Specialist
Former Director at Roblox Corp
Agenda
- Roblox's (NYSE: RBLX) operating environment – post-coronavirus DAU expectations and engagement trends
- Growth drivers – ageing up demographics and international expansion in China, LATAM and India
- Non-gaming opportunities to drive broader ecosystem of digital co-experience and competitive dynamics
- Outlook for Q4 2021 and beyond – metaverse trends to monitor, developer revenue share and churn risks
Questions
1.
Roblox’s social gaming community has experienced engagement tailwinds from work-from-home and social distancing amid coronavirus. How long-lasting could those fully engaged dynamics be across DAU growth, hours engaged and bookings per DAU? Could there be a new normal where those high levels falter or is this a permanent step change?
2.
APAC already represents 20% of total DAU and is growing at 89% YoY, but the biggest headwind seems to be time restrictions on younger users in China. How do you assess China within the APAC growth area and are you worried about continued regulation in the country dampening Roblox’s opportunity?
3.
Do you expect Roblox to be successful in China if it takes a more developer-led, education-first model? What’s your degree of confidence that Roblox has a meaningful presence in China five years from now?
4.
You described LATAM as a large market but is that mainly from Brazil? What is the respective DAU opportunity?
5.
How do you assess the potential bookings per DAU profile in areas such as India and LATAM, factoring in streaming video-on-demand as an adjacency for paid content? It’s below USD 3 per year at best in India, some of it’s below USD 1 per year. How much could this weigh down the bookings per DAU for the business, especially given the prospectively meaningful user base? Is this a big reason why Roblox is yet to move into these regions?
6.
I think the more popular recent press around Roblox was the high-profile outage that occurred around Halloween. To what extent could this cause engagement to drop off? Is it a temporary blip that the company is working through? Is this something we should monitor closely as a future issue beyond a medium-term engagement drop?
7.
Are you confident in Roblox’s ability to maintain the necessary infrastructure investments as its user base scales and the amount of hours spent concurrently scales? How long-term an issue could outages be and how confident are you in the company’s ability to manage them?
8.
Is Roblox successfully ageing up? We talked a lot about the under-13 demographic, but the majority of the DAU base is now over 13 and the fastest-growing segment is 17-24. What challenges remain to doing this sustainably and is ageing up positive for the business in the long term?
9.
What are the shortcomings of the Roblox platform around developing games with greater resonance? It seems that moving into the 17-24 age group and beyond will make the platform more interesting to professional gaming studio developers. Could Roblox move into the Unity or Unreal Engine competitive landscape? Is that what it takes to age up sustainably?
10.
How difficult is it to be the best of both worlds between democratising the young developers and resonating with more tenured users simultaneously? Can Roblox start licensing its development code and compete head on with Unity, or is this something where Unity and Unreal might mostly maintain the aged-up developer?
11.
How could Roblox’s DAU develop over the next 3-5 years given the international outlook, ageing-up dynamics and increasing efforts to attract professional developers? Could it double or triple its 47 million DAU? You seem to think there are obstacles to the company reinvigorating from the saturation point it may be at, especially in more-tenured regions.
12.
Could immersive digital co-experiences outside of gaming increase bookings per DAU? However, a higher proportion of international users could drag this metric down though. How will the two trends balance?
13.
Who are Roblox’s largest direct competitors and what are they trying to achieve in getting the greatest time-share of users in immersive experiences? A handful of players seem to be competing for this opportunity, including Unreal, Meta and even Unity, to an extent that it’s partaking in making the experiences more immersive.
14.
What’s the risk of developer churn vs payout ratios getting less attractive for Roblox to retain developers, given the platform’s orientation towards user-generated content? We’re sitting at 20-25% payout ratios, whereas Manticore has 50% payouts. Do you consider 20-25% fair to developers given the effort that goes into their games?
15.
What would you say is the goal of the metaverse? How could it evolve over the next 5-10 years?
16.
How many on-ramps or separate worlds are you picturing in the metaverse? How much need for persistence is there if this consolidates down to fewer players? Which players could become metaverse worlds in the longer term?
17.
Why isn’t Facebook a front runner given its three billion DAU, including from Instagram? There’s a trust issue which I would characterise is more from an advertiser or congressional standpoint, but it seems the users resonate highly with the platform. Clearly that user base vastly exceeds Roblox or Fortnite’s, and presumably there’s an ability to develop core technology that’s more augmented reality and immersive – maybe not through Oculus, I agree with you that VR is clunky.
18.
How are you assessing the significant revenue potential facilitated by the metaverse vision? Could it be like Vans World, which replicates an advertising opportunity in a more virtual world? More time spent in the metaverse attracts marketers, and allows scope for avatars, virtual goods and the NFT [not for trade] element. How sizable is the revenue opportunity for metaverse in advertising and virtual goods currencies?
19.
Could NFTs be the biggest obstacle to further momentum because the digital assets need to be non fungible, despite any of the movements around platforms as well? How could this develop and is Roblox prioritising it in exploring how to drive up its virtual currency opportunities?
20.
Do you think openness will allow Roblox to resonate with artists and coders as we think about virtual goods creation? Many of the artist tools have incumbents, so could increased branding and broader virtual good opportunities be a benefit?
21.
Are you confident in Roblox’s management team to keep pace with trends given how quickly innovation moves for digital co-experience? What’s your best- and worst-case scenario for the company?
