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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

#141

Post by Mordisquitos »

guiambros wrote: post #97
danielheath wrote: post #47

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.

> 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.

Fair enough. So I guess if I don't mind worrying about all those things, I can simply reach my own agreement with a PCI-compliant payment service provider to charge customers through my app directly and therefore avoid that 25% platform tax, right?

...right?

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

#142

Post by thorncorona »

booi wrote: post #138
justinclift wrote: post #93

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, but wants ~1/3 of every transaction. I would bet Apple has put more into R&D for iPhones, iPads and iOS than the entire enterprise value of visa and mastercard put together. If anything, they've worked for it more than visa/mastercard who are merely rails with distribution. Most of the heavy lifting, risk and work in the card ecosystem is done by the issuers (banks et. al.)

I think you underestimate the difficulty of competing against visa or mastercard.

Visa and mastercard are logistical masterpieces.

Think of how much legal work needs to be done in order to be compliant in every country in the world.

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

#143

Post by nottorp »

justinclift wrote: post #106
cenamus wrote: post #104

Earlier quoted context omitted.

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. :)

Someone in the food chain does take less in some EU countries. Not all.

The commissions are capped by law in some parts, but not others.

As a small sample, in RO i think a large store chain pays like 0.5%. The consequence is credit card reward programs are either non existent or something like 0.1% cashback. The other consequence is you can pay by card almost anywhere.

On the other hand I've been to NL and small stores simply did not take Visa/MC because it was too expensive for them. Guessing the visa/mc charges weren't capped there.

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

#144

Post by vlovich123 »

justinclift wrote: post #126
diatone wrote: post #122

Earlier quoted context omitted.

Apples to oranges. Card networks have more than three stakeholders to work with per transaction, apply fees indiscriminately from milk to digital music subscriptions, and operate at truly staggering volumes.

You're right. Visa and Mastercard seem to do a lot more, yet charge a very small fraction of the amount.

Yet Canada has Interac and India has UPI which nationalize all digital transactions while charging even less. In Europe they’re much more heavily regulated and this charge even less than in the States.

So if within their own industry Visa and Mastercard overcharge like crazy, especially when they can, what makes you so sure that they’re a good counter example for a completely different industry? Especially when competitors seem to be charging a very similar rate for a similar service?

That being said, it is a fair point when you consider that retailers and other similar product middle men tend to charge 1-3%, but it’s important to also consider that Apple position’s itself as a luxury product and brand where 30% markup isn’t actually out of line.

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

#145

Post by dagmx »

justinclift wrote: post #112
ffgjgf1 wrote: post #108

Earlier quoted context omitted.

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

Steam reportedly puts in a bunch of effort to earn it though. Whereas Apple's relationship seems more predatory/antagonistic (at best).

You think Steam puts in more effort than providing graphics APIs, system frameworks for everything from networking to controller handling, UI libraries, educational sessions and security critical updates?

Like, one may argue that the 30% isn’t valid (and it’s 15% for the majority of devs) but to say Steam does more is absurd.

I’m curious if people who hold this opinion have actually been involved in the process of releasing apps on either platform.

And to be clear, I know valve does contribute to gaming on Linux but that’s single digit market share, so is definitely a far cry from the 30%.

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

#146

Post by myspy »

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.

Only 3% of the 30% go to payment processing. Hence why they still want 27% when developers choose their own payment system.

The 27% are seen similar to Sony and Nintendo as fees to be on a platform which has wide reach but also gives tools and does stuff to enable app distribution.

Is that too much? I don‘t know but it‘s what all appear to do. The platform politics didn‘t evolve as fast as the tech though. So what about apps like Patreon, Netflix, Spotify, that was never on the table in 2008.

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

#147

Post by nottorp »

wolpoli wrote: post #113
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.

Microsoft/Sony/Nintendo subsidize the development and cost of their dedicated gaming system from the 30% cut of the store sales. It's very different on the mobile side: Apple sells iOS devices at full cost. With Android, it gets even more mucky as Samsung, the hardware vendor, gets 0% of the sales on their handset (unless the user, for some reason, uses the Samsung store), and Google gets the full 30% for only their…

> Google gets the full 30% for only their software work

Not that I trust Google (my personal phones are Apple) but how do you think a phone with all software made by Samsung will work? Every time I lay my hands on one of their phones (and I have one on my desk for Android development) something annoys me. They somehow think they know how to do UI/UX but they still haven't learned after all these years of "customizing" Android.

So yes, Google deserves some money. Not 30% but some.

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

#148

Post by anonymoushn »

vishnugupta wrote: post #81
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’m surprised that Roblox haven’t done what Amazon did with Kindle books. They just stopped book purchases through Kindle iOS app. At this point it’s safe to assume Roblox is as popular as Apple so they don’t have the problem of discovery. Distribution yes for which they can pay the listing price.

They need 8-year-olds to be able to make unauthorized purchases on their parents' credit cards, so the IAP flow is important.

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

#150

Post by saurik »

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.

FWIW, there are large publishers which successfully negotiate with the ilk of Microsoft[1] and Sony[2] to get a better revenue split, as consoles in fact have more functional competition than mobile phone app stores: people who own a gaming console might could reasonably own a second one if they were interested in some game that was only available on one console or the other; this simply doesn't happen with phones, as only a small handful of particularly-crazy power users would ever carry around a second cell phone. If you want to not release on Xbox unless Microsoft gives you a better deal, it doesn't sound anywhere near as ridiculous to tell your potential customers "you'll have to also own a Playstation" as if you tried to explain to people that to use your new social network they have to also own and carry around an Android phone (or, worse, whatever the third option might be... is there even a third option anymore that would make any sense? ;P). You can tell that Apple has some insane amount of fundamentally market-distorting power as they seriously charge large publishers -- the ones you would expect to have the most leverage -- more than smaller ones; and, with maybe a sole exception of WeChat, we have never heard of anyone getting a better deal out of them, ever.

[1]: https://x.com/tomwarren/status/1671981463040819200?s=46

[2]: https://x.com/twthereddragon/status/1672270407179665409?s=46

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