Roblox Investor Day took place on September 15, and while the company demonstrated its commitment to attracting older audiences who have higher disposable incomes, it also showed how it planned to transform the company to get people to spend more money on the platform.
Due to its status as a public company, the sandbox game is under investor pressure to maximise company profits for shareholders. While the COVID-19 pandemic spurred engagement and spending within Roblox, the company has recently failed to reach projections on key metrics, which in turn has negatively impacted the company’s stock price and hurt investor confidence.
Roblox already profits from selling premium subscriptions and taking cuts of digital content sold and distributed on the platform. It also allows developers to monetise their games through in-game cosmetics and other items, typically collectables and game passes. As a result, many developers have incorporated loot boxes and pay-to-win mechanics into their games, which some people find ethically questionable. Regardless, even though the developers profit, Roblox also takes a significant cut, to the extent that even one of Roblox’s most prominent game developers has complained about the company’s rates. Roblox also makes money by allowing game developers to advertise their games on the platform.
However, during Roblox Investor Day, the company shared its vision for how it hopes to make even more money from users. Beyond the obvious move to increase revenue by engaging older audiences, Roblox also revealed various other monetisation strategies designed to increase the company’s bottom line.
Roblox touted its immersive advertising, which involves the sale of in-game billboards and portals that take players directly to specific branded experiences. As a monetisation strategy, this would help developers by allowing them to design virtual billboards within their game environments and sell billboard ads within their games, which brands could bid on, similar to how they do on Google or Facebook. However, the initiative is in its early stages, and it’s hard to tell whether it would open the door to low-quality advertisements or spammy ad practices within some games.
The company revealed it planned to customise what users see on their home pages based on their preferences. However, it also shared that it planned to incorporate data on how the player typically spends Robux, both in experience discovery as well as Avatar Shop items. While the intention behind this may be innocent, it also seems the company could be out to chase “whales.” Whales are players who spend a disproportionate amount of money on games relative to their peers. For many video games, these whales field a disproportionately large percentage of game revenue relative to the average player. Unfortunately, in some cases, whales are drawn in by a game’s gambling-like loot box mechanics, which means they’re also susceptible to spending more than they can realistically afford. Roblox could advertise games with high-cost items to those whales without regard for their well-being.
Many Roblox players are children, which furthers the notion that this monetisation strategy could present problems. While the company is taking steps to segment its player base between players 13 and older and those who are younger, it’s hard to know if this will be effective given Roblox’s struggle to shed its image as a kids’ game.
Finally, another revenue method involved brands using Roblox as a marketing tool. While major brands such as Gucci and Tommy Hilfiger are already finding ways to engage audiences on Roblox, the Roblox Investor Day presentation showed a vision of all major brands having a Roblox strategy, just as they might have a Facebook, Instagram, or TikTok strategy.
While this is an ambitious plan, it’s hard not to imagine a metaverse corrupted by data-driven advertising and in-your-face brand marketing. If not put into check, the company could risk becoming so profit-driven that it neglects what keeps its user base hooked. Roblox’s history of endorsing pay-to-win games and loot boxes means it may be susceptible to allowing companies too much freedom in their marketing practices, perhaps even contributing to harmful practices. Regardless, it’s unclear whether the older gaming audiences at stake here will be open to the types of advertising Roblox wishes to pursue.
While the strategy may ultimately be successful, it may come at the expense of hostile reception. Though Diablo Immortal, a game available for both PC and mobile platforms, faced backlash for its loot box mechanics, parent company Activision Blizzard still boasts substantial revenue from the game.
Regardless of the future, Roblox should be careful in how it chooses to address advertising and marketing for brands. Perhaps it will have to continue finding ways to offer avatar items for free, such as the items players can obtain with our Roblox promo codes list for September. It’s unclear how soon players will see these ad practices in the best Roblox games in 2022. But, if you’d like to listen to music in your games, don’t forget to visit our list of Roblox music codes for September to access hits from your favourite artists.