Innovation Monitor: Roblox, the theme park of the future
Welcome to this week’s Innovation Monitor.
The metaverse is something this newsletter has covered in a number of different ways. We’ve looked at MetaHumans, the future of gaming, and virtual influencers. Our edition on new virtual production techniques is relevant too. This week marked a milestone for the idea of immersive, virtual worlds as destinations rather than diversions with the Roblox IPO. Let’s dive into what is Roblox and why is it important.
The Roblox Corporation went public on Wednesday after being valued at $29.5B in January. However, some say its most impressive statistic was its developer payouts.
Last July game developer Joseph Kim spoke with Epic Games CEO Tim Sweeney on the type of economy the Metaverse would need to properly function and flourish. One of Sweeney’s main points was that a successful metaverse would need to be a platform for creators to make money:
“They say something is only a platform when the majority of the profit is made by creators rather than the company that built the thing right? [That’s the goal — as well as] figure out rules in an economy that protect consumers participating in the media, but also ensure that there’s robust competition in all spheres, so that the best creators can succeed and they can really profit.”
Roblox was already a huge hit when Kim published the interview, and was considered a prototypical metaverse. Community developers were paid $328.7M for their user-generated content in 2020, up almost 200% from 2019. According to CNBC, “more than 1,250 developers earned at least $10,000 in the digital currency Robux, which can be converted to cash. Over 300 earned $100,000 or more.”
In a February presentation, the company said it was planning to give even more money to developers “to incentive higher-quality content and fund bigger teams of engineers, designers, artists and producers.”
“What used to be a hobby has become a job for an individual person, and now is more and more becoming the foundation for large, incredibly creative studios who are emerging on our platform,” said CEO David Baszucki in the presentation.
This week, we’ll take a deeper look at Roblox and how it’s changing how we see games, social media, entertainment, the virtual economy, and even future generations.
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Erica Matsumoto Roblox: The Theme Park VC Matthew Ball made a great analogy in a recent dive into gaming platforms: “For decades, the only real way to experience a digital world with agency and an individual sense of self was to go to the theme park. Games have been on the cusp of these experiences for years, but in 2020, they’re well under way. These are ‘games’ like Minecraft, Fortnite, Roblox, to a lesser extent GTA Online, and Pokémon Go.”
Except this digital theme park is open to everyone everywhere, is COVID-proof, and hosts an infinite number of attractions. And like excellent theme parks and rides, the appeal lasts well beyond childhood:
“What’s more, these services are continually hitting new record highs (Roblox estimates it will hit 4B hours per month by 2023) and exhibiting incredible retention even as their users, the majority of whom are children, have exited and entered several life stages (e.g. tween, teen, young adult, independent adult).”
And while Disney and Universal have been able to “suck up third party IP” for their theme park moats, proto-metaverses like Fortnite, Minecraft, and Roblox “do the same with an even more expansive set that includes DC, Marvel, Star Wars Universes, the NFL, John Wick, and Nike-Air Jordan.”
Roblox: The Social Network
“Nineties kids came home from school and logged onto AOL Instant Messenger. In the 2000s, kids chatted with friends on Myspace and Facebook. Today’s kids hang out in Fortnite, Roblox, and Minecraft,” wrote VC Rex Woodbury in a recent dive into virtual platforms.
The kids who were chatting on AIM and message boards are now comfortably chatting in Slack and Hangouts with colleagues — in fact, they helped build them. The kids building games in Roblox and cities in Minecraft will be making apps for their workplace on low-code platforms.
As Ball wrote, “50% of kids 9–12 play Minecraft or Roblox in markets such as the United States, Canada, and Australia.” Their experience with virtual economies, digital social interaction, and world-building will help create and shape tomorrow’s businesses.
Roblox: The Microverse “In short, Roblox isn’t a game at all: it is world in which one of the things you can do is play games, with a persistent identity, persistent set of friends, persistent money, all disconnected from the device that you use to access the world. That is the transformational change.” — Ben Thompson
In his Roblox dive, Thompson describes the platform not just as an evolution in gaming (console games ⇒ networked games ⇒ in-app purchases ⇒ Roblox), but as a persistent world, a microverse: “Roblox games aren’t really competitive with non-Roblox games: they’re ‘worse’ in any sort of traditional sense, because the things that make them ‘better’ are the parts that are enabled by imposing constraints.”
But “worse” in what sense? If it’s graphics, that definitely not the defining factor for the new generation of gamers, contrary to what millennials expected as graphics improved to cinematic levels of quality on powerful consoles in the late 2000s and early 2010s. As Jordan Ugalde wrote in his Data Driven Reporting newsletter:
“The unassuming art style shown in the intro works in Roblox’s favor for this purpose. For people who’ve never considered making a game before, what feels more approachable, making a game that looks like the image on the left (Roblox) or the image on the right (Unreal Engine)…. Roblox is expanding the market of game developers the same way Nintendo expanded the market of game players.”
Roblox: Conclusion Today’s Roblox creators are tomorrow’s everything creators.
We’ll sign off today with an excerpt from Neal Stephensen’s novel Snow Crash, which popularized the metaverse back in 1992.
“Like any place in Reality, the Street is subject to development. Developers can build their own small streets feeding off of the main one. They can build buildings, parks, signs, as well as things that do not exist in Reality, such as vast hovering overhead light shows, special neighborhoods where the rules of three-dimensional spacetime are ignored, and free-combat zones where people can go to hunt and kill each other.
The only difference is that since the Street does not really exist — it’s just a computer-graphics protocol written down on a piece of paper somewhere — none of these things is being physically built. They are, rather, pieces of software, made available to the public over the worldwide fiber-optics network. When Hiro goes into the Metaverse and looks down the Street and sees buildings and electric signs stretching off into the darkness, disappearing over the curve of the globe, he is actually staring at the graphic representations — the user interfaces — of a myriad different pieces of software that have been engineered by major corporations.”
This Week in Business History March 11th, 105: Ts’ai Lun creates the first process for making paper that is suitable for writing
For this week’s business history we are going way back — yes, that is the year 105 A.D. Ts’ai Lun, a eunuch in the court of the Han emperor Hedi, created a process to create paper from the bark of mulberry trees, hemp, linen, and scraps of fishing net. In addition, Lun pushed forward the utilization of paper in official documents, rapidly spreading its acceptance.
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