Roblox is the biggest game in the world, but is unprofitable • Hacker News Board

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

#301

Post by dagmx » Mon, Aug 19, 2024, 1:41 PM UTC

Fire-Dragon-DoL wrote: post #161

dagmx wrote: post #145

Earlier quoted context omitted.

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 re…

I mean, Steam did release the Steam Deck, so yes it provides everything you described. I'm not sure why we are focusing on the 30%, the problem is that facebook, a very rich company, get charged 0.

Literally the last section of my comment addressed that. It’s a single digit market share. How does that play into windows/mac sales then? And what about the decade+ of sales before the SteamDeck?

And in that case, no, Valve didn’t provide all of that. They provided some of it, but AMD did the graphics driver, arch did the OS. Valve still offer less for the 30%. I’m not trying to diminish the effort they put in, but just pointing out the totality of what each store offers behind it is very different.

To your last point, that’s not really relevant to my point. I’m just pushing back on the other person about whether Apple or valve offer more for the 30%. You’re interjecting a completely different argument.

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

#302

Post by hansvm » Mon, Aug 19, 2024, 1:44 PM UTC

wavemode wrote: post #4

> Though Roblox isn’t profitable, there are some significant caveats to the situation. Over the last twelve months, operating cash flow—a far more important measure than accounting-defined profits—were $650MM, about 20% of revenue. Roblox has been cash-positive for at least twenty-four quarters. This feels like an example of the phenomenon highlighted in another recent post: https://news.ycombinator.com/item?id=41263…

> if cash flow ever does stop increasing, they can always get back to sustainability by pumping the brakes on reinvestment spending

This is a point that's sometimes less obvious with cash flow games. It's possible to have positive cash flow even with negative unit economics, _even when no economy of scale can sufficiently improve those unit economics_ [0], so long as you have enough growth and a good cash flow situation.

That's one of the criticisms Uber has had over the years; are they capable of sustaining their apparent pre-reinvestment profits if they cut out that spending? It's potentially a bit different from the Amazon situation because most of the money is going straight into speculative bets, acquiring competitors, ads, ride subsidies, and other activities designed to lock in the market, and it's unclear if that will give them a meaningful moat, as opposed to, e.g., capital investments in a fantastic, in-house distribution and shipping mechanism.

Can Roblox actually become sustainable by cutting spending somewhere?

[0] Imagine a product with -50% unit ROI. For every dollar in revenue you have two dollars in guaranteed costs. However, suppose the product is paid for fairly early relative to those costs (e.g., the business offers a steep discount on yearly subscriptions if you pay up-front, the costs are incurred linearly throughout the year as the subscription is used, and there's a till-the-start-of-next-month plus 30 days lag on billing for computing resources used). You haven't actually used enough resources to be in the red till 6 months after the subscription starts, and you're not actually on the hook for that last payment till 7 months have elapsed. If you're also able to hit a 2x annual growth rate in your paid subscriber count (not realistic for large companies, not uncommon for a few years with good product-market-fit in gaming or some SAAS products), you've paid for the year's losses before the year has ended and still have an extra month at the end where the money is sitting in your account. As your company doubles its subscribers, your coffers will continue to double as well, even if you have indefinitely negative unit economics.

In the real world you usually have smaller numbers being considered (smaller losses, less growth), allowing the game to go on for many more years.

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

#303

Post by maxsilver » Mon, Aug 19, 2024, 1:51 PM UTC

simpaticoder wrote: post #273

low_tech_love wrote: post #130

Earlier quoted context omitted.

I get you perfectly (I play Roblox with my kid almost everyday) but I have another opinion. When I think about what it accomplished, I think Roblox is pretty amazing; actually one of the most amazing software ever made. It accomplished in practice basically what lots of people have been trying to do for decades, since the MUDs from the 70s, and what Zuckerberg wasted billions of dollars with. Sure, most of its conten…

My kids have recently become interested in Roblox. I installed it on the PS5 but honestly I don't get the appeal. The games we tried are of very low quality. It doesn't have the complexity or interest of Minecraft. It doesn't have the polish of Astro's Playroom (or Ratchet and Clank: Rift Apart, which they are too young to play). It reminds me a little of Fortnite's non-battle-royal games, but much worse. Can you giv…

It's less about the games being high-quality, and more the games being community-created and user-driven.

Roblox isn't a competitor to Astro's Playroom or Ratchet and Clank. Roblox is like, the next generation of ActiveWorlds, or like a user-generated version of Uru. It's a 3D Chatroom that solved the problem of "what do you do when people want something to do, while standing around chatting in the 3D chatroom?" by saying, "we'll give a bunch of tech tooling to the players, and maybe 0.1% of them will do something interesting with it". And that's enough.

The closest PS5 equivalent would be something like, the Dreams game from Media Molecule.

----

As a parent (with a kid, who loves Roblox), I totally get it. I lived on ActiveWorlds as a kid, I saved up paper-route money to pay for my own "P-10 World" back in the day. The next summer, I used paper-route money to buy a "catch-a-call" device, so I could be on ActiveWorlds via Dial-up without tying up the phone line from my parents. I had an entire alternative identity and active social life on there in middle-school & high-school. I would bicycle all the way downtown to local community college, to take VB6 classes with college students over the summer, to learn how to program against their ActiveX control API to write my own ActiveWorlds Bot, to interact with folks in my private ActiveWorld. I ran an ActiveWorlds "TV Station" (in AW, you could set a JPEG image to 'refresh' regularly like a webcam, and I would point the URL at a custom PHP script I ran on an old cPanel-based shared hosting plan, that would rotate JPEG images out in appropriate order every 1 or 2 seconds, in pre-programmed ways, so you could have 'shows' broadcasting, and you could switch to 'live' (screenshots) on 'air' and such)

I treat Roblox similarly for my child. (They can play on it, but never use real names, reveal no personal information, there's some time limits to ensure you don't go crazy, talk through appropriate content and what stuff warrants adult intervention, etc. And gently prod them that, if they're ready to deep-dive on Roblox, all the tools people use to make their favourite "obbys" are things they could actually learn and write themselves, with some time and patience and practice...)

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

#304

Post by gradyfps » Mon, Aug 19, 2024, 1:54 PM UTC

Aeolun wrote: post #65

TulliusCicero wrote: post #52

Earlier quoted context omitted.

Hard agree on the jank, but it may not be possible to fix that while keeping the upsides of the platform.

I don’t think there’s anything inherent in Roblox that means the characters have to look and be animated like janky robots.

It takes a huge amount of effort to overwrite & re-animate the default ROBLOX characters and their animations.

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

#305

Post by dagmx » Mon, Aug 19, 2024, 1:55 PM UTC

ffgjgf1 wrote: post #228

dagmx wrote: post #145

Earlier quoted context omitted.

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 re…

> 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? Sure. But this has absolutely nothing to do with fairness. They charge 30% because they can and because developers have no other options. Anyway consumers paying for HW/OS are the ones that are funding the develop…

Without an insight into how a company pays for its RnD internally, one cannot conclusively say that the consumers are the ones who pay for the HW/OS.

I’ll also reiterate that the majority of devs pay 15% now on the App Store. Not 30%.

And then this gets into every other market choice as well if we’re saying all the stuff is paid for up front by the consumer.

What does Steam offer for its 30%? The majority of games on steam don’t use any steam services unlike apps on the AppStore. Valve doesn’t do educational sessions for developers or provide support for system issues. So is Steam not a terrible deal at double the cost?

But then we get to consoles, where the consumer not only pays for the device but also pays a subscription for online play. If we say that Sony/Microsoft are funded up front by the consumer and then recurring for online fees, then what the value to developers for the 30% (in addition to devkit costs)?

I’m not defending apples cut here. That’s a subjective argument that goes nowhere, but I am saying: if we say Apple’s cut is unfair, why are we okay with the others that are arguably more? And why do people defend the other marketplaces ?

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

#306

Post by gradyfps » Mon, Aug 19, 2024, 1:57 PM UTC

beart wrote: post #256

shkkmo wrote: post #232

Roblox is a destable scummy company that depends on the exploitation of children to make money. They took the exploitative practices of microtransaction based games, targeted them at children, then decided to use child labor to create content inside an expoitatively taxed monetization system, then decided to abdicate all their responsibility for responsible community management to protect these children by shutting d…

Agreed. And it goes beyond jaded monetization. A popular player and predator was only recently arrested after initiating physical contact with one of the child laborers. The game is simply not a safe environment for children.

Pedophilia & child-predation have been an open secret to anyone socially involved in ROBLOX for the longest time. The amount of random 18+ people interacting often and without guardrails with 13/14/15 year-olds is "normalized" to those in the communities.

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

#307

Post by kraig911 » Mon, Aug 19, 2024, 1:57 PM UTC

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.

Eh IMO how is it any worse than a video arcade? I really think that's all Roblox is an arcade. Yeah it's the experience is fleeing and ephemeral. But these kids are hopefully experiencing what I felt in my childhood that I can't achieve anymore. I probably dumped 60$ alone over months going to Pizza Inn trying to win at Mortal Kombat.

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

#308

Post by dagmx » Mon, Aug 19, 2024, 1:59 PM UTC

justinclift wrote: post #248

ffgjgf1 wrote: post #230

Earlier quoted context omitted.

Steam Deck is mostly standard Linux (although most stuff Valve does is gets merged into the kernel/free packages etc. so it’s hard to disentangle the these, but not exactly comparable to building a platform almost from scratch) > the problem is that facebook, a very rich company, get charged 0. Just like every other company using the same business model (i.e. ads instead of IAP)?

> building a platform almost from scratch) Are you meaning iOS there? Of so, please remember they pulled significant amounts of code from Open Source Software in order to lighten their development load. :)

But they also contribute significantly to that same open source so how do you balance that out?

Again, I’m not saying they’re above criticism but I am saying this feels like a very one sided presentation of facts.

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

#309

Post by simpaticoder » Mon, Aug 19, 2024, 2:03 PM UTC

maxsilver wrote: post #303

simpaticoder wrote: post #273

Earlier quoted context omitted.

My kids have recently become interested in Roblox. I installed it on the PS5 but honestly I don't get the appeal. The games we tried are of very low quality. It doesn't have the complexity or interest of Minecraft. It doesn't have the polish of Astro's Playroom (or Ratchet and Clank: Rift Apart, which they are too young to play). It reminds me a little of Fortnite's non-battle-royal games, but much worse. Can you giv…

It's less about the games being high-quality, and more the games being community-created and user-driven. Roblox isn't a competitor to Astro's Playroom or Ratchet and Clank. Roblox is like, the next generation of ActiveWorlds, or like a user-generated version of Uru. It's a 3D Chatroom that solved the problem of "what do you do when people want something to do, while standing around chatting in the 3D chatroom?" by s…

It sounds like the platform really matters for Roblox, if it's that much of a creative tool. BTW the first time I'd heard of "ActiveWorlds" (or Uru) was just now from your comment. And it also sounds like my kids don't have the problem Roblox solves! (And I don't really want them standing around in a chat room looking for things to do; absent a compelling reason to look at a screen, I encourage them to do real-world things.)

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

#310

Post by simpaticoder » Mon, Aug 19, 2024, 2:05 PM UTC

itomato wrote: post #221

low_tech_love wrote: post #130

Earlier quoted context omitted.

I get you perfectly (I play Roblox with my kid almost everyday) but I have another opinion. When I think about what it accomplished, I think Roblox is pretty amazing; actually one of the most amazing software ever made. It accomplished in practice basically what lots of people have been trying to do for decades, since the MUDs from the 70s, and what Zuckerberg wasted billions of dollars with. Sure, most of its conten…

"...is total crap" Why are people OK with this? Because there's a place to spend "money" inside this virtual space? The paradigm could be replaced with literally anything, yet the prevailing mode of "play" in these spaces is convert meatspace credits to in-game "virtual property"; costumes, weaponry, etc. These kids arent' making anything, they're aphids.

Nice reference to aphids (which are used like cows by ant colonies). So kids make games which require currency from other kids?! Why would they do that? Do they get a cut?