacle they explicitly added exceptions to their policies for game streaming apps. They have never done so for Roblox-like apps, which are still plainly forbidden under their publicly posted policies.

Re: Roblox is the biggest game in the world, but is unprofitable

#96

Post by kilolima »

learlu wrote: post #71

One thing the article doesn't touch on is that Roblox has yet to tap into the China market, where 25% of the world's gaming revenue reside.

Given China's experience with the West's sordid attempt to subvert them via opium, it seems highly unlikely that roblox would ever be legalized there.

Re: Roblox is the biggest game in the world, but is unprofitable

#97

Post by guiambros »

danielheath wrote: post #47
andyferris wrote: post #22

> Unlike other social platforms, Roblox’s revenue is nearly all via user spending rather than advertising. As such, Roblox pays 25% of its revenue to Apple and Google (30% of transactions on those platforms) whereas Facebook, Snap, et al pay effectively 0. Note that Facebook, which has structurally lower costs to service users than Roblox and is far more mature, has an operating margin of roughly 40% — if the company…

I also hadn't thought about it before, but when you present it that way it's dazzlingly clear - thank you! Get money from your users: 25% platform tax Get money from advertisers: No platform tax

More like:

- Get money through the platforms' users and their payment methods, without having to worry about asking for users' credit card information, billing, chargebacks, or individual invoicing: 25% platform tax.

- Get money through your own means, similarly to what Amazon did with Kindle books: no platform tax.

Re: Roblox is the biggest game in the world, but is unprofitable

#98

Post by modeless »

impulser_ wrote: post #87
modeless wrote: post #57

Earlier quoted context omitted.

You are right that not all undisclosed arrangements are securities fraud. However, an undisclosed arrangement that represents an existential risk to the company were it to ever change would be securities fraud. You can't go public with huge undisclosed risks like that.

They disclose risks under Risk Factors in their quarterly filings.

Obviously, like all public companies. But have they disclosed the specific risk that Apple might stop giving them special treatment and stop protecting them from competition or start enforcing the policies they violate? I believe I read their S-1 some time ago and didn't find any mention of special treatment from Apple. It's possible they started disclosing it later, but even that would still expose them to shareholder lawsuits from IPO investors.

Edit: They are also vulnerable to insider whistleblowers. Any whistleblower would be eligible for rewards of 10-30% of any penalty ultimately assessed by the SEC. The SEC has paid tens of millions to single whistleblowers in the past.

Re: Roblox is the biggest game in the world, but is unprofitable

#99

Post by vishnumohandas »

justinclift wrote: post #93
itake wrote: post #78

Earlier quoted context omitted.

why is it wild? Microsoft keeps 30% of xbox store sales. Apple, Google, MS, etc. play a massive part in attracting users to the platform.

Visa and Mastercard provide entire global payment platforms, yet only (generally?) take a small fee per transaction. Apple seems to do a lot less, but wants ~1/3 of every transaction.

> Apple seems to do a lot less

Not suggesting that this warrants a 30% cut, but unlike payment gateways Apple also provides discoverability and distribution.

Re: Roblox is the biggest game in the world, but is unprofitable

#100

Post by jack_pp »

ElCapitanMarkla wrote: post #88

My kids have started playing Roblox recently and they have started asking for some Robux so they can buy crap... I really don't get how so many people are into spending dollars on this stuff. Everything they wanted was ~$10-20 NZD and it was just throw away stuff, like a costume, etc. And then it's only useful in that one game you have brought it for. It blows my mind that it ever got this popular.

Because kids aren't utilitarian. They want shiny things impulsively now in whatever niche game they are playing at the moment. Or want to keep up with their friends who got cool stuff to keep status. Doesn't matter to them that they'll switch games in a week and lose everything.
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