Menu
Dimensino / Notes

Roblox Corporation – IPO Filing (Notes)

This post is part of an ongoing scrapbook series. Exploring the emerging Dweb (Web3) ecosystem, the #supportnet, and the coming ‘Metaverse’.


I mentioned Roblox in the last Dimensino entry on Permissive IPs.

I spent some time during the summer playing Roblox. I do wish it was on Switch. I haven’t played Mincraft since it was in beta. About 10 years or something. But you know.. I get it.

I was planning on writing at length about Roblox and the Metaverse at a later date – I may still.

However on Thursday night Roblox Corporation’s S-1 IPO filing dropped.

Freelance work is a little light. So in a fit of aggressive procrastination I read the whole document and took notes.

Instead of leaving them to languish in my Notion, I’m posting them below.

There are about 3k words of notes below plus 5k of quoted material. So I just went and found a free ‘autogenerate table of contents’ plugin. Using it here to see if I like it.

The headings to the left are named this way as much for my benefit to navigate ideas as they are for you to navigate the page.

If anyone is curious interested I’m wither going to embed this entire post in to a notion page. Or copy and paste it in. Haven’t decided yet..

Drop me a line on Twitter or get in touch if you wanna discuss anything of interest here. Happy to chat.

Roblox Corporation REGISTRATION STATEMENT

Crunch

Top line crunch figures are as follows:

  • Financial: $206 million of losses on $589 million in revenue for the 9 months of 2020, compared to $46 million in losses on $350 million for the same period 2019.
    • $292.6 million in Free cash flow for the 9 month period of 2020. Up from $6 million (crazy) in the 2019 period. Total FCF was $49.5 million for all of 2018 and 2019 combined.
  • Usage:  31.1 million DAU‘s, and 22.2 billion engaged hours during the first three quarters of 2020.
  • Investors: $335 million raised since its 2004 founding. Last raise was in February 2020 at a $4 billion valuation.

Fluff

The story of Roblox began in 1989 when our founders, David Baszucki and Erik Cassel, programmed a 2D simulated physics lab called Interactive Physics, which would later go on to influence our approach to building the groundwork for Roblox. Students across the world used Interactive Physics to see how two cars would crash, or how they could build destructible houses. In starting Roblox in 2004, we wanted to replicate the inspiration of imagination and creativity we saw in Interactive Physics on a much grander scale by ushering in a new category of human interaction that did not exist at the time.

It’s interesting that the founders come from a simulation background. I guess this says a lot about the sensibilities, grammars and mores that exist in the Roblox virtual environment – especially for creators. Useful to contrast/compare with Tim Sweeney who made a text editor to program a game and then ended up making a game out of the text editor itself. (ZZT)

Human Co-experience

An average of 36.2 million people from around the world come to Roblox every day to connect with friends. Together they play, learn, communicate, explore, and expand their friendships, all in 3D digital worlds that are entirely user-generated, built by our community of nearly 7 million active developers. We call this emerging category “human co-experience,” which we consider to be the new form of social interaction we envisioned back in 2004. Our platform is powered by user-generated content and draws inspiration from gaming, entertainment, social media, and even toys.

“Human Co-experience” is useful term? One that simultaneously feels immediately redundant. It’s very silicon valley marketing language.

The Birb site is also a Human Co-experience(?) Being in virtual environment (the psychic space of Twitter is a virtual environment fight me). I guess the thing that makes Roblox special as a Human Co-Experience is that its worlds ‘are entirely user-generated, built by our community’.

Actually, the more I use the words ‘Human Co-Experience’ the more I dislike it.

The Robloverse

Some refer to our category as the metaverse, a term often used to describe the concept of persistent, shared, 3D virtual spaces in a virtual universe. The idea of a metaverse has been written about by futurists and science fiction authors for over 30 years. With the advent of increasingly powerful consumer computing devices, cloud computing, and high bandwidth internet connections, the concept of the metaverse is materializing.

‘The Metaverse’. Wow! Page one!

Everything old is new again. The real challenge is to shape and manifest the Metaverse not as a cyberpunk fans wet dream but as a ‘real thing’. The Metaverse is a useful name in my opinion, despite its age it provides a break in the narrative from the word ‘Internet’. As does the Dweb.

I guess they are really selling the idea of the Robloverse. ‘Persistent, shared, 3D virtual spaces in a virtual universe’. The virtual universe in this case Is the PLATFORM owned by and controlled by Roblox. The 3D virtual spaces that Roblox are referring to I guess are ‘sub realms’ controlled by the developers and users of the platform.

I am deeply suspicious of the idea of a Metavere that is own and controlled by a single entity. I feel like the Metavere is going to emerge from interoperability between virtual worlds, some user owned and hosted, others probably corporate controlled, others a mix of ownership and governance forms.

Because of the embedded nature of users in the Metaverse (as a space for unfolding drama). I believe it will bleed in to the everyday so the definition of Metaveres provided by Roblox in this document is to shallow and unexpansive.

Key Characteristics

The Roblox Platform has a number of key characteristics:

 

Identity.    All users have unique identities in the form of avatars that allow them to express themselves as whoever or whatever they want to be. These avatars are portable across experiences.

 

Immersive.    The experiences on Roblox are 3D and immersive. As we continue to improve the Roblox Platform, these experiences will become increasingly engaging and indistinguishable from the real world.

 

Anywhere.    Users, developers and creators on Roblox are from all over the world. Further, the Roblox Client operates on iOS, Android, PC, Mac, and Xbox, and supports VR experiences on PC using Oculus Rift, HTC Vive and Valve Index headsets.

 

Low Friction.    It is simple to set up an account on Roblox, and free for users to enjoy experiences on the platform. Users can quickly traverse between and within experiences either on their own or with their friends. It is also easy for developers to build experiences and then publish them to the Roblox Cloud so that they are then accessible to users on the Roblox Client across all platforms.

 

Variety of Content.    Roblox is a vast and expanding universe of developer and creator-built content. As of September 30, 2020, there were over 18 million experiences on Roblox, and in the twelve months ended September 30, 2020, over 12 million of these were experienced by our community. There are also millions of creator-built virtual items with which users can personalize their avatars.

 

Economy.    Roblox has a vibrant economy built on a currency called Robux. Users who choose to purchase Robux can spend the currency on experiences and on items for their avatar. Developers and creators earn Robux by building engaging experiences and compelling items that users want to purchase. Roblox enables developers and creators to convert Robux back into real-world currency.

 

Safety.    Multiple systems are integrated into the Roblox Platform to promote civility and ensure the safety of our users. These systems are designed to enforce real-world laws, and are designed to extend beyond minimum regulatory requirements.

I like all of these characteristics. You can see where Verticals Of One would slide right in to a virtual world with these features.

The Dweb and Metaverse converge and share many of the same concerns: Identity, Content, Economy, Safety (Governance).

They are also characteristics and concerns of IRL.

Portals

Our Products and Technology

The Roblox Platform is the underlying technology and infrastructure that supports shared experiences for an average of 31.1 million daily active users. The platform is composed of three elements:

Roblox Client: The application that allows users to explore 3D digital worlds.

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

Roblox Cloud: The services and infrastructure that power the human co-experience platform.

Since our founding, we have invested heavily in building the Roblox Platform, and 79% of our employees are dedicated to maintaining, improving, and expanding it. Here is how our technology supports the key characteristics of the Roblox Platform:

I’m wondering if browsers (clients) will become more and more important to the Dweb ecosystem. I really like Brave’s wallet implementation and MetaMask works really well for other solutions. Beaker Browser is the portal to the DAT-verse.

Will we see browsers and VR client portals merge for users that are Verticals of One?
Will ‘clients’ be made up of interoperable tools like wallets, ID passports, etc that in their totality become a the Metaverse browser?
Each user with their own collection of tools they take with them on to the net/into the Metaverse?

Its also worth nothing that Roblox roll their own game engine. A key part of EPICss push towards materialising the Metavere is its Unreal Engine.

I don’t think the Metaverse will be one ‘place’. The thing that is persistent will be the myriad identities / masks we carry with us in to the various spaces. Both online and offline.

Economy

Roblox has a vibrant economy built on a currency called Robux, which can be purchased through the Roblox Client and website. Users can also acquire Robux through a monthly subscription to Roblox Premium. Developers and creators earn Robux by selling access to virtual content. Developers can also earn Robux by driving engagement of Premium subscribers through an engagement-based payout system. When Premium subscribers spend time in a developer’s experience, that developer earns a prorated share of the user’s monthly subscription fee. Engagement-based payouts incentivize developers to invest in the engagement of their experiences. Roblox allows developers and creators to convert earned Robux into the real-world currency of their choice through our Developer Exchange Program.

I mean sure. We are all familiar with in-game currencies. A friend bought their first bitcoin for Linden Dollar’s back in the day.

The Metaverse is going to be complex monetary fabric. Content created in Roblox isn’t unique. When NFT’s come to Roblox and ‘in realm’ currencies are owned and minted by the community then we’re talking true Metaverse. Right now Roblox calling it’s a Metaverse environment is basically calling a Nightmare a good dream.

I should note: I don’t think that Dweb Monetary Fabrics of the Metaverse will ever manifest or bother IRL economics too much. Inflation in online virtual spaces is well documented (Diabolo 3, Gaia Online etc). Thats why Dweb innovations like bonded curves are so important.

It will be interesting to see how a fabric of monetary instruments play out.

? Universe(al) marketplaces like FTSE, DOW JONES NASDAQ etc?

No Governance

Safety and Digital Civility

We aspire to build a safe and civil online society. We have no tolerance on our platform for content or behavior that violates our rules. Safety and civility systems are built into our platform and apply to every experience. In many instances, our systems extend beyond minimum regulatory requirements.

Our platform is designed to comply with Children’s Online Privacy Protection Act and GDPR regulations. We work closely with regulators, authorities, and safety groups in many countries. We endeavor to promptly report any suspected child exploitation or abuse materials to the relevant authorities.

We partner with over 10 leading global organizations focused on child and internet safety. We are also a member of various organizations with a goal of cross-industry collaboration, knowledge and technology exchange in areas of user safety and child safety. We continue 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.

Honestly now read the whole article. I’ve looked and I can’t find any plans by Roblox to implement any kind of official or formal community governance.

As I said earlier I am deeply suspicious of the idea of a Metaverse that is own and controlled by a single entity.

At the very least users should have some control and say in whats going on. Eve Online’s ‘Council of Stellar Management‘ is a model that platforms in this so called ‘Human Co-experience’ space should be looking toward and implementing from day one.

What is the CSM?

The Council of Stellar Management is a player advocacy group, consisting of 10 members democratically elected by the players to advise and assist CCP in the continuous development of EVE Online. The CSM brings focused and structured feedback from the community to CCP and represents their views and interests.

The role of a CSM member

The role of a CSM member is to represent the players in the ongoing development of EVE Online by providing analysis, sharing suggestions, and giving feedback based on the ongoing community discussions and concerns to CCP. As an elected representative, a CSM member will have clear communication paths with CCP and a chance to influence the development of EVE Online many times during their term.

As DAOS etc become more advance and implement Loomio style governance for themselves (for example). These DAOs will plug in to Metaverse CSM style formal governance between users and platform operators seamlessly.

As I mentioned last year:

prototyping the consensus process, ideation, discussion, amendment, voting, etc. of an organisation is a much more interesting design space for small organisations than anything that touches the blockchain. He went on to say on Twitter that Rapid prototyping of organisational decision-making processes can *literally* be done on the whiteboard, paper prototype, or in instant message channel. It’s insane that teams spend years building end-to-end crypto project management apps or DAOs before they test out the most important part.

Governance protocols embedded in digital tools is IMO the single most important exploration happening in the Dweb right now. When these systems/tools mature and become commonplace in things like slack/discord/whatsapp/DAOs/indiegames it will become unthinkable and untenable to users that governance is not an embedded part of the monolithic platforms they use. If there is no governance users will go elsewhere. (see the roll out of unpopular features like fleets on twitter vs things like the ETH 2 launch process)

Freedom 0

We depend on effectively operating with mobile operating systems, hardware, and networks that we do not control; changes to any of these or our platform may significantly harm our user retention, growth, engagement, and monetization, or require us to change our data collection and privacy practices, business models, operations, practices, advertising activities, or application content, which could restrict our ability to maintain our platform through these systems, hardware and networks and would adversely impact our business.

For the nine months ended September 30, 2020, 34% of our revenue was attributable to Robux sales through the Apple App Store and 18% of our revenue was attributable to Robux sales through the Google Play Store, and during the same period 68% of our engagement hours on the platform were from users who signed up through the Apple App Store and Google Play Store.

Interesting.

So many people are playing on Mobile devices that Roblox sees the hardware/platform monopoly and lockin as a risk significant enough to mention in their IPO.

For operations through the Apple App Store and Google Play Store, we are obligated to pay 30% of any money paid by users to purchase Robux to Apple and Google and this amount could be increased. These costs are expected to remain a significant operating expense for the foreseeable future. If the amount these platform providers charge increases, it could have a material impact on our ability to pay developers and our results of operations. The providers of an operating system or application store may also change its fee structure, add fees associated with access to and use of its operating system, alter how its customers are able to advertise on their operating system, change how the personal or other information of its users is made available to application developers on their operating system, limit the use of personal information for advertising purposes or restrict how end-users can share information on their operating system or across other platforms.
Accordingly, future changes implemented by Apple or Google could adversely impact our revenue. In addition, these operating systems and application stores could change their business models and could, for example, increase application store fees, which could have an adverse impact on our business. There are currently litigation and governmental inquiries over the application store fees, and Apple or Google could modify their platform in response to litigation and inquiries in a manner that may harm us.

They also bring up all the various ongoing lawsuits etc I imagine that Roblox is on the side of EPIC in all this (another key player in the future of the Metaverse) in their multiple ongoing lawsuits

If our business becomes constrained by changing legal and regulatory requirements, our operating results will suffer.

Co-Creation

The widespread availability of content generated by our developers and creators on our platform is a newer development and the regulatory framework for broad dissemination of this content is new and evolving. We provide our developers and creators with the ability to publish their content throughout the world, and each country is developing regulations and policies to regulate this new space, including with respect to privacy, gambling, intellectual property, childhood protection, consumer protection, ratings, and taxes. If we are unable to allow developers and creators to comply with potentially conflicting regulations throughout the world, our ability to execute on our business model would be severely impacted, and our ability to grow our business could be harmed. Changes to these laws, regulations, standards, or obligations could require us to change our business model, take on more onerous obligations, and impact the functionality of our platform

This is really important.: companies, developers, institutions etc interested in the Metaverse and the opportunities the Dweb provides to build, co-create and share value IE environments with Permissive IPs should think about the following:

Think about drawing up User First policy documents, and perhaps forming an EFF like institution NOW to go to bat for users in the coming Metaverse. Otherwise, companies like Robolx, Niantic, Facebook, Google (maps) are going to lobby the shit out of our lawmakers to ensure we have no rights to anything in the Metaverse.

Bubble Universe

We depend on our developers to create digital content that our users find compelling, and our business will suffer if we are unable to entertain our users, improve the experience of our users, or properly incentivize our developers and creators to develop content.

Our platform enables our developers to create experiences and virtual items, which we refer to as user generated content. Our platform relies on our developers to create experiences and virtual items on our platform for our users to acquire and/or use. Our users interact with these experiences, which are largely free to engage with. These users can also elect to purchase virtual items through our Avatar Marketplace and in experiences that enhance their enjoyment. We believe the interactions between and within the developer, creator, and user communities on our platform create a thriving and organic ecosystem, and this network effect drives our growth. To facilitate and incentivize the creation of the experiences and virtual items by developers, our platform offers developers an opportunity to earn Robux, a virtual currency on our platform, in connection with their development work on our platform. When virtual items are purchased on our platform, the originating developer or creator earns a portion of the Robux paid for the item. Developers are able to exchange their accumulated earned Robux for real-world currency under certain conditions outlined in our Developer Exchange Program. If we fail to provide a sufficient return to developers, they may elect to develop user-generated content on other platforms, which would result in a loss of revenue. If we do not provide the right technologies or financial incentives to our developers, they may develop fewer experiences or virtual items, and our users may elect to not participate in the experiences or purchase the virtual items, and, thus, our platform, revenue, and bookings could be adversely affected.

Can imagine a situation where developers and users are flocking to various virtual worlds because they provide the best experience AND returns. Bubble Universe

Imagine if the DeFi explosion was happening but each instrument was actually a virtual world containing experiments in value return.

That user / industry group I mentioned needs to draw up some demands around interoperability sharpish.

Whales In Bubble Universes

We rely on a very small percentage of our total users for a significant majority of our revenue and bookings that we derive from our platform.

We generate substantially all of our revenue through the sales of our virtual currency, “Robux,” which players can use to purchase virtual items sold by our developer and creator community on the platform. Only a small portion of our users regularly purchase Robux through subscriptions and pay for experiences and virtual items compared to all users who use our platform in any period. We rely on our developers to develop engaging content where users elect to purchase digital items to enhance their enjoyment. If users fail to purchase digital items at rates similar to or greater than they have historically and if we fail to attract new paying users, or if our paying users fail to continue interacting with the platform and purchasing digital items as they increase in age, our revenue will suffer.

The audience for Roblox is listed as tweens and young people. ..

Who exactly are these Roblox Whales? Are they ok. I wonder if Robolx has any mechanisms to check in on users that spend a lot of time and money in their Virtual World.

This old 2013 Venture beat article on What it means to be a ‘whale’ — and why social gamers are just gamers is pretty interesting. I wonder what the spend numbers are like now for some of these people. The problems of people spending beyond their means in socials games is long established.

I wonder to what extent Roblox has a duty of care for users?

Especially as the Metaverse environments are more immersive and appealing than tap tap tapping on ones smart phone screen.

Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may significantly harm and negatively affect our reputation and our business.

Theres some interesting stuff in here on Metrics and data gathering. The document treats user privacy as a separate issue.

In my mind they are one and the same question/problem.

Plumbing

We rely on third-party distribution channels to facilitate Robux purchases by platform users. If we are unable to maintain a good relationship with such providers, if their terms and conditions change, or fail to process or ensure the safety of users’ payments, our business will suffer.

Purchases of Robux and other products (e.g., e-gift cards) on our platform are facilitated through third-party online distribution channels. We utilize these distribution channels, such as Amazon, Apple, Blackhawk, ePay, Google, Incomm, PayPal, Vantiv, and Xsolla, to receive cash proceeds from sales of our Robux through direct purchases on our platform. Any scheduled or unscheduled interruption in the ability of our users to transact with these distribution channels could adversely affect our payment collection and, in turn, our revenue and bookings.

LOL good relations with the people that ‘do the money’.

There is absolutely no net neutrality for financial plumbing.

As the Metaverse implements Dweb/DEX and this problem goes away. That is by and large the whole point of it.

Series Of Tubes

United States or international rules that permit ISPs to limit internet data consumption by users, including unreasonable discrimination in the provision of broadband internet access services, could harm our business.

In January 2018, the Federal Communications Commission, or FCC, released an order that repealed the “open internet rules,” often known as “net neutrality,” which prohibit mobile providers in the U.S. from impeding access to most content, or otherwise unfairly discriminating against content providers like us and also prohibit mobile providers from entering into arrangements with specific content providers for faster or better access over their data networks. The FCC order repealing the open internet rules went into effect in June 2018. In response to this decision California and a number of states implemented their own net neutrality rules which largely mirrored the repealed federal regulations. The U.S. Department of Justice has filed suit to bar implementation of these state laws

Speaking of Net Neutrality! It’s really positive to see this as a concern in their filing.

Thinking also of the apple/google lawsuits previously mentioned.

Potential Positions

We are subject to laws and regulations worldwide, many of which are unsettled and still developing which could increase our costs or adversely affect our business.

We are subject to a variety of laws in the U.S. and abroad that affect our business. As a global platform with users in over 180 countries, we are subject to a myriad of regulations and laws regarding consumer protection, including the use of gift cards, advertising, electronic marketing, protection of minors, data protection and privacy, data localization requirements, online services, data protection, anti-competition, freedom of speech, labor, real estate, taxation, intellectual property ownership and infringement, tax, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.

This is a good list of all the sorts of things that a Dweb/Metaverse user group should draw up policy and positions on.

In this section they go on to talk about the ongoing Loot Boxes (FIFA card packs were first implemented in like 2010?) as gambling and its need for regulation.

Seeing how bad the UK’s gambling regulation is in general, I can imagine Loot Boxes getting band becuse think of the children, but fixed odds machines in high street bookies being fine – for what ever reason?

Licence Battlegrounds

We use open source software on our platform and in connection with certain experiences on our platform, which may pose particular intellectual property risks to and could have a negative impact on our business.

We have in the past and may in the future continue to use open source software in our codebase and our platform. Some open source software licenses require users who make available open source software as part of their proprietary software to publicly disclose all or part of the source code to such proprietary software or make available any derivative works of such software free of charge, under open source licensing terms. The terms of various open source licenses have not been interpreted by courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our use of the open source software. Enforcement activity for open source licenses can also be unpredictable. Were it determined that our use was not in compliance with a particular license, we may be required to release our proprietary source code, defend claims, pay damages for breach of contract or copyright infringement, grant licenses to our patents, re-engineer our games or products, discontinue distribution in the event re-engineering cannot be accomplished on a timely basis, or take other remedial action that may divert resources away from our game development efforts, any of which could negatively impact our business. Open source compliance problems can also result in damage to reputation and challenges in recruitment or retention of engineering personnel.

Interesting. Licences re-going to be a key battleground for the Metaverse. User generated content IS software.

Permissive IPs and the kinds of software licences that Dweb TOOLS and SERVICES are released under is going to need a lot of thought and support.

Business Model

Our Business Model

When users sign up for Roblox, they can create an avatar and explore the vast majority of our 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 purchase items such as clothing accessories and simulated gestures, or emotes, from our Avatar Marketplace. Roblox retains a portion of every Robux transaction and distributes the rest to developers and creators.

The filing goes on to say that the exchange rate is currently 1 Robux to $0.0035 as of September 30, 2020.

A rate determined by Roblox and is subject to change in its sole discretion.

BAD

How users purchase Robux

Users can purchase Robux in two ways, as one-time purchases or via Roblox Premium, a subscription service that is billed monthly and includes discounted Robux, access to exclusive in-experience benefits, exclusive and discounted marketplace items, and the ability to buy, sell and trade certain Avatar items. Roblox accepts payments through app stores, credit cards, and prepaid cards. The average price for a Robux for the nine months ended September 30, 2020 was $0.01.

For one-time purchases, users can purchase our virtual currency through various common channels including Apple App Store, Google Play Store, credit cards, prepaid cards, Microsoft app store, PayPal, and others. For the twelve months ended December 31, 2019, 30% and 18% of our revenue were generated on Apple App Store and Google Play Store, respectively. For the nine months ended September 30, 2020, 34% and 18% of our revenue were generated on Apple App Store and Google Play Store, respectively. For operations through both the Apple App Store and Google Play Store, we pay 30% of any money paid by users to purchase Robux to Apple or Google, as applicable.

So theres a pretty series imbalance in exchange rates depending way you are converting Robux.

Seems like a ripoff if you ask me.

How developers and creators earn Robux

We currently offer developers and creators four mechanisms to earn Robux:

sale of access to their experiences and enhancements in their experiences;

engagement-based payouts, which reward developers for the amount of time that Premium subscribers spend in their experiences;

sale of content and tools between developers; and

sale of items to users through the Avatar Marketplace.

As users purchase and subsequently spend Robux on Roblox, developers receive 70% of the Robux spent within their experiences and 70% of the Robux spent for items that appear in the Studio Marketplace. Creators receive 30% of the Robux spent for their items that appear in the Avatar Marketplace.

Nothing like working for scrip lads!

Don’t work for money, work for our scrip that we control the exchange rate for!

Also wow 70% fees on items made by creators in the marketplace seem … excessive?

Payment processing and other fees.    Payment processing and other fees primarily include payment processing costs charged by the primary distribution channels for our virtual currency. This is a large expense item for Roblox and we intend to use nearly all of any efficiencies earned in this area over time to increase earnings for our developers and creators. For the nine months ended September 30, 2019, payment processing and other fees were $111.2 million, or 24% of bookings, and grew by 185% to $317.1 million, or 26% of bookings, in the nine months ended September 30, 2020.

Seriously the visa/trad finance system is a racket.

No wonder companies are implementing their own internal settlement systems so they only need to touch trad finance ecosystem once or twice a day.

Beyond Entertainment

Hours engaged

We define hours engaged as the time spent by our users on the platform, which includes time spent in experiences, which refer to the titles that have been created by developers, and also within platform features such as chat and avatar personalization. Users are able to personalize the size and body shape of their avatars as well as equip their avatars with items acquired from the Avatar Marketplace, a marketplace that allows users to acquire items such as clothing, gear, simulated gestures, or emotes, and other accessories.

We calculate total hours engaged as the aggregate of user session lengths in a given period. We determine this length of time using internal company systems that track user activity on our platform, and aggregate discrete activities into a user session.

We believe that the growth in hours engaged on our platform reflects the increasing value of our platform. As we continue to invest in improving the Roblox Platform, and as the developers expand the number and quality of immersive experiences as well as other features on Roblox, we believe we will attract more users who spend more time and more Robux on our platform.

 

 

LOGO

Now this really gets to the heart of one of my questions about the Metaverse.

People only have so much time in the day.

The Metaverse is only going to ‘work’ if people see it as a place that has utility beyond entertainment.

Emerging Examples:

Branch

If I was Discord. I would acquihire this team immediately and also provide tools for Discords to co-design their own worlds.

Maybe interesting governance mechanisms could emerge if spaciality emerges within discord channels

I love all of these projects but as ARB from Trust said to me “You can create a whole world, any world, and they started with a 90’s open plan office???” lol

Gather.Town

Trust.Support‘s Gathering Space 

Lazerwalkers ‘MMO-like social space’

I prefer the low res work of Trust over Branch and Gather.town because it’s less about emulating IRL.

Why can’t I be a swirling vortex of texture and colour and sounding trumpets when I hang out with my colleagues?

The Casualverse

There is / are also limits on audience size.

If the Metaverse is to be persistent, online and in real time etc then why not assume that people will engage with it like they engage with something like Farmville? Casual relationships etc

The money in my bank account is also virtual, persistent and (hopefully) always there. But the value I place on it has nothing to do with the amount of time I spend logged into online banking.

What about Metaverse environments where the games play themselves? Simulation Gardening. Meta-Terrariums. Ian Cheng’s work etc.

What about the parts of the Metaverse that are built to be ephemeral? Rooms as UX metaphor.

If the Metaverse is going to have a fuzzy boundary with IRL as I assume it will. When I connect Nectar points at Sainsbury’s I want my Tarrarium ‘brand world’ to have more Nectar to feed my virtual menagerie of Metapets/cryptokitties or whatever.

LETTER FROM OUR FOUNDER

As I sit here writing this letter, I can’t help but reflect on the last 15 years and how they have gone by so quickly. It seems like only yesterday when Erik Cassel and I launched the first version of Roblox from a small office in Menlo Park. From the start, we imagined the possibilities of bringing people together through play. Our goal was to create an online community where people could do things together in virtual worlds. We hoped that by sharing experiences, our users would connect, learn, and have fun with one another.

This is a really nice letter. Better than some of the other garbage I’ve read. Twitter’s is fucking terrible.

It really is remarkable that Roblox has been such a long burn to get to where it is today. Given that Microsoft snapped up Minecraft for $2.5 Billion in 2014. And Epic was never acquired (but took a lot of investment) nor was Unity, I wonder how many other companies that are building the Metaveres there are that people are just…Sleeping on.

It’s worth keeping in mind that Roblox was created 3 years earlier than Minecraft and is way more ambitious in its vision.

We built Roblox from the start as a single platform, single name, single focus company that would someday support billions of users. The ultimate “product specification” was always to model reality, based on the belief that the more accurately we could simulate the real world, the more utility we could provide. Looking forward, we intend to maintain this focus as a single platform company, even as we expand the ways in which we enable people around the world to play, learn, and work together.

The idea that they were building a simulation tool really shines though in this paragraph.

It’s interesting also as simulating ‘the real world’ is the last thing I want from a persistent virtual world.

As long as its immersive I don’t really care if the geometry is euclidean or not.

Roblox Historia

A fundamental part of being human is connecting, sharing, and doing things together with others. There have been countless advancements in technology that have helped humans communicate as well as share stories across space and time. Communication probably started with sound (drums) and then progressed to mail, the telegraph, radio, the telephone, and video communication. Storytelling evolved from cave art to songs, the written word, photography, silent movies, and today’s 3D movies.

This is a very silicon valley take. There is so much to unpack about the assumptions in this one paragraph – I can’t even with it.

Technology has enhanced the ways we communicate and share stories, but historically it has been difficult to support “doing things together” at a distance. Thanks to several recent technological developments, we are beginning to see a convergence of communication and storytelling that is enabling co-experience, starting with multiplayer gaming over the internet. On Roblox, we expect people to engage in a vast range of activities, such as visiting ancient Rome, going to an awesome concert, or dissecting a simulated frog with others in an online classroom. We continue to take long-term bets with innovative engineering to improve the realism, fidelity, and intensity of how we interact online.

The assertions in the first half of this paragraph is quite frankly crazy cakes.

Honestly I don’t think STEM people should be in charge of building and administering virtual worlds.

The second half of this paragraph is made more interesting for its omission of the very thing it touts as a key part of its business.

People creating things. This all consumption.

No Governance Again

We recognized early on that building a safe and civil community was just as essential to our vision of connecting the world as were the engineering challenges we faced. One of our core values is “respect the community,” and this continually guides our approach to the trust we build into our platform. This is our most important priority, and it is why we have a stringent safety system we constantly improve and evolve. In our vision, metaverse platforms will connect people from different life experiences with new and interesting ideas. We believe these connections will help build empathy by safely immersing people in different perspectives, where they will hear diverse viewpoints. And someday, as the metaverse supports a broader range of positive educational and social experiences, we hope this can expand opportunities for all people around the world.

Cool bro, but there’s no concern here for community governance. There’s very little democracy in the real world no one wants to live under a Roblox reality dictatorship in the long term.

“In our vision, metaverse platforms will connect people from different life experiences with new and interesting ideas. We believe these connections will help build empathy by safely immersing people in different perspectives, where they will hear diverse viewpoints.”

Ahahahahah. Have you been on social media recently? Such Jokes. Users need a voice in the management of the platform.

Today, our creators range from first-time tinkerers to professional teams. We are pleased that much of the experiences they create are simply places to hang out and do things with friends, whether it is working in a restaurant or designing fashion outfits. Increasingly, our most popular experiences are social models of the real world, where one can go to high school or remodel a home. As the platform and the diversity of our users continues to expand, there will be plenty of opportunities for both hobbyists and professional studios.

I suspect that the reason these the most popular experiences on the platform are decorating and going to high school have something to do with the fact your user base are children.

Have you been on VR chat recently? all the best experiences are ones completely antithetical to the real world.

We ultimately hope the stories, avatars, and experiences our creators generate can become intellectual properties that will live well beyond Roblox. Our initial foray into toys and action figures, for example, is a way to bring the best of creators’ work into the real world. Someday, we hope there might be a movie based on one of the experiences (and characters) created on our platform rather than a “Roblox” movie.

How about offering opportunities for the users and creators to share ownership of these IPs and experiences?

When we talk about “creators” we do so in a general sense, because creating experiences on Roblox taps a broad range of skills. Our creator community includes people specialized in coding, 3D experience design, avatar and clothing design, sound design, community management, moderation, live ops, production, and business. We believe that experience creation will become a growing field of employment.

I agree.

We need to build the tools for these “creators” to do more interesting things with their value creation and just increase dwell time and buying and selling of Robux on your platform.

The plural of metaverses?

More than 15 years ago our co-founder Erik and I started with the vision of connecting the world, and today we see ourselves as stewards of this original vision. Futurists and science fiction writers have been imagining the metaverse for decades. As computing power, networking bandwidth, and human interface technologies improve, metaverses will become more and more pervasive. We feel lucky to be part of this evolution. And as we embark on our next 15 years, I look forward to the change that is inevitable as well as the things we feel will always be the same.

The plural of metaverses here is interesting. It has been more or less imagined as a single universe for over a decade.

The epic Metaverse vision is the Sweeneyverse.

In reality will we be stuck/siloed inside game engines?

Will I be allowed to take items with me from Unreal Metaverse into Roblox Metaverse?

What about my wallet of digital currencies?

This is why Verticals Of One are so important.

*Mumbles in Bratton*

Each of us will live our lives walking through the mist of multiple superimposed jurisdictional claims on any site. How we manage the final undecidability of sovereignities will characterize a good part of our legal, public identities: Rubik’s Cube passports.

BUSINESS OVERVIEW

LOGO

First, user-generated content, built by our community of developers and creators, powers our platform. As developers and creators build increasingly high-quality content, more users are attracted to our platform. The more users on our platform, the higher the engagement and the more attractive Roblox becomes to developers and creators. With more users, more Robux are spent on our platform, incentivizing developers and creators to design increasingly engaging content and encouraging new developers and creators to start building on our platform.

The incentives here are interesting. The drum I’m banging in Dimensino is that there is huge opportunity today to start prototyping mechanisms of systems to return value to users.

Participation as incentive

Steering well clear of more users = more scrip for developers.
Or in the case of social media more users = more eyeballs for advertisers. These business models should have no place in the future.

User Breakdown

During the nine months ended September 30, 2020, users spent 22.2 billion hours engaged on the platform, or an average of 2.6 hours per daily active user each day. Over the same period, our users explored an average of over 20 different experiences on the Roblox Platform per month.

LOGO

HAHA 54% of your users are under 12.

No wonder the most popular thing to do is pretend to be in high school.

What you going to do when these kids age up and start demanding rights?

They will be a generation that thinks governance tools in onlines spaces are normal. Many Zoomer discords already have informal voting systems etc.

You don’t have any kind of user governance nor plans to it in place? If you don’t have it by 2023 at the latest there will be trouble.

No one is earning anything really

For the twelve months ended September 30, 2020, over 960,000 developers and creators earned Robux on the Roblox Platform, of which there were over 1,050 developers and creators that earned $10,000 or more and nearly 250 developers and creators that earned $100,000 or more in Robux. On an engagement basis, for the twelve months ended September 30, 2020, there were over 1,300 experiences that generated at least one million hours of engagement per year and over 17,000 experiences that generated ten thousand hours of engagement or more.

Reward and Experiences Breakdown

 

 

LOGO

99% of creators on the platform earn’t nothing.

From memory 15% of active channels/creators on youtube meet requirements to join the partner program. 0o0 NEED TO CHECK THIS

I want to see the Metaverse as a place where 99% of users earn something for their participation.

Automated Accounts Payable

Roblox allows developers and creators to convert earned Robux into the real-world currency of their choice through our 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 Tipalti, our partner which collects tax information, ensures regulatory compliance, and executes the payouts.

Here’s an interesting Titbit.

Roblox platform uses Tipalti.

A platform that manages businesses suppliers, invoices, purchase orders, tax compliance, payments and billing and other accounting services from a single cloud platform.

It’s basically a platform that automates ‘Accounts payable’.

It also integrates in to most of the major accounting software like Xero, quickbooks etc. Tipalti lets companies run and track how payments are being made relative to actives within the organization. They currently have a 2billion dollar valuation. I’d invest if I could. It going to go way higher.

If I was building Dweb services I would integrate in to Tipalti. Or build a Dweb clone of it with all sorrts of interesting API/smart contract hooks for auditing etc.

Our developers and creators do not always cash out their Robux into real-world currency. Some choose to reinvest their Robux into developer tools from the Studio Marketplace, promote their experiences through our internal ad network, or spend the Robux as any other user would.

 

 

LOGO

This points to a strong ‘in world’ economy.

I’d like to see how much it costs to buy access to developer tool modules etc. Seems a bit unfair that people with lots of money get access to the ability to literally shape reality of others.

Values

Our Values

We have embraced five core values since we founded Roblox:

Respect the Community.    We put the needs of our community above our own.

Take the Long View.    We incorporate our long-term goals in every decision.

Get Stuff Done.    We have a bias toward action.

Self-Organize.    We define our own path, aligned by a shared vision.

Own It.    We own the outcome for which we are responsible.

Corporate Values fascinate me. They played a keep part in work that I did when I was still working at CEB and Gartner. Values are important mechanisms that orgs use to ensure they continue to learn from their mistakes and keep a common culture in a organisation throughout their operating lives.

I went back to see what else Roblox had written about their values

Roblox 2012 “What It’s Like to be Part of the ROBLOX Team”

Act like a CEO: We want everyone who works here to be invested in – even concerned about – their projects and ROBLOX’s future.
Self-organize: If you’re a CEO, you have to leverage self-organization to identify problems and come up with solutions. No one is going to breathe down your neck to keep things moving forward.
Get stuff done: As CEO, you need to exercise your smarts to get things done quickly.
Work hard: You don’t become CEO by being lazy.
Respect the customerCEOs have to respect the customer; that’s how they retain business and keep their company afloat.
Be inspiring to work with: CEOs need to be able to rally people and be part of the team.

Roblox 2017 Inside Roblox

  1. Inspire Others
  2. Work Hard
  3. Self-Organize
  4. Respect the Community
  5. Get Stuff Done

It’s interesting that Working Hard was dropped at some point between 2017 in favour for Own It.

Own It is a much better value in general, as accountability for ones actions is far more preferable than a demand for working hard. Get the work done.

Competition

Competition

We compete for both users, developers, and creators. We compete to attract and retain our users’ attention on the basis of our content and user experiences. We compete for users and their engagement hours with global technology leaders such as Amazon, Apple, Facebook, Google, Microsoft, and Tencent, global entertainment companies such as Comcast, Disney, and ViacomCBS, global gaming companies such as Activision Blizzard, Electronic Arts, Take-Two, Valve, Unity, and Zynga, online content platforms including Netflix, Spotify, and YouTube, as well as social platforms such as Facebook, Pinterest, and Snap. We are able to compete for these users based on our variety of content, personalized user experience, and various engaging and social features.

The list of competition here is interesting: Netflix, Facebook, Spotify, Snap etc

The rest of the document is all stock options, and technical options.


Well that was interesting. I generated some thoughts and ideas out of doing that at least. YMMV

NOTE: This post may contain a lot of buzzwordy jargon. I intend to build a glossary page linked off the Dimensino category home page soon.


Previous Post

Permissive IPs

Dimensino Category Cover

Next Post

Out Soon

Never Miss A Post

Sign up below or consider supporting the blog!
It’s just like paying for other people to read it.

Join 3,315 other subscribers.

Dimensino is an ongoing series subscribe if you want to follow along.
You’ll also get posts about my weekly 5min podcast, my webshow, and my weeknotes.

#SUPPORTNET

Please consider supporting my work with a regular contribution: Totally optional, but sincerely appreciated. Like paying for other people to read it.

I’m hoping to support recurring payments via ETH very soon. Once Dweb Memberships are wordpress compatible, I may consider exclusive content/keybase chat room etc.

Hire Me

If you would like to hire me to puzzle this sort of thing though for you in a professional capacity – Get In Touch!

About Author

Jay Springett is a Solarpunk, Theorist and Strategist for hybrid environments. His concerns are with culture, humans and technology and the environment. He is currently writing his first public book: Land as Platform.

No Comments

    Leave a Reply