“Roblox is a wonderful community where people create together,” David Baszucki, CEO and co-founder of Roblox, said in an interview with CNN Business on Wednesday. Its stake in the company is now worth more than $ 4 billion.
It is a large and fast growing business.
Roblox generated revenue of nearly $ 925 million last year, up 82% from 2019. The company also said earlier this month that it now expects sales to rise another 60% this year to $ 1.44 billion by $ 1.52 billion.
At the end of 2020, Roblox had 32.6 million daily active users and the company predicts that by 2020 it will have 34.6 to 36.4 million.
The majority of the company’s players are children aged 13 and under. But Baszucki said the company is approaching a point where most of its players will not be tweens. He said the group of 17-24-year-old Roblox users is growing very fast.
But Roblox noted in his paperwork with the Securities and Exchange Commission that the fact that he has such a young user base could do more research into the platform.
“The increasing use of interactive offerings like ours by consumers, including younger consumers, could call for stricter consumer protection laws and regulations, which could impose additional burdens on companies like us,” Roblox said.
This means that Roblox must ensure that the game remains safe for minors who play it and that privacy practices are strictly enforced. The company also has precautions to ensure that younger users do not spend too much to buy Robux.
Baszucki says he is excited about the stock market debut, adding that it is good for long-term investors and employees at Roblox, which was founded in 2004, to participate financially in the company’s success.
Roblox listed shares directly on the New York Stock Exchange as opposed to issuing new shares in an initial public offering. The NYSE has set a reference price of $ 45 per share for the stock.
“To us, a direct listing seemed natural. It brings the whole community together and everyone uses the same price during the opening of the trade,” Baszucki said.
So what’s next for the company now that it’s publicly traded?
Roblox is still not profitable. It lost more than $ 253 million in 2020, compared to a loss or about $ 71 million a year earlier.
Baszucki said the company wants to generate more sales from advertising. He stressed that it will be organic. Users can, for example, pay to wear Nike shoes in the game as opposed to the large Air Jordan billboards in Roblox.
“The small amount of advertising we’ve done is engaging and authentic,” Baszucki told CNN Business.
Baszucki, whose own Roblox username is builder, added that he is not too worried that Roblox is a fad that will eventually suffer from popularity.
He noted that the game continued to add users, even though gamers had other choices such as Minecraft, Fortnite and the increasingly popular Among Us to play during their free time.
Later this year, more stock market debuts are also expected, with Instacart, Coinbase and Robinhood being the most popular new listings.