Kids Flock to Roblox for Parties and Playdates During Lockdown

(Bloomberg) -- In early March, Robby Scianna was supposed to take 10 friends to an escape room to celebrate his 10th birthday. Then his school closed, and his home town of Campbell, California, went into lockdown due to the coronavirus. So Robby had a virtual birthday party in Roblox instead.

The invitees logged into Google Hangouts first, where they chatted and sang “Happy Birthday.” Then all the kids jumped into Roblox for an hour or so and played Epic Minigames, an array of competitions featuring things like pet penguins and dodgeball. Much laughter and giddiness ensued. “It would have been better if we were able to do a real birthday party, but a virtual birthday party was still pretty fun,” Robby said.

Founded in 2004, Roblox serves up a vast universe of games. Its millions of offerings are built by its users, who also get a share of related revenue. Two-thirds of all U.S. kids between 9 and 12 years old use Roblox, and it’s played by a third of all Americans under the age of 16, according to the company.

With many kids and teenagers stuck at home with little to do, Roblox’s usage has skyrocketed in recent weeks. It has become a destination for virtual playdates and parties. On March 21, the company hosted its Bloxys ceremony, which honors game developers. Roughly 600,000 people showed up with their avatars to celebrate and socialize.

Virtual classes on Roblox are also booming. “You don’t have to worry about your kid being on YouTube all day—we got them,” said Ricky Bennett, vice president of innovation and partnerships at iD Tech Camps, which offers coding classes for kids. “We have hundreds of students that may not have been with us until summertime that are in Roblox now. It’s been an exponential growth curve in our online business.”

Dan Williams, a vice president at the company, said Roblox is hitting numbers it hadn’t expected to reach until late 2021. Recently, the number of monthly players has shot up to 120 million, according to the company, an increase of about 5 million users. The number of people playing together simultaneously has risen by 25%. Mentions of Roblox on Google just hit an all-time high, more than doubling “Bitcoin” references, according to tracker Google Trends. So far, thanks to tens of thousands of additional servers that the company added in the last 24 months, Roblox has been able to handle the surge, Williams said.

Roblox, which is free to use, generates revenue by selling a virtual currency called Robux, which players use to buy virtual goods like clothing for their avatars or magic balloons. More than 2 million people develop games on Roblox. They get a 50% cut of any related purchases. Roblox, which is closely held and based in San Mateo, California, doesn’t disclose its sales numbers.

Craig Donato, the company’s chief business officer, said revenue is growing and the company plans to use some of its current windfall to give more money to developers, and to donate to charities that feed kids. Last year, the site’s community of creators received $110 million, he said, up from about $70 million in 2018. “We have kids making millions of dollars a year on their games,” Donato said.

The company “harnesses user-generated content better than almost any other studio in the industry—giving creators greater agency and ownership,” said Yoshio Osaki, president of IDG Consulting, which focuses on gaming. “This is reinforced by the microeconomy within the game universe itself.”

In February, Roblox raised $150 million in a round led by Andreessen Horowitz. Greylock and Tencent Holdings Ltd. are also among its investors. The company doesn’t rule out the possibility of going public at some point, Donato said. But for right now, it’s focused on expanding globally. More than half of Roblox’s users come from abroad. Last year, the company made a push into France and Germany, and it’s hoping to enter China, via a joint venture with the Asian online giant Tencent.

Back in Campbell, California, 10-year-old Robby Scianna said that once the lockdown is over, he is looking forward to going out into the real world for ice cream with his friends. By then, their Roblox avatars will have earned a must-needed rest.

©2020 Bloomberg L.P.