Roblox Stock

Roblox Corporation (Roblox) operates a free to use immersive platform for connection and communication (the Roblox Platform or Platform) where people come to create, play, work, learn, and connect with each other in experiences built by global community of creators. Users are free to immerse themselves in experiences on the Roblox Platform and can acquire experience-specific enhancements or avatar items by using purchased Robux, the company’s virtual currency. Any user can be a developer or creator on the Platform using Roblox Studio, a set of free software tools. Developers and creators build the experiences that are published on Roblox and can earn Robux by monetizing their experience, creating and selling or reselling avatar items, or creating and selling Roblox Studio plugins.

The company’s Platform consists of the Roblox Client, the Roblox Studio, and the Roblox Cloud. Roblox Client is the application that allows users to seamlessly explore 3D immersive experiences. Roblox Studio is the free toolset that allows developers and creators to build, publish, and operate 3D immersive experiences and other content accessed with the Roblox Client. Roblox Cloud includes the services and infrastructure that power its Platform.

With more users on its Platform, greater engagement and monetization opportunities exist, which in turn, makes Roblox more attractive to developers and creators, incentivizing them to design increasingly engaging content and encouraging new developers and creators to start building on its Platform.

Second, the company’s Platform is social. When users join, they typically interact with friends, which inspires them to invite more friends, who in turn, invite their friends, driving organic growth. The more friends that each of the company’s users have interacting on the Platform, the more valuable and engaging the Platform becomes. This drives more users to the company’s Platform through word of mouth from their existing friends on the Platform.

User and Creator Community

Roblox is powered by content from the company’s community of developers and creators who build immersive and engaging experiences found only on Roblox, as well as the vast majority of the items for customizing avatars. This content attracts the company’s users to immerse themselves in the millions of experiences found on the Platform. Many of the company’s users may also eventually become developers and creators, and nearly all developers and creators started as users.

Users

In the year ended December 31, 2023, 68.4 million average DAUs across over 190 countries enjoyed experiences on Roblox across mobile, desktop, and console platforms, of which on average, 852,000 were daily unique paying users. The company’s users are diversified across multiple dimensions, including age, geography, platform, and gender. Each day, users express themselves through their avatars, explore different worlds, and engage with others in the Roblox community. In the year ended December 31, 2023, there were over 3,000 experiences that generated at least 1 million hours of engagement and over 500 experiences that generated 10 million hours of engagement or more. During the year ended December 31, 2023, users spent 60.0 billion hours engaged on the company’s Platform, or an average of 2.4 hours per DAU each day. Over the same period, the company’s users explored an average of over 19 different experiences on the Roblox Platform per month.

Developers and Creators

The company offers developers and creators the ability to build engaging, immersive experiences and marketplace items that they can easily share with the Roblox community. The company refers to users who create experiences and marketplace items as creators, while developers represent a subset of the creator community that create experiences on the Platform or build and sell custom tools to help other developers create experiences. In this way, the company’s developers and creators enable it to offer a wide variety of experiences and avatar items and cost-effectively crowd-source its experiences, marketplace content, and developer tool ecosystem. In the year ended December 31, 2023, the company had millions of active developers across more than 180 countries who had either created or updated an experience on the Roblox Platform. The company’s developer and creator community includes individuals with a wide spectrum of professional capabilities and team sizes, ranging from young students and independent hobbyists, all the way to full-time studios.

The company measures the health and success of its developer and creator community based on their earnings and the user engagement in their experiences. As its Platform has scaled, the company’s monetizing developers and creators have enjoyed meaningful earnings expansion over time, reflecting the increasing popularity and opportunities for monetization of its Platform and driving a growing incentive for its developers and creators to continue to build high-quality content.

Developers and creators are able to earn Robux through the following methods:

Monetizing a developed experience: Developers qualified for the company’s Developer Exchange Program can earn Robux through in-experience purchases, which consist of microtransactions generated from the sale of in-experience virtual items, subscription-based offerings (including access to private servers), access to certain experiences, and/or passes granting special in-experience privileges; engagement-Based Payouts, which allows developers to earn Robux based on the share of time that Roblox Premium subscribers engage in their experience; and immersive advertisements (ads), which are high-quality, in-experience native ad units that can programmatically serve ads through which developers can earn Robux from impressions and/or teleports generated.

Creating and selling or reselling avatar items: Creators can create and sell accessories, clothes, bodies, and heads for avatars in the Marketplace or in their own or other developers’ experiences.

Creating and selling Roblox Studio plugins: Through the Creator Store, developers and creators can sell Roblox Studio plugins, which are extensions that add additional features or functionality to Roblox Studio and helps improve creator workflows.

There were over 5.0 million developers and creators who earned Robux on the Roblox Platform in the month ended December 31, 2023. As of December 31, 2023, over 16,500 developers and creators qualified for and were registered in the company’s Developer Exchange Program, of which over 5,000 were newly qualified and registered during 2023. In order to be qualified for its Developer Exchange Program and eligible to exchange earned Robux for real-world currency, developers and creators must meet certain conditions, such as having earned the minimum amount of Robux required to qualify for the program, a verified developer account, and an account in good standing. On January 31, 2022, the company reduced the minimum amount of earned Robux required to qualify for the program from 100,000 Robux to 50,000 Robux and subsequently on January 31, 2023, the company further reduced the minimum requirement from 50,000 Robux to 30,000 Robux. These reductions in the minimum amounts required incentivize its developer and creator community, and promote the long term growth and health of such community. For the year ended December 31, 2023, over 12,000 developers and creators actually exchanged their earned Robux for real-world currency through the company’s Developer Exchange Program. For the same period, there were over 3,500 developers and creators that earned the equivalent of $10,000 or more in Robux and over 750 developers and creators that earned the equivalent of $100,000 or more in Robux.

The company invests in its developers and creators by providing a comprehensive set of free tools and services through Roblox Studio, the Roblox Open Cloud, and a range of other creator resources that enable them to easily build, publish, analyze, grow, and monetize experiences. The company empowers developers and creators to get started with minimal upfront costs as it covers hosting, storage, customer support, localization, regulatory requirements, payment processing, and platform fees. The company provides appropriate support for all developers and creators to ensure engagement and growth in its developer and creator community. This includes managing and moderating the company’s online developer and creator forums and operating special programs for aspiring and top developers and creators such as its annual Roblox Developers Conference. With Roblox Open Cloud, developers and creators can leverage a suite of backend APIs to seamlessly build and scale their experiences.

Products and Technology

The Roblox Platform is the underlying technology and infrastructure that supports shared experiences and consists of three elements:

Roblox Client—The free application that allows users to explore 3D immersive experiences.

Roblox Studio—The free toolset that allows developers and creators to build, publish, and operate 3D immersive experiences and other content accessed with the Roblox Client.

Roblox Cloud—The services and infrastructure that power the Roblox Client and Roblox Studio.

The company’s technology supports the following key characteristics of the Roblox Platform: Identity, Social Communication, Immersive, Low Friction, Variety of Content, Anywhere, Economy, and Safety.

Identity

The Roblox avatar system allows users to create and personalize their unique 3D identities. The company’s avatar technology supports a wide variety of character styles, ranging from classic avatars with blocky body shapes, to ones with more human proportions, from anime characters, to fantasy avatars, and more. Recently, Roblox introduced avatar animation, which mirrors a user’s movements and facial expressions on the avatar in real time, allowing more interactive and authentic communication.

The Roblox Client features the Avatar Editor, which enables users to manipulate the size and body shape of their avatars, as well as equip their avatar with clothing, gear, animations, simulated gestures, or emotes, and other accessories from the Marketplace. The company’s avatar system allows users to attach practically any accessory to any avatar maximizing the combinatorial variety of avatar configurations supported by the Platform. Users manipulate their avatar through a consistent set of controls for emotes, basic movement, and tap-to-move functionality which adapts to dynamically changing virtual environments. The Roblox Client normalizes camera and avatar control inputs from different device form factors, including mobile, tablet, desktop, and game console, to simplify the process of building multiuser, multiplatform, and avatar-based experiences.

Social Communication

The Roblox Client allows users to easily connect with real life friends (through features such as contact importer) and meet new friends (by matching users with similar characteristics, such as country location, for example). The social graph created by these connections is stored in the Roblox Cloud and requires mutual opt-in to avoid unwanted communications.

The social graph is central to human communication and connection. When a user chooses to join an experience, the Roblox Cloud is designed to automatically place that user into the same virtual environment as others connected through the social graph. In addition, most developers allow users to purchase private servers that allow groups of friends to share an exclusive, invite-only instance of a 3D immersive experience.

The company is building an immersive platform for communication and connection that has safety and civility at its foundation. The Roblox Platform supports text-based chat among users sharing the same 3D immersive experience and between users connected through the social graph. For safety, every text message passes through filters that block content, which violates applicable Roblox Community Standards (e.g. personally identifiable information, profanity, or offensive language). Using advanced pattern matching and machine learning, the company’s chat filters are constantly evolving and process billions of messages per day.

Recently, the company expanded its communication features through chat with voice in certain geographies, allowing users aged 13 and over to communicate using their voice in Roblox experiences. This proximity-based feature simulates realistic communication through lip sync and is based on how close users are in an experience to other users who are speaking in that experience. In addition, the recently introduced avatar animation allows all users to use their camera to animate their avatar with their movement, allowing them to communicate and express themselves in more natural, real-time, and immersive ways.

Further, users can connect through Roblox Connect, a way to communicate with another user within a 3D immersive experience. Either through the standalone Roblox Connect experience or within certain experiences that have embedded the capability behind Roblox Connect, people can call friends and have conversations as avatars together in a shared immersive space using voice and facial expressions.

Immersive

The Roblox Platform allows developers to build deeply immersive 3D environments where users can share synchronous experiences with others, independent of where they may be physically. The Roblox Client provides users with intuitive camera and input controls that are tuned for each device’s form factor. By abstracting these controls from developers, the process of building cross platform 3D immersive experiences is greatly simplified.

Developers use Roblox Studio to easily build 3D immersive experiences that are then rendered and simulated on the Roblox Platform. The Roblox Client leverages efficient low-level hardware-specific device APIs, such as Vulkan for Android devices and Metal for Apple devices, to efficiently render those experiences. Each experience combines thousands of meshes, textures, 3D models, and animations. Using Roblox Studio, developers can also insert immersive ad units into their environments, which are native and 3D structures, and include images and immersive portals.

Each 3D immersive experience is simulated in the Roblox Cloud with a custom physics engine built for rigid body and constraint-based physics. Using a combination of novel mathematical formulations and aggressive optimization, the engine can simulate a large number of complex mechanisms at high levels of fidelity. To achieve an optimal balance between latency, scale, and consistency, computations for the simulation are distributed across Roblox Clients and the Roblox Cloud.

Assets that make up the 3D immersive experience are stored in a persistent tree hierarchy that is the foundation for collaborative editing and interactive multiuser experiences. The hierarchy can be modified through APIs which serve as a powerful abstraction layer making it easy to create experiences that are consistent across all Roblox Clients, regardless of device type. During simulation, this data is dynamically replicated within the Roblox Cloud and selectively transmitted to Roblox Clients. The Roblox Client then constructs and renders its own view of the 3D immersive experience.

Low Friction

The Roblox Platform gives users the ability to interact with experiences almost instantly, on most popular client devices, and from anywhere in the world over existing broadband and cellular networks. As of December 31, 2023, the Roblox Client operates on iOS, Android, PC, Mac, Xbox, PlayStation, and virtual reality (VR) hardware, such as Meta Quest, and supports VR experiences on PC. With the Roblox Platform, developers can build an experience once and then expect that experience to operate consistently on all supported devices.

The Roblox Client is designed for the rapid movement of users between experiences. Almost immediately upon launching a new experience, the Roblox Client will begin simulating and rendering the virtual world using a partial representation of the environment at a low level of detail. As more and higher fidelity assets are received by the Roblox Client, the fidelity of the experience automatically improves.

Assets are delivered to the Roblox Client through geographically distributed content delivery networks. The Roblox Cloud determines the format, level of detail, and priority of each asset sent in order to optimize for the capabilities and bandwidth available to the client device. For large experiences, the Roblox Client can dynamically purge unnecessary assets from device memory, ensuring that a single large experience can be experienced simultaneously on different devices regardless of device memory capacity.

The Roblox Cloud is central to enabling low-latency, responsive interactivity within 3D environments having millions of concurrent users. When a user joins a 3D immersive experience, the Roblox Cloud assigns that user to a particular game instance based on, among other considerations, the user’s social graph, geographic location, spoken language, and age group. When the number of users in a given experience increases, the Roblox Cloud automatically spawns additional server instances necessary to support additional users. The Platform optimally packs these instances onto physical servers and allocates compute resources based on the resource requirements of each instance. Developers can choose to allow up to 200 users within an instance, but may choose fewer to optimize their experience.

Developers have access to high-speed data stores in the Roblox Cloud where information about users and each simulated environment can be persisted. This, along with other services hosted in the Roblox Cloud, make it possible for a developer to build, launch, scale and monetize a 3D immersive experience without any additional tools or services.

The majority of services operated by the Roblox Cloud are hosted in Roblox managed data centers. For some of the company’s high-speed databases, scalable object storage, and message queuing services it leverages Amazon Web Services. All servers tasked with simulating the virtual environment and optimizing assets for Roblox Clients are owned by Roblox and operate from data centers and regional edge data centers widely distributed across 19 cities in North America, Asia-Pacific, and Europe. As of December 31, 2023, the Roblox Cloud used over 140,000 servers. The Roblox Cloud is designed to be fault tolerant and prepared for disaster recovery and it continues to expand into multiple data centers within and across geographic regions to improve reliability and fault tolerance.

Data centers in the Roblox Cloud are linked through a high-performance dedicated backbone network bypassing the public internet for server-to-server calls and the company operates under an open peering policy where it has direct interconnection with Internet providers globally. Operating the company’s own network maximizes performance and increases the immersiveness experienced by its users.

Variety of Content

Developers and creators build nearly all of the content for the Roblox Platform, including a variety of experiences from gaming, to education, to entertainment, and beyond. Their efforts contribute to an expanding content library that included over 13 million active experiences and millions of available Marketplace items during the year ended December 31, 2023.

Developers build, publish, and operate 3D immersive experiences with Roblox Studio, a free suite of tools accessible to all skill levels. Teams can work together using built-in access control management and collaborative editing. Once content is built, it can be replicated and shared across multiple experiences, giving developers the ability to scale their efforts and make rapid updates.

In addition to constructing 3D objects and environments, developers can script complex behaviors into their experience with Roblox Luau. Based on Lua, an interpreted light-weight programming language popular in the gaming industry, Roblox Luau adds an optional static type system and a highly optimized interpreter that maximizes performance on Roblox Clients and in the Roblox Cloud. Using scripts, developers can modify the environment, control object behavior, and create new ways for users to interact with the virtual environment. Within Roblox Studio, developers have access to a powerful script editor which supports autocomplete, debugging, and the ability to emulate the Roblox Client running on supported devices.

Roblox Studio also leverages artificial intelligence (AI) to help reduce friction for creators and developers, making it easier to build content on the Platform. These AI tools help developers and creators with varying levels of experience. For example, AI tools help beginner developers and creators with no coding experience by answering common questions, while AI tools, such as Code Assist or Materials Generator help developers and creators with minimal coding experience learn how to write and improve code and create more complex materials.

Creators can share their work with other creators through the Creator Store. The Creator Store drives collaboration within the company’s developer community, accelerates creation of new experiences, and provides additional ways for creators to monetize their work. As of December 31, 2023, the Creator Store contained millions of models, meshes, textures, scripts, audio clips, developer tools, and packaged combinations of these items.

The company provides developers with reference material, tutorials, community forums, and analytics to build their creations. Creator Hub includes reference material, API documentation, and tutorials for developers. Developer Forum is a private forum for qualified developers which provides insight on new features, community initiatives, recruitment opportunities, bug reporting, and direct engagement with the company’s employees. Edu Hub provides content for educators, students, and parents who are using Roblox as a tool to learn coding, 3D design, and digital civility. All developers on the Roblox Platform have access to dashboards that show daily visits to their experience, as well as earned Robux generated from their experience and Marketplace items.

Within the Roblox Client, users find experiences through personalized content recommendations and search. Recommendations are based on past user behavior, the social graph, and demographic information collected at signup. An emphasis is always placed on experiences where someone is connected with is present. The search engine automatically learns user intent, accounting for misspellings, slang, and multilingual queries.

Anywhere

The Roblox Platform serves a global audience. In the year ended December 31, 2023, developers from over 180 countries and users spanning over 190 countries accessed the company’s Platform.

Localization and compliance systems embedded within the Roblox Client and Roblox Cloud help to lower cultural barriers and enable the company’s developers to meet regional requirements with little to no additional effort.

Developers can build experiences in their native language and then, using machine translation and advanced pattern recognition, the Roblox Cloud automatically translates those experiences into 16 languages including simplified Chinese, traditional Chinese, English, French, German, Indonesian, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Thai, Turkish, and Vietnamese. Developers also have the ability to customize all or part of their translations if needed.

To meet an evolving global regulatory environment, the Roblox Client can adjust a user’s experience and available content based on their age, device type, current location and where the client application was obtained. This allows Roblox to dynamically apply relevant content filters, anti-addiction rules, payment limits, and parental consent requirements.

Economy

Roblox has a vibrant economy built on a currency called Robux, which can be purchased through the Roblox Client and Roblox website or through prepaid cards purchased via online and physical retailers. Roblox works with multiple payment and prepaid card processors including Apple, BlackHawk, Google, Incomm, and Stripe, amongst others. Roblox relies on payment processor partners to store account information.

Users can also acquire Robux through a monthly subscription to Roblox Premium. With a subscription, users receive discounted Robux along with access to exclusive or discounted items in the Marketplace. Developers may also choose to offer additional benefits to active Roblox Premium subscribers in the form of discounted virtual merchandise or access to exclusive in-experience features.

Developers and creators earn Robux by selling virtual content or access to virtual content (including through subscriptions), as well as through the incorporation of immersive ads into their experiences, which are ad units that developers can insert into their experience for Roblox to programmatically serve ad content from advertisers. There are two immersive and native ad formats: image ads, which are static, non-clickable images within the 3D space of an experience and immersive portals, which are static, non-clickable images where the ad unit includes a door that teleports a user to the advertiser’s experience and back again. Developers can also earn Robux through Engagement-Based Payouts based on the share of time that Roblox Premium users engage in their experiences. Engagement-Based Payouts incentivize developers to invest in the engagement of their experiences. The payout system is designed to protect against fraud and computes a developer’s earnings potential on a daily basis.

Roblox allows developers and creators to convert earned Robux into the real-world currency of their choice through the company’s Developer Exchange Program. All Developer Exchange Program requests are reviewed on a risk-based approach to mitigate fraud and money laundering. Developers and creators participating in the program are required to create an account with the company’s third party vendor which collects tax information, ensures regulatory compliance, and executes the payouts. Additionally, developers and creators aged 13 and up can convert earned Robux into ad credits to purchase ads on the Platform.

Safety

Multiple systems are integrated into the Roblox Platform to promote civility and ensure the safety of the company’s users. These systems are designed to enforce its policies, protect users’ personal information, and abide by local laws. The company leverages text-filtering, content moderation systems, and automated systems to proactively identify behaviors that may violate its policies.

Content submitted by developers and creators, including images, models, audio, and video, goes through a multi-step review process before appearing on the Platform. Images are evaluated for Child Sexual Abuse Material using PhotoDNA with flagged images automatically reported to the National Center for Missing and Exploited Children. Audio files are scanned for IP infringement. Finally, all assets are subject to review by humans or AI trained on the company’s Community Standards. During the year ended December 31, 2023, including automated reviews, the company evaluated over 300 million assets. Assets refer to images, audio files, and video files that developers upload to the Roblox Platform to include in their experiences and in the Marketplace.

When experiences are published or updated on the Roblox Platform, they are evaluated by a suite of AI driven tools that identify problematic language, potential bypasses to the company’s safety systems, and content that falls outside its policies. A human review team is continuously operating to evaluate flagged experiences. The Roblox Platform includes a suite of anti-intruder technology leveraging machine learning, throttles, and circuit breakers designed to block automated bot attacks and mitigate the impact of humans who attempt to spam users and disrupt the service. The company also leverages targeted penetration testing, a bug bounty program, code reviews, secure by design principles, security testing, and vulnerability scanning to promote the security of the Platform.

Roblox operates a customer service portal that provides self-help information along with ways to contact Roblox via email or from within the Roblox Client. In the year ended December 31, 2023, Roblox responded to millions of customer inquiries and had a human respond to actionable safety issues on average within 22 minutes of their submission.

Safety and Digital Civility

The company aspires to build a safe and civil online society. The company has no tolerance on its Platform for content or behavior that violates its Community Standards. Safety and civility systems are built into its Platform and apply to every experience. In many instances, the company systems extend beyond minimum regulatory requirements.

The company’s Platform is designed to comply with the Children’s Online Privacy Protection Act (COPPA) and the General Data Protection Regulation (GDPR) regulations. The company works closely with regulators, authorities, and safety groups in many countries. The company endeavors to promptly report any suspected child exploitation or abuse materials to the relevant authorities.

The company partners with leading global organizations focused on child and internet safety, including the WeProtect Global Alliance, Digital Wellness Lab, Family Online Safety Institute, UK Safer Internet Centre, the Internet Watch Foundation, and kidSAFE, among others. The company is also a member of various organizations, such as the Association for United Kingdom Interactive Entertainment and the Technology Coalition, with a goal of cross-industry collaboration, knowledge and technology exchange in areas of user safety, and child safety. As a member of the Technology Coalition, the company is committed to providing transparency and promoting child safety online. The company continues to work diligently with other digital platforms to report bad actors and inappropriate content so that they can also take appropriate actions on their platforms.

Trust & Safety Systems

The company uses AI and a dedicated team of human moderators to review content, including images, sound, and video, uploaded into its Platform. The company’s scanning algorithms also review and monitor communications that flow through Roblox to block and protect users from inappropriate behavior, such as questions about personal information and instructions on how to connect on less protective third-party chat applications. The algorithms in the company’s chat filters are age-sensitive: they monitor both what users can say and see based on their ages.

Throughout its site and in-experience, the company provides its users with the ability to report activity that they find objectionable. Users can also block or mute other users with whom they do not want to interact. The company also provides parents with customizable parental controls to limit or disable online chat or to restrict access to a curated list of age appropriate experiences.

The company has a dedicated team and thousands of trust & safety agents whose role is to protect its users by focusing on detecting inappropriate content and behavior 24/7 through a combination of AI and human moderation. The company takes swift action to address any content or developer or creator that violates its terms of use once detected. The company has a Safety Advisory Board, made up of global industry experts that advise on the best practices to protect its community.

The company continues to invest in technology and people to combat bad actors who attempt to undermine its efforts to connect millions of people. The company’s priority remains the safety and digital civility of its community.

The Roblox Economy

The company supports its developer and creator community by providing the tools to build, publish, operate, drive discovery, and monetize content. The company’s economy enables developers and creators to generate income through Roblox. There were over 5.0 million developers and creators who earned Robux on the Roblox Platform in the month ended December 31, 2023. As of December 31, 2023, over 16,500 developers qualified for and were registered in the company’s Developer Exchange Program and therefore met certain conditions, such as having earned the minimum amount of Robux required to qualify, having a verified developer account, and having an account in good standing, and were therefore eligible to exchange their earned Robux for real-world currency. Of such developers and creators, for the year ended December 31, 2023, over 12,000 developers and creators actually exchanged their earned Robux for real-world currency through the company’s Developer Exchange Program. For the same period, there were over 3,500 developers and creators that earned the equivalent of $10,000 or more in Robux and over 750 developers and creators that earned the equivalent of $100,000 or more in Robux.

Business Model

When users sign up for Roblox, they can create an avatar and explore the vast majority of the company’s experiences for free, although the business model for any given experience is ultimately up to its developer. Most free experiences allow users to spend Robux by purchasing experience-specific enhancements. Users can also use Robux to obtain items such as clothing, accessories, and emotes from the company’s Marketplace or within an experience. Roblox retains a portion of every Robux transaction and distributes the rest to developers and creators. Robux have no monetary or intrinsic value outside of the company’s Platform and can only be converted to real-world currency through its Developer Exchange Program. The company is aware that some users seek to use unauthorized third-party websites to exchange Robux for real-world currency which is not permitted under its terms of use. The company regularly monitors and screens usage of its Platform with the aim of identifying and preventing these activities, as well as regularly send cease-and desist letters to operators of third-party websites offering fraudulent Robux or digital goods offers.

Consistent with the company’s free to use business model, a small portion of its users have historically been payers. For example, in the year ended December 31, 2023, of the company’s 68.4 million DAUs, only 852,000 represented its average daily unique paying users. Roblox also allows developers, creators, and brands to reach their audiences by purchasing ads. Further, Roblox offers sponsored experiences and sponsored avatar items, whereby developers and creators can pay to purchase ads to increase discoverability of their creations, which appear where experiences and items are discovered, including through search.

Growth Strategies

The company continually innovating the Roblox Platform, including making significant investments in high fidelity avatars, more realistic experiences, AI tools, and other social features, as well as more diverse opportunities for monetization. The company focuses on the following key growth strategies:

Roblox Everywhere: The company wants to give users the ability to interact with experiences almost instantly across the most popular client devices. As of December 31, 2023, the Roblox Client operates on iOS, Android, PC, Mac, Xbox, PlayStation, and VR hardware, such as Meta Quest, and supports VR experiences on PC. The investments the company is making will facilitate a high quality, intuitive experience for users across all devices, and enable developers and creators to publish once and instantly on all supported devices across a global audience.

Platform for Everyone: As it expands the diversity of content, experiences, and communications that people can have on Roblox, there is significant potential to increase the company’s penetration and engagement across all demographics. The company is also looking to continue expanding new verticals, such as brand partnerships, education, and communication.

International Expansion: There is significant potential for the company to grow the global reach of its Platform. Some of that will occur by the same organic, word of mouth user, creator, and developer growth that the company has seen in markets like the U.S., Canada, and the United Kingdom. In addition, the company is investing in technology that will also enhance its growth around the world.

Vibrant Economy: There is significant potential to increase monetization on the company’s Platform and it is constantly investing in new ways to empower its creator community. First, the company is actively working with its developer and creator community to help them improve their monetization. Second, Roblox Premium, the company’s subscription service, will increase its conversion of its free users to paying users and the retention of its paying users. Third, the company expects to continue working with leading brands to build unique commerce opportunities and help them reach their audiences at scale within Roblox experiences through immersive ads. The company’s immersive ads system is designed to be native to the experience in which it is placed and will provide unique commerce opportunities for brands on the Platform. Immersive ads also provide developers and creators with another monetization method on the Platform.

Brand and Marketing

The company has millions of experiences to choose from on Roblox, and developers continue to build new experiences on the Platform and publish them daily. As experiences on the Platform grow in popularity, this success accrues to the Roblox brand and serves to draw in new audiences. The company’s approach is to amplify these experiences on both earned and owned channels which builds awareness and affinity for Roblox. This approach includes educating the company’s creators, users, and brands on the Platform’s capabilities and innovations, all of which elevates each stakeholder’s experience.

The company operates a highly efficient marketing model. The company’s approach is highly organic, with its user, creator and developer adoption driven by mutually reinforcing content and social network effects. The company also leverages its influencer community to increase brand awareness and its reach across all age demographics. The company has invested heavily in creating a safe and civil platform, which has allowed it to both grow and retain its user base.

Seasonality

The company has historically experienced seasonality in monetization on its Platform and tend to generate higher levels of bookings in the fourth quarter (year ended December 31, 2023) of the year primarily due to the end-of-year holiday season. The company also typically sees higher levels of engagement in the months of June, July, and August, which are summer periods in the northern hemisphere, and lower levels of engagement in the post-summer months of September, October, and November.

Intellectual Property

As of December 31, 2023, the company owned more than 160 U.S. patents relating to aspects of its actual or contemplated operations and technologies. The company’s issued patents are scheduled to expire between 2025 and 2041. The company also had more than 250 pending patent applications in the U.S. and abroad.

The company has registered Roblox, Robux, and its corporate logo as trademarks in the U.S. and other jurisdictions. In total, the company is the owner of over 453 trademark filings and have over 39 trademark applications in the U.S. and foreign countries as of December 31, 2023. As of December 31, 2023, the company is the registered holder of over 1,700 domestic and international domain names. The company continually monitors the registration of its domain names, trademarks, and service marks in the U.S. and in certain locations outside the U.S.

Competition

The company competes for users and their engagement hours with global technology leaders such as Amazon, Apple, Meta Platforms, Google, Microsoft, and Tencent, global entertainment companies, such as Comcast, Disney, and ViacomCBS, global gaming companies, such as Activision Blizzard (now owned by Microsoft), Electronic Arts, Take-Two, Epic Games, Krafton, and Valve, online content platforms including Netflix, Spotify, and YouTube, as well as social platforms, such as Facebook, TikTok, Instagram, Pinterest, X, Reddit, Discord, and Snap.

The company competes for users and their engagement hours with global technology leaders, such as Amazon, Apple, Meta Platforms, Google, Microsoft, and Tencent, global entertainment companies, such as Comcast, Disney, and ViacomCBS, global gaming companies, such as Activision Blizzard (now owned by Microsoft), Electronic Arts, Take-Two, Epic Games, Krafton, and Valve, online content platforms including Netflix, Spotify, and YouTube, as well as social platforms such as Facebook, TikTok, Instagram, Pinterest, X, Reddit, Discord, and Snap.

The company competes for developers and creators and engineering talent with gaming platforms, such as Epic Games, Unity, Meta Platforms, and Valve Corporation, who provide developers and creators the ability to create or distribute interactive content.

Regulation

The company relies on a variety of statutory and common-law frameworks and defenses relevant to the content available on its service, including the Digital Millennium Copyright Act (DMCA), the Communications Decency Act, and the fair-use doctrine in the U.S., and the Electronic Commerce Directive in the European Union (EU).

History

Roblox Corporation was founded in 2004. The company was incorporated under the laws of the state of Delaware in 2004.