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.

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