A Roblox Wealth Warning!
Is it the Roblox Investment opportunity gamers have been waiting for?
It’s not often another Google moment comes along.
And some are saying that that’s exactly what the Roblox investment opportunity is.
Two things to keep in mind:
“Great companies continue to grow in value.”
“The growth was there before and the growth will be there after.”
These comments seem particularly apt in the case of Roblox.
Roblox, the gaming platform, got really going in 1998. And it’s incredible popularity is because both younger children and teenagers can build their own games and virtual experiences.
Primarily aimed at younger gamers (such as the young chap above) it seems Roblox’s ‘hook’ is to catch children young and generate their interest (and cultivate addiction) so they’re ready to progress to (harder) gaming later on (meaning in teenage years).
The particular game the chap above is called ‘Bad Business’. It’s running around and shooting things (so immediately playable) and the developer of the game (only 20 years old or so) is a Roblox developer success story.
I appreciate this model may be unpalatable but on the plus side?
As a parent game playing has to have limits. Yes, gaming is addictive but as part of a balanced diet with other ‘real’ world experiences this ‘addiction’ can be managed.
If you watch the video you’ll also notice a reference to ‘girly games’. This isn’t being sexist.
There are games such as ‘Adopt me’ and ‘Make a Pizza’ which are more appealing to girls than simple shooting games which are more appealing to boys.
The Roblox Wealth Warning and Covid – 19
The pandemic had a very positive outcome for Roblox.
It’s estimated that players spent over 30 billion hours on the site in 2020!
So obviously, the lockdown has been good for business.
In tandem with this increased gameplay has been a rise in the use of Robux.
This is a virtual currency used in Roblox.
Gamers can use this to buy special items (such as outfits, weapons and musical instruments) within the games.
This translated into over $300 million in 2020.
Roblox (RBLX) listed on the NYSE in March 2021 and (at the time of writing( was trading in a range between $66 and $75 with a general base of $70.
This put Roblox’s valuation at around $38Billion!
Craig Donato, Roblox’s Chief Business officer has said the money raised by going public (and listing directly) will be used for further international expansion and developing more (and better) user experiences.
From an investor’s perspective this translates into more sales, more profit, more pie to chomp on.
Going forwards the recipe for success may be enhanced by further users developing content.
Becasue lets face it, without content Roblox would be nothing.
So, a win win as long as the content creation continues.
Roblox grew out of a physics related project.
On developing Roblox, Buzucki has said:
Seeing how kids lit up when they were creating things using our physics software made me think of what would be the ultimate platform for our imagination… It became clear to me that there was an opportunity to create an immersive, 3-D, multi-player platform in the cloud where people could imagine, create and share their experiences together.
I also found parts of an interview with David Buszucki from Wired magazine in 2013:
On what members got with monthly subscription:
Baszucki: Roblox is not only free to play, but free to build. We want all of our users to participate in content creation, whether they’re making avatar clothing, models, virtual worlds or hardcore games. Premium Builders Club memberships give users more flexibility in building and deeper access to our virtual economy. For instance, members can have more games and worlds open to players simultaneously, start their own personal building servers, create groups, sell their creations, trade virtual items and more. We also remove external advertisements and give members a daily stipend of Robux, our virtual currency.
On being a mobile player or desktop player:
Baszucki: One great feature of Roblox is all mobile players join the same game servers as desktop players, connecting users across devices in a shared virtual world. Barring the touch controls and reduced screen size, the in-game mobile experience is very similar to that of the desktop version.
Our mobile development team just wrapped up the official release of Roblox Mobile for iOS.
On safety of users (mainly children under the age of 12):
Baszucki: Above all else, everyone at Roblox is committed to member safety. We take every precaution possible to make sure kids are protected from inappropriate and offensive individuals as well as from indecent and distasteful content. We are a certified licensee of the TRUSTe Children’s Privacy Program, which has been approved by the Federal Trade Commission as an authorized safe harbor under the Children’s Online Privacy Protection Rule.
Free chat allows members to type their messages when communicating with other members. However, every message that is typed first goes through a sophisticated filter that blocks inappropriate words and phrases. Roblox’s adaptive filter also learns to decipher and catch codes or other methods that members might use to bypass the system. In the event that foul language slips through the filter, members have easy access to a “report abuse” feature.
We also have a team of moderators who are constantly reviewing chat logs and discussion forums, fielding abuse reports from members, and screening uploaded content files. These moderators — both Roblox employees as well as trusted members of the community — follow our zero-tolerance policy in regard to swearing and obscenities, messages and content of a sexual or violent nature, and any sort of aggressive or threatening communication. In the rare times when an incident does occur, the infringing member is immediately suspended or permanently expelled.
Roblox Wealth Warning
Whether you decide to invest into Roblox is up to you. If you’re unsure you need to seek financial advice.
The share price of Roblox can go down, in fact it could go to zero so there is a very big risk of you losing all of your money.
What are the chances of this?
If future regulation of claims against Roblox for somehow damaging health were to surface then yes Roblox could be in trouble.
But that will be way off in the future.
Like all technology it sucks. It sucks like Apple, sucks like Google and sucks like Youtube.
So many children around the world are glued to screens and having their brains manipulated.
But taking a reality check – it is what it is.
Roblox is well positioned to exploit the resources they have at their disposal and a target price of $450 per share is pencilled in for 2025.
Unless something as drastic as a pandemic unfolds.
Have a WealthXplosion