Online Gaming Company Roblox Files for an IPO
Surging Revenue and User Numbers for Roblox
Demand for online gaming has surged during the pandemic, and many are eager to invest in the sector. Roblox, a gaming platform that allows users to make their own games and play games created by others, has filed to go public. It aims to begin trading before the end of the year along with several other high-profile tech companies like Airbnb and DoorDash.
Roblox’s third quarter revenue hit $242.2 million, a 91% leap compared to the same period a year ago. The amount of time users spent on the platform during the quarter ending in September, measured by a metric the company calls “hours engaged,” more than doubled to hit8.7 billion. Daily active users also jumped, reaching 36.2 million.
Roblox’s Business Model
Roblox’s business model is different from that of a traditional game publisher or developer. The company’s platform is free and games are created by users. Roblox makes money by selling currency called Robux which allows gamers to buy any number of perks within the games, from virtual pets to virtual clothing for characters.
The company is also growing beyond its original platform. During the pandemic, it began offering free, virtual concerts from high-profile artists like rapper Lil Nas X. These concerts have garnered tens of millions of views.
Keeping Young Gamers Safe
Though 2020 has been a remarkable year for Roblox, the startup is not yet profitable. Roblox lost $203.2 million during the first nine months of this year, and it lost $86 million last year.
The gaming company emphasized that safety and security on the platform is one of its top priorities. The majority of Roblox’s users are under the age of 13, and it wants to make sure that as it grows, its systems for keeping young gamers safe can keep up. Though the company hopes to become profitable soon, it wants to make sure not to cut costs for safety and security.
Earlier this year, Roblox was valued at $4 billion. The company has not yet announced its IPO price or how many shares it will offer through its listing, but it will trade under the ticker RBLX.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.