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

matthewball.co

101–110 of 590 posts

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

#101

> 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…

Well, Tencent needs to pay the same Apple and Android tax as well for its gaming business, but guess what, Tencent's gaming business is very profitable. The real difference is that Tencent has a big market share in China(arguably the most profitable gaming market in the world) and Roblox has none.

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

#102

Earlier quoted context omitted.

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.

> also provides discoverability and distribution.

Apple seems to be incredibly poor at discovery, so that's not a point in their favour.

Distribution could be done by any number of other CDNs, as will likely be done by the new EU based App stores.

What's the bet those won't be charging ~30% transaction fees to cover things? And they won't even have the same scale as Apple. ;)

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

#103

Earlier quoted context omitted.

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.

Not sure what you’re talking about, you still can’t buy kindle books on iOS apps.

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

#104
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.

But doesn't that have way more to do with (EU) regulation? I thought that they take quite a significant chunk in the US

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

#105

> 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

Plus the advertising network takes its own tax, right? Then it goes into the same or similar pockets again anyways.

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

#106

Earlier quoted context omitted.

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.

But doesn't that have way more to do with (EU) regulation? I thought that they take quite a significant chunk in the US

That a bit unclear. Are you meaning Visa/Mastercard charge less in the EU due to EU regulations?

If that's what you're meaning, then I simply don't know as I've not heard that before. :)

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

#107

Earlier quoted context omitted.

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.

They lock their users in a walled garden where only they can provide discoverability and distribution.

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

#108
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.

Steam also takes 30% despite all platforms it operates on being entirely open. So it doesn’t seem to be that unreasonable

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

#109
post #78
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.

Google gives you an App Store and maintain the OS that other hardware vendors (and sometimes themselves) implement hardware around. They take a 30% cut for distribution in their special app store and not much else.

Microsoft and Sony take similar cuts for access to their game consoles. In return they provide: - High quality, robust developer APIs. - High quality debuggers, graphics debuggers and CPU+GPU profiling tools with in-depth access to hardware counters - Networking libraries for matchmaking, and a network backend for tunneling network traffic via their online services - True development kit hardware with expanded resources for debugging tools - High quality documentation and direct support - GPU drivers that actually work - Payment processing - All for a hardware platform that is typically sold at or below BOM cost for the initial launch of the device

Google provides distribution via the Play Store, and only for about ~4GB of app before they force you to use your own CDN because they have a limit on the size of the app bundle they'll distribute. There's likely things I'm not aware of that Google provides for app developers rather than game developers, but if we're comparing to game consoles then I'm going to compare tool for tool.

Apple's tooling is better, largely because they have way more control over the target hardware and software environment, but they take an additional cost via their highly restrictive app guidelines.

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

#110

Earlier quoted context omitted.

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.

But doesn't that have way more to do with (EU) regulation? I thought that they take quite a significant chunk in the US

Not really. They still take “only” up to 1-2% in the US
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