16 ms·

Roblox is the biggest game in the world, but is unprofitable

466 points by mfiguiere 2y ago

amitlevy49 2y ago
reminds me of the path Minecraft could have taken - they also had a massive amount of community developers building servers, but instead of encouraging monetization and taking a cut, they banned it and cracked down aggressively Of course, unlike Roblox, Minecraft was profitable
- RockRobotRock 2y ago
  I appreciate how they left Java edition alone and chose Bedrock edition to dump all the MTX bullshit on.
  - HaZeust 2y ago
    For now.
    - RockRobotRock 2y ago
      i've been thinking that for 10 years. they forced msft accounts, which is annoying. other than that, hasn't been too bad
      - HaZeust 2y ago
        So they're empirically making progress towards it.
    - skeaker 2y ago
      That ship has sailed. People can and will just play on old versions if it comes to this. They already do for older versions that have better mod support.
  - zamadatix 2y ago
    MTX?
    - RockRobotRock 2y ago
      microtransactions
- Gigachad 2y ago
  What is the Minecraft online experience like these days? I only ever hear about people playing self hosted servers with friends. Are there still big servers with unique game modes kicking? Seems like it would be hard to keep sustainable
  - theshrike79 2y ago
    There are "Realms" that are essentially MS/Mojang hosted massive servers.
  - skerit 2y ago
    I've been running my own (not-for-profit, for people over the age of 21) server for the past 5 years. We're basically just a Vanilla+ server, we have no problems finding new people to join (thanks to /r/MinecraftBuddies)
    - xrd 2y ago
      My kids love Minecraft. They often run a curseforge mod (create?) and then open a port so they can play together inside the home LAN. But, I don't really understand how this works, and I would love to host it in a way that their cousins in another state could join. Do you know how I research this? I get a bit confused between the curseforge mods, the java edition. Should I start by downloading a JAR of the server and host it on a cloud server somewhere, and then firewall it off to only permit my NAT IP and the cousin's NAT IPs? At some point maybe I can run it all within a wireguard/tailscale network. How do I get started in my reading? I'm worried I'll get overwhelmed by reading /r/MinecraftBuddies, but perhaps that is a better place to ask?
      - password4321 2y ago
        This may be enough to get the ball rolling: https://blogs.oracle.com/developers/post/how-to-set-up-and-run-a-really-powerful-free-minecraft-server-in-the-cloud https://blogs.oracle.com/developers/post/how-to-set-up-and-r...
      - HaZeust 2y ago
- shkkmo 2y ago
  Minecraft took the moral approach of allowing independent servers and mods (in the Java edition.) Roblox took the scummy approach of monetizing child labor and taking a cut. I am so glad, despite the other bad things Microsoft has done with Minecraft, that they haven't taken the Roblox path.
  - amitlevy49 2y ago
    I had a Minecraft server when I was 12, and now as an adult I feel it was a very valuable experience for be personally And it was more fun to run the server than play the game
zombiwoof 2y ago
Toxic corporate culture isn’t helping
wavemode 2y ago
> Though Roblox isn’t profitable, there are some significant caveats to the situation. Over the last twelve months, operating cash flow—a far more important measure than accounting-defined profits—were $650MM, about 20% of revenue. Roblox has been cash-positive for at least twenty-four quarters. This feels like an example of the phenomenon highlighted in another recent post: https://news.ycombinator.com/item?id=41263855 https://news.ycombinator.com/item?id=41263855 Namely, that as long as Roblox's cash flow is increasing year-over-year, they probably don't care about profit. (And if cash flow ever does stop increasing, they can always get back to sustainability by pumping the brakes on reinvestment spending.)
- Guzba 2y ago
  Roblox is dilution-maxxing, stock based comp is up 10x since EOY 2020 whereas revenue is only up 3x. SBC is also ~ 1/3 of revenue. It's pretty cool to get shareholders to pay your employees so you can be called "operating cash flow positive" as if their comp isn't an expense.
  - staticautomatic 2y ago
    IDK about the stock but I’ve interviewed there and their cash comp is legit FU money. Am I misunderstanding you?
    - endtime 2y ago
      I'm a pretty senior IC at Roblox, and my new hire offer was 40% cash / 60% RSUs. It's now closer to 33/67 with refresher grants. Roblox pays very competitively (see levels.fyi). The apparent strategy is to try to hire lots of long-tenured L6+ Googlers (seriously, it's crazy how many former Googlers I work with).
      - ckdarby 2y ago
        Not a good sign for Roblox. Yes, many smart people, but they weren't industry changing (Google almost never loses) and they didn't get or turned down Google's renewal program to retain talent. Looks like a lot who wanted the high pay, but coast along and leverage their past experience to not be dared questioned.
golergka 2y ago
If you struck gold, don’t stop digging. If you hit growth, don’t stop reinvesting.
- nradov 2y ago
  Any game has an inherently limited and temporary TAM, unless you can license the engine to other companies.
  - kamikaz1k 2y ago
    Why is that true of games but not other businesses?
    - nradov 2y ago
      Almost all games have an inherently limited lifespan. How many games released 20 years ago are still selling well today? Games aren't like other software where you can keep enhancing the product and keep getting new sales. Thus games developers have to focus more on maximizing short term revenue rather than building a sustainable business around particular products. There are a handful of counterexamples like Madden NFL but only very few.
      - lodovic 2y ago
        That's really not the case. Check the wiki page for the top games in 2005. Many of these games are still around in an upgraded form.
        teamonkey 2y ago
        In most cases, a re-released game is an entirely new game SKU using the same IP, just as a movie remake is a new movie based on a previous one. And similarly, once released, most rereleased or remastered games have a short tail.
      - Ekaros 2y ago
TheRealPomax 2y ago
This feels like reading finance fan fiction (which it kind of is, given the author's profession?) and uses a lot of text to reach the part that lays out the actual problem: the average operating costs based on daily active users are $18 per user per quarter, and the average amount made is only $13. so either operating costs need to come down, charges need to go up, or they need (more, stable) external revenue (e.g. ads). This article tries to, foremost, sell you on the idea that its author is someone you should listen to for financial analyses.
- fl0id 2y ago
  Yeah. Pretty sure most of the numbers mentioned are irrelevant in this case.
- doctorpangloss 2y ago
  You’re right. What else? Roblox games absolutely utterly suck. Little else matters.
  - TheRealPomax 2y ago
    50+ million daily active users pretty much instantly invalidates that claim (hell, even a million daily actives would have, AAA games dream of these numbers =) It's not for you and me, we just see a garbage "game", but holy shit is there a large demographic that loves what Roblox gives them.
    - loloquwowndueo 2y ago
      Just because something that sucks is popular doesn’t invalidate the claim that it sucks (and Roblox does suck hard). Junk food is terrible for your health and is also very popular.
      - TheRealPomax 2y ago
        Except "bad for your health" is an objective biological fact, whereas saying something sucks is entirely subjective, so that argument too is invalid from the outset. You think it sucks, vastly more people don't. You're welcome to your opinion, but that's all it is.
littlestymaar 2y ago
TL;DR; if you discount the way their accounting is done (which artificially lowers their profits), it's not profitable because Apple and Google are eating 30% of their sales on their App stores.
- echelon 2y ago
  No innovation / monopoly tax levied on real innovation. The DOJ needs to crack down on Apple and Google.
  - hn_throwaway_99 2y ago
    I think you missed the news...
- deleted 2y ago
  [deleted]
snihalani 2y ago
Where is the money coming from if they are not profitable?
- harry8 2y ago
  It's an accounting trick. 1) Make tons of cash. 2) Invest the cash back in the business. 3) Record this investment on the financials as an expense. 4) The expenses inflated by investment spending means you declare no profit and probably pay no tax on that profit you just hid. The alternative is: 1) declare profit 2) Pay tax on it 3) Reinvest what's left after the taxman took a cut. Which would you choose if you were raking in loads more money than it was costing you to run the business and you had growth opportunities? Should this be a choice? If not, how would you "fix" it?
  - lotsofpulp 2y ago
    Are these troll posts? “Investing cash into a business” is an expense, no different than any other business expense.
    - harry8 2y ago
      Advertising, to grow sales can be expensed, for example. Buying new plant, not so much.
  - tr_user 2y ago
    https://www.thomsonreuters.com/en-us/posts/tax-and-accounting/section-174-expenditures/ https://www.thomsonreuters.com/en-us/posts/tax-and-accountin...
  - Nursie 2y ago
    I mean, it's not even profit hiding is it? Corporation tax is pretty openly an incentive for companies to invest in growth and people, rather than either sitting on cash or paying out to their owners. It's entirely normal and above board. Desirable even.
  - WheatMillington 2y ago
modeless 2y ago
The bigger question about Roblox is how and why they got their special treatment from Apple. The whole concept of Roblox is in blatant violation of Apple's App Store policies. I believe they are significantly shielded from competition because who else can get that kind of ongoing and reliable relief from Apple's famously picky and capricious App Store reviewers? Maybe Roblox is happy to pay Apple their 30% in exchange for that protection. And this is not a small matter: Roblox is a public company worth 25 billion dollars based in no small part on this special treatment. The SEC ought to be investigating this.
- deleted 2y ago
  [deleted]
- eru 2y ago
  Why the SEC specifically? Are you suggesting investors are hurt by this? If you want any part of any government to investigate, shouldn't you suggest some agency that's supposed to be working for consumer welfare or so?
  - modeless 2y ago
    If there is any kind of undisclosed arrangement between Apple and Roblox then there's a clear case for securities fraud IMO. There's a huge risk to Roblox were any such deal to unravel, both from the threat of competition being allowed and from the possibility of Apple starting to enforce their published policies on Roblox. For public companies, risks like that must be disclosed.
    - chii 2y ago
      > undisclosed arrangement between Apple and Roblox then there's a clear case for securities fraud IMO not all undisclosed arrangements constitute securities fraud - only those whose intent is to defraud investors do. As for anti-competitive measures, the investigation ought to be from the consumer protection agencies, like the FCC, or from the justice department regarding anti-trust.
jrm4 2y ago
There's something weird and sad about Roblox for me as an old-timer who still has silly dreams about free/open software internet utopias for just fun? There's so much creative (programming etc) energy in that place and, for what? short rant over
- TulliusCicero 2y ago
  In a lot of ways it reminds me of BW/War3 custom maps.
  - Aeolun 2y ago
    Sorta, except that everyone is racing for money.
    - pjmlp 2y ago
      Turns out supermarkets don't take pull requests, and not everyone wants to live in a community farm, doing NGO like work. Or placed in a less snarky way, capitalism spoils ideals.
      - wiseowise 2y ago
        Evil capitalism where people want to live nice and system provides means to do so.
        pjmlp 2y ago
        I haven't said otherwise, only that people coming from FOSS like backgrounds might not get what they want.
- treyd 2y ago
  I've had this half-idea for recreating something like Garry's Mod in Godot for a while now. It seems like something someone would have created by now but it doesn't exist yet for whatever reason. Like, a framework for building first-person FPS-ish game modes and handling all the asset management, sync, etc, like GMod being built around Source does and just letting developers build the game modes without worrying about the annoying tricky stuff.
andyferris 2y ago
> Unlike other social platforms, Roblox’s revenue is nearly all via user spending rather than advertising. As such, Roblox pays 25% of its revenue to Apple and Google (30% of transactions on those platforms) whereas Facebook, Snap, et al pay effectively 0. Note that Facebook, which has structurally lower costs to service users than Roblox and is far more mature, has an operating margin of roughly 40% — if the company had to pay out 25-30% first, it would never have “tech company” profit margins, let alone profit dollars. Wow. I've never though about this before, but this is an awful second-order consequence of the high app store fees set by Apple and Google. It essentially incentivizes App makers to treat users as products not customers! (Not too surprising for Google, but certainly goes against Apple's public stance).
- eru 2y ago
  Well, the app stores could fix that by also demanding a cut from ad revenue.
  - pxue 2y ago
    Well they did and Facebook refused. Hence the "do not track" feature.
    - bredren 2y ago
      Apple did have conversations about how to profit from Facebook’s apps. But there’s no evidence that the App Tracking Transparency was a direct result of failure to come to terms with Facebook on some type of revenue share. Even if a portion of the comprehensive set of protections included in ATT was specifically to target Facebook, Apple did not use it to punish Facebook. Apple’s customers did. Because when given a choice, 85-96% of all people across the entire planet did not want Facebook tracking them. If one was to speculate on The decision-making behind platforms’ leadership, it follows to consider Google’s reluctance to follow in the footsteps of Apple with ATT due to google’s own direct reliance on ad revenue. Apple is no saint, it’s made many compromises on user privacy in the face of business. But there’s no doubt in my mind that the position of selling products and services, including the distribution of others’ software is by far more consumer friendly than the quiet identification, data collection and targeting of individuals.
bentcorner 2y ago
In my (non-finance, parent of a roblox-player) opinion, the problem that Roblox has is that every single roblox game has a "roblox" essence. Every roblox game is undeniably roblox, and to broaden their market and attract higher-paying users, I think they need to fix that. There's a certain amount of jank in every roblox game, and that's part of the charm. But it's undoubtedly also a reason why people with fatter wallets don't spend more time in roblox. If you've never played a roblox game this might be hard to understand, but those of you who have spent time in these worlds with your kids you will know exactly what I'm talking about. Perhaps more finance-related, but the monetization of roblox games is also extremely haphazard - providing more guide rails and designing payments more "in platform" would go a long way towards spending confidence.
- TulliusCicero 2y ago
  Hard agree on the jank, but it may not be possible to fix that while keeping the upsides of the platform.
  - Aeolun 2y ago
    I don’t think there’s anything inherent in Roblox that means the characters have to look and be animated like janky robots.
    - gradyfps 2y ago
      It takes a huge amount of effort to overwrite & re-animate the default ROBLOX characters and their animations.
      - Aeolun 2y ago
        Yeah, I meant from the perspective of the roblox devs. They can add a more organic default animation if they want. They choose not to.
- bemmu 2y ago
  I'm a dev on the platform and agree that there is a lot of jank in Roblox games. There's some indication of more polish coming, as recently many games have been rewarded (Pressure, Shovelware's Brain Game etc.) from having more polished animations. Devs respond quickly to seeing other games succeed and take notes. The tools are also getting better. It's gradually getting less nightmarish to try to import a working skeletal animation from Blender to Roblox Studio. Could Roblox games benefit from more polish? Absolutely, but it's less important than having quick access to a high variety of games with consistency in how you play them. Perhaps the most massive benefit of jank-tolerance is that it lets devs "gradient descent" towards a game players want. If you released a janky proto on Steam, you'd miss your shot, get an "overall negative" review and be done. On Roblox you can release a janky proto, see its metrics, improve over time until you have something people want.
IG_Semmelweiss 2y ago
I can't recall the exact company name (Edit: it was TCI), but this was a smart accounting move that made one of the big US telcos frogleap the competition in the race for connectivity. Basically, the company invested sufficient into long term assets, big infra investments like cabling, towers, etc. Because of accounting rules, they could choose to amortize all of that investment in a straight line over 30 years, OR accelerate depreciation in the short term. I believe the company always chose the latter, and the net effect of this was that every year the company would show a loss, 100% related to said infra investments. However, when you carved out depreciation, the company was clearly making increasing amounts of money. Further, all that fiber was capturing new clients, which was free cash flow which they would turn around and capture even more customers with a new round of investments. In effect, the use of accelerated depreciation helped the company manage its tax obligations while expanding aggressively. By deferring tax liabilities and reinvesting capital, the company was able to capture market share and grow its customer base. Eventually they had to show income and therefore pay the IRS, but by that time they were at the leading edge of the race and investors rewarded this company's CEO handsomely.
- jld 2y ago
  Sounds like John Malone at TCI Cable
- parpfish 2y ago
  John Malone at TCI? (I learned about it from HN here a couple days ago: https://news.ycombinator.com/item?id=41263855 https://news.ycombinator.com/item?id=41263855)
  - IG_Semmelweiss 2y ago
    wow, that is correct. I read this in a book over 10 years ago, and now 2 articles about the same trick within the same week.
    - xNeil 2y ago
      Cable Cowboy, I'm guessing. Great book!
password4321 2y ago
20240404 https://news.ycombinator.com/item?id=39935526 https://news.ycombinator.com/item?id=39935526 https://news.ycombinator.com/item?id=39934101 https://news.ycombinator.com/item?id=39934101 (Roblox executive says children making money on the platform is 'a gift' ) >Arguing that it's a "gift" when they're taking a 75% cut is just offensive. 20220707 https://news.ycombinator.com/item?id=32014754 https://news.ycombinator.com/item?id=32014754 (Problems at Roblox) > Roblox is horrendous. It is as dangerous as any dark corner of the Internet, except that it appears child-friendly to parents.
- hipadev23 2y ago
  Try doing the math of accepting payment (Apple and Google take 30% off the top), then building, operating, and moderating a globally distributed auto-scaling gaming platform with 350M+ MAUs. 75% may be too high, but comparing it to say Steam’s 30% cut for distribution only is a grossly imbalanced comparison.
  - password4321 2y ago
    Is 75% the minimum taken, only if you don't cash out Robux? Extra yikes. > the company taking 75% of profits and having a pretty massive minimum bar (100,000 Robux / $1,000 USD) which must be passed before the person gets to withdraw anything at all, which is then effectively double taxed because the company will then only give $350 for 100,000 Robux when cashing out to actual money
    - hipadev23 2y ago
      It’s a $105 minimum payout, not $1,000. And that 75% math is how much you earn, not a minimum or whatever you’re talking about. If players spend ~$1,000 of Robux in your game, you get paid ~$250.
andrewstuart 2y ago
Really interesting talk from Stanford's Entrepreneurial Thought Leaders podcast. 2018 but its still worth listening to. https://ecorner.stanford.edu/podcasts/when-the-platform-is-your-product/ https://ecorner.stanford.edu/podcasts/when-the-platform-is-y...
OuterVale 2y ago
Good content, but I must say that the site made it a difficult read. It seems serviceable on a phone, but on anything larger, it's questionable. The width of the text seems odd. It's too narrow on a medium viewport but too wide on a large one. Around 75 characters per line is usually the sweet spot for legibility. The font sizes also seem to be quite peculiar, being done with seemingly unneeded complexity: `font-size: calc((var(--normal-text-size-value) - 1) * 1.2vw + 1rem)`. Not quite sure this is necessary? My computer also seemed to really struggle rendering the page as it stuttered constantly while scrolling or resizing. Additionally (and this is moving into nitpicking territory), the navbar strikes me as a bit busy and overwhelming with its 15 items. Perhaps some culling or drop-down menus are in order. I can't say I'm a huge fan of what looks to be a distorted AI-generated header image either.
mahirsaid 2y ago
Why can't they just issue their own device to minimize app store fees. it seems to me the amount money going to app store real estate is more than enough to justify some sort of method of allowing their users to play the game without app store intervening. The total amount spent so far is astounding if viewed in figures. Minus half or quarter of the total time since appearing in app-store for it to be served to the large audience. The other half would have to be too much time spent content. Rest of that half of paid out fees could have more than enough to fund a plan B. Another reason why having the current ecosystem, where app stores pretty much dictate the destiny for a growing company. creating another device assuming it magically becomes a success, there is most definitely not a long lasting venture either. Bypassing the app store to achieve what exactly? okay this device plays roblox 'and what else can it do?".Discouraging to see companies like this be dictating how they grow and succeed. Only to grow in this manner and be topped out as there is no next phase after this growth, the atmosphere they're in is polluted and cloudy. The next phase in BIG tech is most likely not going to resemble this depiction, for more reasons than i can list here. The big players in tech are losing their ground day by day. Epic Games is relisted back on to the app store, not long ago they were fighting apple over the very same hurdle that Roblox is facing today. Epic Games did however get their way with Google and went on to send a clear message to the rest of the big tech players out there. I think a big change is near and if not than its needed.
- pjc50 2y ago
  > Why can't they just issue their own device to minimize app store fees. Lmao. Microsoft tried that and failed. Amazon tried that and failed. The market has enough room for iOS and Android and nothing else.
- stavros 2y ago
  > Why can't they just issue their own device That "just" is doing a lot of heavy lifting. Don't worry, though, your iPhone will soon be your own to do whatever you want with, thanks to the DMA. It already is, if you live in the EU.
  - CuriouslyC 2y ago
Aeolun 2y ago
So the real reason they’re not profitable is because they’re doing some accounting magic that counts their income spread over the next 27 month, instead of all up front. They are cash flow positive, it’s just that their income numbers are lagging some 2 years behind.
- hipadev23 2y ago
  Roblox absolutely doesn’t want to do this “accounting magic”. They originally filed their S-1 with more typical revenue recognition and the SEC forced to change to this frustrating model. [1] [1] https://www.barrons.com/articles/the-sec-told-roblox-to-change-its-accounting-heres-what-it-means-for-the-stock-51617217979 https://www.barrons.com/articles/the-sec-told-roblox-to-chan...
raister 2y ago
Roblox is a huge problem for me, as a parent of a 8y kid. Let me explain: I try to block violent apps in his tablet using Google's Family app, however, Roblox internally keeps 'offering' my kid almost any game, whatever if there's violence, drugs, killing others, and so forth. It's a headache and a source of fights, so, I thank the responsible (/sarcasm).
- Quothling 2y ago
  Roblox really needs to create some better parental controls so that it includes the option for a parent to be required to "ok" what they call "new experiences". The various limits you can set on content are great in theory, but they are apparently impossible for Roblox to enforce and as such are meaningless. I do like Roblox from a creator perspective (I'm not a creator) since it's rather easy to guide your children into building games rather than "just" consuming them. Something which is very hard with basically everything else they do digitally.
- endtime 2y ago
  My kids use Roblox. There _are_ parental controls you can enable through Roblox. When my twins turned nine, I had to enable 9+ games for them. I believe the age cutoffs are 9+, 13+, and 17+. I think anything with drugs should be 17+, and realistic violence/blood might be 13+? Not totally sure. (Disclaimer: I'm a Roblox employee, but speaking only on my own behalf, and don't work on anything related to age guidelines.)
  - loloquwowndueo 2y ago
    I have my kid’s set to “all ages” (the most “restrictive” category with the most “appropriate” content) and he does get gun violence, disturbing and scary games, and games based on non-kid characters (The Amazing Digital Circus). Sometimes a game is shown and when kid tries to access it he gets a “this game isn’t allowed by your age category” or some such. This is an unbelievably dishonest way to tempt kids into content that’s not for them. If the content is not usable for them it should just not show, period. If you work at Roblox maybe escalate the fact that content filtering by age category is totally worthless and could use fixing.
learlu 2y ago
One thing the article doesn't touch on is that Roblox has yet to tap into the China market, where 25% of the world's gaming revenue reside.
- kilolima 2y ago
  Given China's experience with the West's sordid attempt to subvert them via opium, it seems highly unlikely that roblox would ever be legalized there.
  - learlu 2y ago
    Roblox has a joint venture setup with Tencent to enter that market. The Chinese gaming market require a gaming license to enter, and it seems they've figured out a way to do it.
ro_bit 2y ago
> When a user buys $30 in Robux, the platform’s virtual currency, Roblox recognizes $30 in bookings. An average of $3 of that $30 is spent on a “consumable” (i.e., a single-user or otherwise perishable good), and so Roblox recognizes that $3 as revenue right away. The remaining $27 is spent on “durable” goods such as an avatar. As an avatar can and often will be used over time, Roblox recognizes this revenue over the average lifetime of a Roblox user I'm not sure if I'm understanding this point correctly. From my understanding, wouldn't roblox consider their revenue in a given month to be 1/9th of this months purchases + 1/27th of last month's purchases + ... If so, why would their revenue recognition make them unprofitable? Every month they only realize 1/9th of revenue from that month, but that would be offset by the other 8/9ths of revenue coming from the last 27 months. Wouldn't it just make their recognized revenue a frontloaded rolling average?
- yes_man 2y ago
  It could be their active user count is increasing very fast and that is eating the rolling revenues via infra costs, customer acquisition costs, perhaps they are subventing that growth in other ways like discounts to get players into the paying segments etc.
- mcherm 2y ago
  If there were no growth, that would eventually be true (after 27 months). But there is a lot of growth.
ElCapitanMarkla 2y ago
My kids have started playing Roblox recently and they have started asking for some Robux so they can buy crap... I really don't get how so many people are into spending dollars on this stuff. Everything they wanted was ~$10-20 NZD and it was just throw away stuff, like a costume, etc. And then it's only useful in that one game you have brought it for. It blows my mind that it ever got this popular.
- jack_pp 2y ago
  Because kids aren't utilitarian. They want shiny things impulsively now in whatever niche game they are playing at the moment. Or want to keep up with their friends who got cool stuff to keep status. Doesn't matter to them that they'll switch games in a week and lose everything.
  - jack_pp 2y ago
    To add to this, for them money is like ice cream, comes from parents rarely and gives them temporary pleasure. That's why I think it is good to pay your kids for chores or good grades so that they start learning financial responsibility early. Sure they'll blow their money on useless stuff at first but then they'll have none for some other thing they wish they had money for and will learn to choose more wisely in the future
    - hypertele-Xii 2y ago
      My dad let me gamble my allowance against himself in poker. Lost it all, obviously. Was quite heartbroken he wouldn't give it back, but I sure learned a lesson :)
    - fifticon 2y ago
      I concur with this. Our kid can earn robux doing chores, and she only earns them once in a while. It often leads her to a period of deliberation, where at first she's like 'I so much need this, I must do whatever chores it will take!'. Then gradually as the minutes go by, she gets doubts, and at some point flips into "No. Way. THAT is NOT worth THAT MUCH WORK!" Whenever this happens, I get sort of proud or satisfied. A lot of times it doesn't happen, she does the chore and gets the reward. But other times, especially for costly idiosyncratic choices, she comes to her senses. The insane spending sprees/binges shrink a lot, when they are expressed in "how much vacuuming and floor washing am I willing to endure?"
throwaway984393 2y ago
[dead]
alvah 2y ago
"...at a minimum, they will substitute a 30% fee with a 4% credit card processing expense..." Which large corporation is paying anything close to 4% for credit card processing? Based on what's available to me in my small business, I'd be astonished if anyone doing any significant volume was paying as much as half of this percentage.
- nottorp 2y ago
  Are you selling something with some utility to adults? And as a consequence you have zero to very few chargebacks, because your customers aren't going to be overriden by their parents? I can imagine there are a lot more problems with kids' spending on Roblox, which would bring the processing fees way up.
  - alvah 2y ago
    Do excessive chargeback levels add to the processing fees on every transaction? If so, that could explain the higher cost.
- mrguyorama 2y ago
  Roblox has INSANE fraud patterns and chargebacks
Panzer04 2y ago
w.r.t article. Very wordy, could easily have been summarised. I guess if your costs are high enough, you can eat any amount of profit. They clearly need to get their expenses under control (if they care about generating an actual profit). There's only so much you can grow once you get to a certain threshold, and they must be getting near it. Spending 2b on opex seems kinda crazy (3.2b revenue vs 1.2b income). Most games are opex-light, capex-expensive. Their capex is definitely not cheap either, though that seems to be a tradeoff they choose to have. Of course, this all presumes the people running the company care about generating a profit (by no means a guarantee!). I'm sure all of the employees are making out like bandits, based on other commenters, and if management is happy to spend the money, well, that's all there is to it. It would be hard for anyone to argue with their success in growing their userbase, if nothing else.
nottorp 2y ago
I don't understand all those terms in the article, but how much of their "unprofitability" is actually creative accounting? And how is this Roblox better than the (pre MS) Minecraft?
radicalbyte 2y ago
I do not believe for a second that < 50% of Roblox users are > 13. Two of my three kids all have their ages set to 13+ because they decided to combine the age-related features you do want (limited chat, no tracking etc) with the content lock. I'm happy for my kids to play "Tree-house of Horrors" style games but not to be groomed by older player. Yet Roblox has no option for it.
- decremental 2y ago
  [dead]
- radicalbyte 2y ago
  @decremental nah I used it to teach them, I also regularly check their messages in game. Most of the problems they have are other kids screaming racist things or swearing.
paganel 2y ago
> Everyone knows Roblox is huge. I had to web search for what this thing was, apparently a game for small kids? Why should "everyone" know about video-games addressed to children?
rwmj 2y ago
I'm surprised that if you're doing $billions through one of the app stores you can't negotiate some large discount from the usual 30% commission?
- shruggedatlas 2y ago
  What leverage would they have in those negotiations?
  - rwmj 2y ago
    That they won't write an amicus brief for the Bureau of Competition about the app store monopoly?
shkkmo 2y ago
Roblox is a destable scummy company that depends on the exploitation of children to make money. They took the exploitative practices of microtransaction based games, targeted them at children, then decided to use child labor to create content inside an expoitatively taxed monetization system, then decided to abdicate all their responsibility for responsible community management to protect these children by shutting down their own forums and pushing everything to Discord. Now we have children working for unvetted strangers with no labor protection and no oversight.
- beart 2y ago
  Agreed. And it goes beyond jaded monetization. A popular player and predator was only recently arrested after initiating physical contact with one of the child laborers. The game is simply not a safe environment for children.
  - gradyfps 2y ago
    Pedophilia & child-predation have been an open secret to anyone socially involved in ROBLOX for the longest time. The amount of random 18+ people interacting often and without guardrails with 13/14/15 year-olds is "normalized" to those in the communities.
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bilsbie 2y ago
Can anyone explain the business model? Do they take a cut of robux purchases? Is that the main source of income? How do game makers get paid?
elif 2y ago
I'm sure it makes sense to people smarter than me but I just don't get building a software business with <5% margins. What's the point? Clearly you failed somewhere along the lines at the whole thing you set out for, which is a clear profit engine... So how do you end up with numbers that look like you are doing easily copyable manufacturing with a tight bottom line? I think too much focus on product growth and organizational growth, and not enough on efficiency, scale, and profit. The best times I've had at startups were when we were lean, and profiting >50%. The business was easier, we had more flexibility for decisions, morale was great... But then they all seem to grow into 0-10% profit corporate behemoths where each employee can't even tell if the job they do is worth their paycheck, it just becomes awkward, slow, uninspiring work. And then you find yourself robbing more single parents checking accounts than anyone on earth, but not even profiting. How depressing.
- Workaccount2 2y ago
  In start-up spaces you usually don't have stiff competition. Once you grow, and it becomes clear you have a viable market, competitors move in and prices start to get ground down.
h1fra 2y ago
tl;dr they are profitable, but they don't want to show it. Once they want to reach profitability they will fire (layoff) most of the R&D department and make billions.
GNOMES 2y ago
My kiddo has easily spent 500+ on Roblox across birthday/Xmas gift cards/chores. I can't stand that almost all of the games seem to have a pay to win aspect, or are heavily advertising every chance they get. As a gamer dad, I try to show my kid better games to play, but because they aren't free, his friends can't play. Just drives him to keep playing and wanting more Robux. It's compounded when his favorite Youtubers play... Seriously don't understand how Roblox isn't being investigated for predatory practices. I imagine they can hide behind the fact users are making most of the mini games, and they are just providing a platform.
- ToucanLoucan 2y ago
  > Seriously don't understand how Roblox isn't being investigated for predatory practices. Because if you held game companies responsible for deliberately fostering addiction in their customers to earn a profit, we'd have scores of industries behind them in line to be brought to heel the same way and the stocks for tech companies, game companies, tobacco companies, casino companies, alcohol companies, etc. etc. would all implode. There's no danger of that of course because we long ago decided as a society that we're fine with vulnerable populations being put through an economic woodchipper to fuel our retirement funds, and that's been status quo for so long that I sincerely doubt there's any way to actually change it.
  - GNOMES 2y ago
    Understand your point, but Epic (Fortnite) and games like Fifa have gotten sued or major slap on the wrists for the same practices
    - latexr 2y ago
      > major slap on the wrists That doesn’t make sense as a concept. The point of the slap on the wrist is that it’s ineffective/insufficient punishment to change behaviour. You’re essentially saying they got a big small penalty.
      - 2y ago
kazimarslan 2y ago
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T3RMINATED 2y ago
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niemandhier 2y ago
I bought my son a ps5, Hogwarts Legacy and told him Roblox is never going to be on any device we own or in any network I control. In addition to being mostly pay-to-win the platform has a pedophile problem. https://www.bloomberg.com/features/2024-roblox-pedophile-problem/ https://www.bloomberg.com/features/2024-roblox-pedophile-pro...
- johnnyanmac 2y ago
  I know roblox is the most popular target. But really, any network enabled platform with a large base of children will have a grooming problem. I was surprised reading the article that Roblox already spends 28% of revenue on Safety and Trust. Maybe Roblox is just that gigantic a platform to where that's still not sufficient.
williejanice 2y ago
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consf 2y ago
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kin 2y ago
Everything I've seen from Roblox just seems so rough across the board. Poor UI, poor graphics, poor gameplay. There's a sense of freedom that is quite refreshing kind of like Gary's mod. I'm just so surprised that with such high adoption, none of the money is going into make anything remotely polished.
- hipadev23 2y ago
  > I'm just so surprised that with such high adoption, none of the money is going into make anything remotely polished. There are numerous polished games on the platform, but the most of the players are younger kids on hand-me-down mobile devices, so the most popular games tend to be easy to run casual games. Here are a few examples of what you're looking for: * Frontlines: https://www.youtube.com/watch?v=SA71d3O1ID0 https://www.youtube.com/watch?v=SA71d3O1ID0 * Primal Hunt: https://www.youtube.com/watch?v=X_lenB5MTTU https://www.youtube.com/watch?v=X_lenB5MTTU * Riotfall: https://www.youtube.com/watch?v=1E0kEFxBTEM https://www.youtube.com/watch?v=1E0kEFxBTEM
  - realprimoh 2y ago
    The fact that these are Roblox games are blowing my mind. Wow!
- thomastjeffery 2y ago
  Polish is a double edged sword. Its other side is decisiveness, which is diametrically opposed to engineering freedom. It's a hard problem, though I agree there is some low hanging fruit that Roblox seems ignorant to. I think the biggest reason for its success is an extreme lack of competition. Nearly every time someone makes a good enough (use friendly) sandbox engine, they wrap it in copyright and market it wholesale; and that makes decisiveness (polish) a high priority.
nsxwolf 2y ago
They have the craziest most difficult interview process I've ever seen, like beyond quant level. But I don't know why. My kids play it and it feels like the jankiest most busted-ass 3D engine that ever existed. I'm sure all the secret sauce is doing all this stuff at scale, but what do Leetcode hards in 20 minutes have to do with that?
- guax 2y ago
  Most interview "rituals" are about gatekeeping and not actual talent acquisition. I'm unfamiliar with theirs but it sounds like it from the descriptions and company output.
- camdenreslink 2y ago
  It's just a hazing ritual. Somebody started it when it was a small company, and all of them had to go through it so new hires will too.
- _gabe_ 2y ago
  Most games have a lot of “jank”, even triple A games. I feel like most people underestimate Roblox because of the graphics, which is 90% how well you can create assets, and 10% programming skill. The real technicality of Roblox comes from its massive online nature, custom built-in editor + IDE combo, custom fork of Lua to add typing, sandboxing, and other optimizations, the social media aspect of the platform, the in game monetary system, and more I’m not thinking of. If all you’re doing is characterizing it as a 3D engine, you’re missing pretty much everything about the platform that makes it work. Nobody looks at VsCode and asks why it’s hard to program that, or Facebook, or Unity, or MMOs, or Stripe. This platform is all those things in one. And I may be wrong on some of the details, but the stuff those devs get to work on is undoubtedly more difficult than the React apps 90% of developers do in their day job that they also had to grind leet code for.
peanut-walrus 2y ago
They have positive cash and are paying their employees well. That's what a company should be doing rather than paying peanuts and hoarding wealth like a dragon. Especially as it seems they are actually profitable, just hiding it with accounting.
- hipadev23 2y ago
  > just hiding it with accounting. I posted this in another comment, but the deferred revenue recognition was forced by the SEC [1]. [1] https://www.barrons.com/articles/the-sec-told-roblox-to-change-its-accounting-heres-what-it-means-for-the-stock-51617217979 https://www.barrons.com/articles/the-sec-told-roblox-to-chan...
aaroninsf 2y ago
FTFY: "biggest surveillance effort targeting children"
resource_waste 2y ago
Me any my wife's experience with roblox: >Find good games through reddit recommendations >Play the games, most are novel and remind me of WC3 customs >Show our non-gamer friends the quirky games Its pretty cool, but there is soo much garbage to get past.
tdiff 2y ago
I find the whole idea of money-driven game environment to be so repulsive. It's like ultimate goal of earning money is put above having fun. Not something it'd love my kids to experience.
RIMR 2y ago
>But as COVID receded into memory, Roblox shifted from “new” to “familiar,” "New"? Roblox came out nearly 20 years ago... It went from "cult classic" to "viral phenomenon".
dingodongo1 2y ago
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formerlurker 2y ago
Roblox exposes children to predators. I hope parents pay more attention and get their children out of Roblox because it doesn’t seem Roblox will do anything. Source: https://www.bloomberg.com/features/2024-roblox-pedophile-problem/#:~:text=More%20than%2040%25%20of%20its,data%20compiled%20by%20Bloomberg%20Businessweek https://www.bloomberg.com/features/2024-roblox-pedophile-pro....
Sparyjerry 2y ago
Roblox built up by allowing users to create 'mini-games' that copied every single major title out there, but keep your avatar or a portion of it across games. When I watched my kid play it was littered with copyrighted music, games, and characters everywhere. It's interesting that once it got in trouble with some copyrights it still survived - although I suspect that is just because everyone who could sue them hasn't yet.

466 points by mfiguiere 2y ago

reminds me of the path Minecraft could have taken - they also had a massive amount of community developers building servers, but instead of encouraging monetization and taking a cut, they banned it and cracked down aggressively Of course, unlike Roblox, Minecraft was profitable

RockRobotRock 2y ago
I appreciate how they left Java edition alone and chose Bedrock edition to dump all the MTX bullshit on.
- HaZeust 2y ago
  For now.
  - RockRobotRock 2y ago
    i've been thinking that for 10 years. they forced msft accounts, which is annoying. other than that, hasn't been too bad
    - HaZeust 2y ago
      So they're empirically making progress towards it.
  - skeaker 2y ago
    That ship has sailed. People can and will just play on old versions if it comes to this. They already do for older versions that have better mod support.
- zamadatix 2y ago
  MTX?
  - RockRobotRock 2y ago
    microtransactions
Gigachad 2y ago
What is the Minecraft online experience like these days? I only ever hear about people playing self hosted servers with friends. Are there still big servers with unique game modes kicking? Seems like it would be hard to keep sustainable
- theshrike79 2y ago
  There are "Realms" that are essentially MS/Mojang hosted massive servers.
- skerit 2y ago
  I've been running my own (not-for-profit, for people over the age of 21) server for the past 5 years. We're basically just a Vanilla+ server, we have no problems finding new people to join (thanks to /r/MinecraftBuddies)
  - xrd 2y ago
    My kids love Minecraft. They often run a curseforge mod (create?) and then open a port so they can play together inside the home LAN. But, I don't really understand how this works, and I would love to host it in a way that their cousins in another state could join. Do you know how I research this? I get a bit confused between the curseforge mods, the java edition. Should I start by downloading a JAR of the server and host it on a cloud server somewhere, and then firewall it off to only permit my NAT IP and the cousin's NAT IPs? At some point maybe I can run it all within a wireguard/tailscale network. How do I get started in my reading? I'm worried I'll get overwhelmed by reading /r/MinecraftBuddies, but perhaps that is a better place to ask?
    - password4321 2y ago
      This may be enough to get the ball rolling: https://blogs.oracle.com/developers/post/how-to-set-up-and-run-a-really-powerful-free-minecraft-server-in-the-cloud https://blogs.oracle.com/developers/post/how-to-set-up-and-r...
    - HaZeust 2y ago
shkkmo 2y ago
Minecraft took the moral approach of allowing independent servers and mods (in the Java edition.) Roblox took the scummy approach of monetizing child labor and taking a cut. I am so glad, despite the other bad things Microsoft has done with Minecraft, that they haven't taken the Roblox path.
- amitlevy49 2y ago
  I had a Minecraft server when I was 12, and now as an adult I feel it was a very valuable experience for be personally And it was more fun to run the server than play the game

zombiwoof 2y ago

Toxic corporate culture isn’t helping

wavemode 2y ago

> Though Roblox isn’t profitable, there are some significant caveats to the situation. Over the last twelve months, operating cash flow—a far more important measure than accounting-defined profits—were $650MM, about 20% of revenue. Roblox has been cash-positive for at least twenty-four quarters. This feels like an example of the phenomenon highlighted in another recent post: https://news.ycombinator.com/item?id=41263855 https://news.ycombinator.com/item?id=41263855 Namely, that as long as Roblox's cash flow is increasing year-over-year, they probably don't care about profit. (And if cash flow ever does stop increasing, they can always get back to sustainability by pumping the brakes on reinvestment spending.)

Guzba 2y ago
Roblox is dilution-maxxing, stock based comp is up 10x since EOY 2020 whereas revenue is only up 3x. SBC is also ~ 1/3 of revenue. It's pretty cool to get shareholders to pay your employees so you can be called "operating cash flow positive" as if their comp isn't an expense.
- staticautomatic 2y ago
  IDK about the stock but I’ve interviewed there and their cash comp is legit FU money. Am I misunderstanding you?
  - endtime 2y ago
    I'm a pretty senior IC at Roblox, and my new hire offer was 40% cash / 60% RSUs. It's now closer to 33/67 with refresher grants. Roblox pays very competitively (see levels.fyi). The apparent strategy is to try to hire lots of long-tenured L6+ Googlers (seriously, it's crazy how many former Googlers I work with).
    - ckdarby 2y ago
      Not a good sign for Roblox. Yes, many smart people, but they weren't industry changing (Google almost never loses) and they didn't get or turned down Google's renewal program to retain talent. Looks like a lot who wanted the high pay, but coast along and leverage their past experience to not be dared questioned.

golergka 2y ago

If you struck gold, don’t stop digging. If you hit growth, don’t stop reinvesting.

nradov 2y ago
Any game has an inherently limited and temporary TAM, unless you can license the engine to other companies.
- kamikaz1k 2y ago
  Why is that true of games but not other businesses?
  - nradov 2y ago
    Almost all games have an inherently limited lifespan. How many games released 20 years ago are still selling well today? Games aren't like other software where you can keep enhancing the product and keep getting new sales. Thus games developers have to focus more on maximizing short term revenue rather than building a sustainable business around particular products. There are a handful of counterexamples like Madden NFL but only very few.
    - lodovic 2y ago
      That's really not the case. Check the wiki page for the top games in 2005. Many of these games are still around in an upgraded form.
      - teamonkey 2y ago
        In most cases, a re-released game is an entirely new game SKU using the same IP, just as a movie remake is a new movie based on a previous one. And similarly, once released, most rereleased or remastered games have a short tail.
    - Ekaros 2y ago

TheRealPomax 2y ago

This feels like reading finance fan fiction (which it kind of is, given the author's profession?) and uses a lot of text to reach the part that lays out the actual problem: the average operating costs based on daily active users are $18 per user per quarter, and the average amount made is only $13. so either operating costs need to come down, charges need to go up, or they need (more, stable) external revenue (e.g. ads). This article tries to, foremost, sell you on the idea that its author is someone you should listen to for financial analyses.

fl0id 2y ago
Yeah. Pretty sure most of the numbers mentioned are irrelevant in this case.
doctorpangloss 2y ago
You’re right. What else? Roblox games absolutely utterly suck. Little else matters.
- TheRealPomax 2y ago
  50+ million daily active users pretty much instantly invalidates that claim (hell, even a million daily actives would have, AAA games dream of these numbers =) It's not for you and me, we just see a garbage "game", but holy shit is there a large demographic that loves what Roblox gives them.
  - loloquwowndueo 2y ago
    Just because something that sucks is popular doesn’t invalidate the claim that it sucks (and Roblox does suck hard). Junk food is terrible for your health and is also very popular.
    - TheRealPomax 2y ago
      Except "bad for your health" is an objective biological fact, whereas saying something sucks is entirely subjective, so that argument too is invalid from the outset. You think it sucks, vastly more people don't. You're welcome to your opinion, but that's all it is.

littlestymaar 2y ago

TL;DR; if you discount the way their accounting is done (which artificially lowers their profits), it's not profitable because Apple and Google are eating 30% of their sales on their App stores.

echelon 2y ago
No innovation / monopoly tax levied on real innovation. The DOJ needs to crack down on Apple and Google.
- hn_throwaway_99 2y ago
  I think you missed the news...
deleted 2y ago
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snihalani 2y ago

Where is the money coming from if they are not profitable?

harry8 2y ago
It's an accounting trick. 1) Make tons of cash. 2) Invest the cash back in the business. 3) Record this investment on the financials as an expense. 4) The expenses inflated by investment spending means you declare no profit and probably pay no tax on that profit you just hid. The alternative is: 1) declare profit 2) Pay tax on it 3) Reinvest what's left after the taxman took a cut. Which would you choose if you were raking in loads more money than it was costing you to run the business and you had growth opportunities? Should this be a choice? If not, how would you "fix" it?
- lotsofpulp 2y ago
  Are these troll posts? “Investing cash into a business” is an expense, no different than any other business expense.
  - harry8 2y ago
    Advertising, to grow sales can be expensed, for example. Buying new plant, not so much.
- tr_user 2y ago
  https://www.thomsonreuters.com/en-us/posts/tax-and-accounting/section-174-expenditures/ https://www.thomsonreuters.com/en-us/posts/tax-and-accountin...
- Nursie 2y ago
  I mean, it's not even profit hiding is it? Corporation tax is pretty openly an incentive for companies to invest in growth and people, rather than either sitting on cash or paying out to their owners. It's entirely normal and above board. Desirable even.
- WheatMillington 2y ago

modeless 2y ago

The bigger question about Roblox is how and why they got their special treatment from Apple. The whole concept of Roblox is in blatant violation of Apple's App Store policies. I believe they are significantly shielded from competition because who else can get that kind of ongoing and reliable relief from Apple's famously picky and capricious App Store reviewers? Maybe Roblox is happy to pay Apple their 30% in exchange for that protection. And this is not a small matter: Roblox is a public company worth 25 billion dollars based in no small part on this special treatment. The SEC ought to be investigating this.

deleted 2y ago
[deleted]
eru 2y ago
Why the SEC specifically? Are you suggesting investors are hurt by this? If you want any part of any government to investigate, shouldn't you suggest some agency that's supposed to be working for consumer welfare or so?
- modeless 2y ago
  If there is any kind of undisclosed arrangement between Apple and Roblox then there's a clear case for securities fraud IMO. There's a huge risk to Roblox were any such deal to unravel, both from the threat of competition being allowed and from the possibility of Apple starting to enforce their published policies on Roblox. For public companies, risks like that must be disclosed.
  - chii 2y ago
    > undisclosed arrangement between Apple and Roblox then there's a clear case for securities fraud IMO not all undisclosed arrangements constitute securities fraud - only those whose intent is to defraud investors do. As for anti-competitive measures, the investigation ought to be from the consumer protection agencies, like the FCC, or from the justice department regarding anti-trust.

jrm4 2y ago

There's something weird and sad about Roblox for me as an old-timer who still has silly dreams about free/open software internet utopias for just fun? There's so much creative (programming etc) energy in that place and, for what? short rant over

TulliusCicero 2y ago
In a lot of ways it reminds me of BW/War3 custom maps.
- Aeolun 2y ago
  Sorta, except that everyone is racing for money.
  - pjmlp 2y ago
    Turns out supermarkets don't take pull requests, and not everyone wants to live in a community farm, doing NGO like work. Or placed in a less snarky way, capitalism spoils ideals.
    - wiseowise 2y ago
      Evil capitalism where people want to live nice and system provides means to do so.
      - pjmlp 2y ago
        I haven't said otherwise, only that people coming from FOSS like backgrounds might not get what they want.
treyd 2y ago
I've had this half-idea for recreating something like Garry's Mod in Godot for a while now. It seems like something someone would have created by now but it doesn't exist yet for whatever reason. Like, a framework for building first-person FPS-ish game modes and handling all the asset management, sync, etc, like GMod being built around Source does and just letting developers build the game modes without worrying about the annoying tricky stuff.

andyferris 2y ago

> Unlike other social platforms, Roblox’s revenue is nearly all via user spending rather than advertising. As such, Roblox pays 25% of its revenue to Apple and Google (30% of transactions on those platforms) whereas Facebook, Snap, et al pay effectively 0. Note that Facebook, which has structurally lower costs to service users than Roblox and is far more mature, has an operating margin of roughly 40% — if the company had to pay out 25-30% first, it would never have “tech company” profit margins, let alone profit dollars. Wow. I've never though about this before, but this is an awful second-order consequence of the high app store fees set by Apple and Google. It essentially incentivizes App makers to treat users as products not customers! (Not too surprising for Google, but certainly goes against Apple's public stance).

eru 2y ago
Well, the app stores could fix that by also demanding a cut from ad revenue.
- pxue 2y ago
  Well they did and Facebook refused. Hence the "do not track" feature.
  - bredren 2y ago
    Apple did have conversations about how to profit from Facebook’s apps. But there’s no evidence that the App Tracking Transparency was a direct result of failure to come to terms with Facebook on some type of revenue share. Even if a portion of the comprehensive set of protections included in ATT was specifically to target Facebook, Apple did not use it to punish Facebook. Apple’s customers did. Because when given a choice, 85-96% of all people across the entire planet did not want Facebook tracking them. If one was to speculate on The decision-making behind platforms’ leadership, it follows to consider Google’s reluctance to follow in the footsteps of Apple with ATT due to google’s own direct reliance on ad revenue. Apple is no saint, it’s made many compromises on user privacy in the face of business. But there’s no doubt in my mind that the position of selling products and services, including the distribution of others’ software is by far more consumer friendly than the quiet identification, data collection and targeting of individuals.

bentcorner 2y ago

In my (non-finance, parent of a roblox-player) opinion, the problem that Roblox has is that every single roblox game has a "roblox" essence. Every roblox game is undeniably roblox, and to broaden their market and attract higher-paying users, I think they need to fix that. There's a certain amount of jank in every roblox game, and that's part of the charm. But it's undoubtedly also a reason why people with fatter wallets don't spend more time in roblox. If you've never played a roblox game this might be hard to understand, but those of you who have spent time in these worlds with your kids you will know exactly what I'm talking about. Perhaps more finance-related, but the monetization of roblox games is also extremely haphazard - providing more guide rails and designing payments more "in platform" would go a long way towards spending confidence.

TulliusCicero 2y ago
Hard agree on the jank, but it may not be possible to fix that while keeping the upsides of the platform.
- Aeolun 2y ago
  I don’t think there’s anything inherent in Roblox that means the characters have to look and be animated like janky robots.
  - gradyfps 2y ago
    It takes a huge amount of effort to overwrite & re-animate the default ROBLOX characters and their animations.
    - Aeolun 2y ago
      Yeah, I meant from the perspective of the roblox devs. They can add a more organic default animation if they want. They choose not to.
bemmu 2y ago
I'm a dev on the platform and agree that there is a lot of jank in Roblox games. There's some indication of more polish coming, as recently many games have been rewarded (Pressure, Shovelware's Brain Game etc.) from having more polished animations. Devs respond quickly to seeing other games succeed and take notes. The tools are also getting better. It's gradually getting less nightmarish to try to import a working skeletal animation from Blender to Roblox Studio. Could Roblox games benefit from more polish? Absolutely, but it's less important than having quick access to a high variety of games with consistency in how you play them. Perhaps the most massive benefit of jank-tolerance is that it lets devs "gradient descent" towards a game players want. If you released a janky proto on Steam, you'd miss your shot, get an "overall negative" review and be done. On Roblox you can release a janky proto, see its metrics, improve over time until you have something people want.

IG_Semmelweiss 2y ago

I can't recall the exact company name (Edit: it was TCI), but this was a smart accounting move that made one of the big US telcos frogleap the competition in the race for connectivity. Basically, the company invested sufficient into long term assets, big infra investments like cabling, towers, etc. Because of accounting rules, they could choose to amortize all of that investment in a straight line over 30 years, OR accelerate depreciation in the short term. I believe the company always chose the latter, and the net effect of this was that every year the company would show a loss, 100% related to said infra investments. However, when you carved out depreciation, the company was clearly making increasing amounts of money. Further, all that fiber was capturing new clients, which was free cash flow which they would turn around and capture even more customers with a new round of investments. In effect, the use of accelerated depreciation helped the company manage its tax obligations while expanding aggressively. By deferring tax liabilities and reinvesting capital, the company was able to capture market share and grow its customer base. Eventually they had to show income and therefore pay the IRS, but by that time they were at the leading edge of the race and investors rewarded this company's CEO handsomely.

jld 2y ago
Sounds like John Malone at TCI Cable
parpfish 2y ago
John Malone at TCI? (I learned about it from HN here a couple days ago: https://news.ycombinator.com/item?id=41263855 https://news.ycombinator.com/item?id=41263855)
- IG_Semmelweiss 2y ago
  wow, that is correct. I read this in a book over 10 years ago, and now 2 articles about the same trick within the same week.
  - xNeil 2y ago
    Cable Cowboy, I'm guessing. Great book!

password4321 2y ago

20240404 https://news.ycombinator.com/item?id=39935526 https://news.ycombinator.com/item?id=39935526 https://news.ycombinator.com/item?id=39934101 https://news.ycombinator.com/item?id=39934101 (Roblox executive says children making money on the platform is 'a gift' ) >Arguing that it's a "gift" when they're taking a 75% cut is just offensive. 20220707 https://news.ycombinator.com/item?id=32014754 https://news.ycombinator.com/item?id=32014754 (Problems at Roblox) > Roblox is horrendous. It is as dangerous as any dark corner of the Internet, except that it appears child-friendly to parents.

hipadev23 2y ago
Try doing the math of accepting payment (Apple and Google take 30% off the top), then building, operating, and moderating a globally distributed auto-scaling gaming platform with 350M+ MAUs. 75% may be too high, but comparing it to say Steam’s 30% cut for distribution only is a grossly imbalanced comparison.
- password4321 2y ago
  Is 75% the minimum taken, only if you don't cash out Robux? Extra yikes. > the company taking 75% of profits and having a pretty massive minimum bar (100,000 Robux / $1,000 USD) which must be passed before the person gets to withdraw anything at all, which is then effectively double taxed because the company will then only give $350 for 100,000 Robux when cashing out to actual money
  - hipadev23 2y ago
    It’s a $105 minimum payout, not $1,000. And that 75% math is how much you earn, not a minimum or whatever you’re talking about. If players spend ~$1,000 of Robux in your game, you get paid ~$250.

andrewstuart 2y ago

Really interesting talk from Stanford's Entrepreneurial Thought Leaders podcast. 2018 but its still worth listening to. https://ecorner.stanford.edu/podcasts/when-the-platform-is-your-product/ https://ecorner.stanford.edu/podcasts/when-the-platform-is-y...

OuterVale 2y ago

Good content, but I must say that the site made it a difficult read. It seems serviceable on a phone, but on anything larger, it's questionable. The width of the text seems odd. It's too narrow on a medium viewport but too wide on a large one. Around 75 characters per line is usually the sweet spot for legibility. The font sizes also seem to be quite peculiar, being done with seemingly unneeded complexity: `font-size: calc((var(--normal-text-size-value) - 1) * 1.2vw + 1rem)`. Not quite sure this is necessary? My computer also seemed to really struggle rendering the page as it stuttered constantly while scrolling or resizing. Additionally (and this is moving into nitpicking territory), the navbar strikes me as a bit busy and overwhelming with its 15 items. Perhaps some culling or drop-down menus are in order. I can't say I'm a huge fan of what looks to be a distorted AI-generated header image either.

mahirsaid 2y ago

Why can't they just issue their own device to minimize app store fees. it seems to me the amount money going to app store real estate is more than enough to justify some sort of method of allowing their users to play the game without app store intervening. The total amount spent so far is astounding if viewed in figures. Minus half or quarter of the total time since appearing in app-store for it to be served to the large audience. The other half would have to be too much time spent content. Rest of that half of paid out fees could have more than enough to fund a plan B. Another reason why having the current ecosystem, where app stores pretty much dictate the destiny for a growing company. creating another device assuming it magically becomes a success, there is most definitely not a long lasting venture either. Bypassing the app store to achieve what exactly? okay this device plays roblox 'and what else can it do?".Discouraging to see companies like this be dictating how they grow and succeed. Only to grow in this manner and be topped out as there is no next phase after this growth, the atmosphere they're in is polluted and cloudy. The next phase in BIG tech is most likely not going to resemble this depiction, for more reasons than i can list here. The big players in tech are losing their ground day by day. Epic Games is relisted back on to the app store, not long ago they were fighting apple over the very same hurdle that Roblox is facing today. Epic Games did however get their way with Google and went on to send a clear message to the rest of the big tech players out there. I think a big change is near and if not than its needed.

pjc50 2y ago
> Why can't they just issue their own device to minimize app store fees. Lmao. Microsoft tried that and failed. Amazon tried that and failed. The market has enough room for iOS and Android and nothing else.
stavros 2y ago
> Why can't they just issue their own device That "just" is doing a lot of heavy lifting. Don't worry, though, your iPhone will soon be your own to do whatever you want with, thanks to the DMA. It already is, if you live in the EU.
- CuriouslyC 2y ago

Aeolun 2y ago

So the real reason they’re not profitable is because they’re doing some accounting magic that counts their income spread over the next 27 month, instead of all up front. They are cash flow positive, it’s just that their income numbers are lagging some 2 years behind.

hipadev23 2y ago
Roblox absolutely doesn’t want to do this “accounting magic”. They originally filed their S-1 with more typical revenue recognition and the SEC forced to change to this frustrating model. [1] [1] https://www.barrons.com/articles/the-sec-told-roblox-to-change-its-accounting-heres-what-it-means-for-the-stock-51617217979 https://www.barrons.com/articles/the-sec-told-roblox-to-chan...

raister 2y ago

Roblox is a huge problem for me, as a parent of a 8y kid. Let me explain: I try to block violent apps in his tablet using Google's Family app, however, Roblox internally keeps 'offering' my kid almost any game, whatever if there's violence, drugs, killing others, and so forth. It's a headache and a source of fights, so, I thank the responsible (/sarcasm).

Quothling 2y ago
Roblox really needs to create some better parental controls so that it includes the option for a parent to be required to "ok" what they call "new experiences". The various limits you can set on content are great in theory, but they are apparently impossible for Roblox to enforce and as such are meaningless. I do like Roblox from a creator perspective (I'm not a creator) since it's rather easy to guide your children into building games rather than "just" consuming them. Something which is very hard with basically everything else they do digitally.
endtime 2y ago
My kids use Roblox. There _are_ parental controls you can enable through Roblox. When my twins turned nine, I had to enable 9+ games for them. I believe the age cutoffs are 9+, 13+, and 17+. I think anything with drugs should be 17+, and realistic violence/blood might be 13+? Not totally sure. (Disclaimer: I'm a Roblox employee, but speaking only on my own behalf, and don't work on anything related to age guidelines.)
- loloquwowndueo 2y ago
  I have my kid’s set to “all ages” (the most “restrictive” category with the most “appropriate” content) and he does get gun violence, disturbing and scary games, and games based on non-kid characters (The Amazing Digital Circus). Sometimes a game is shown and when kid tries to access it he gets a “this game isn’t allowed by your age category” or some such. This is an unbelievably dishonest way to tempt kids into content that’s not for them. If the content is not usable for them it should just not show, period. If you work at Roblox maybe escalate the fact that content filtering by age category is totally worthless and could use fixing.

learlu 2y ago

One thing the article doesn't touch on is that Roblox has yet to tap into the China market, where 25% of the world's gaming revenue reside.

kilolima 2y ago
Given China's experience with the West's sordid attempt to subvert them via opium, it seems highly unlikely that roblox would ever be legalized there.
- learlu 2y ago
  Roblox has a joint venture setup with Tencent to enter that market. The Chinese gaming market require a gaming license to enter, and it seems they've figured out a way to do it.

ro_bit 2y ago

> When a user buys $30 in Robux, the platform’s virtual currency, Roblox recognizes $30 in bookings. An average of $3 of that $30 is spent on a “consumable” (i.e., a single-user or otherwise perishable good), and so Roblox recognizes that $3 as revenue right away. The remaining $27 is spent on “durable” goods such as an avatar. As an avatar can and often will be used over time, Roblox recognizes this revenue over the average lifetime of a Roblox user I'm not sure if I'm understanding this point correctly. From my understanding, wouldn't roblox consider their revenue in a given month to be 1/9th of this months purchases + 1/27th of last month's purchases + ... If so, why would their revenue recognition make them unprofitable? Every month they only realize 1/9th of revenue from that month, but that would be offset by the other 8/9ths of revenue coming from the last 27 months. Wouldn't it just make their recognized revenue a frontloaded rolling average?

yes_man 2y ago
It could be their active user count is increasing very fast and that is eating the rolling revenues via infra costs, customer acquisition costs, perhaps they are subventing that growth in other ways like discounts to get players into the paying segments etc.
mcherm 2y ago
If there were no growth, that would eventually be true (after 27 months). But there is a lot of growth.

ElCapitanMarkla 2y ago

My kids have started playing Roblox recently and they have started asking for some Robux so they can buy crap... I really don't get how so many people are into spending dollars on this stuff. Everything they wanted was ~$10-20 NZD and it was just throw away stuff, like a costume, etc. And then it's only useful in that one game you have brought it for. It blows my mind that it ever got this popular.

jack_pp 2y ago
Because kids aren't utilitarian. They want shiny things impulsively now in whatever niche game they are playing at the moment. Or want to keep up with their friends who got cool stuff to keep status. Doesn't matter to them that they'll switch games in a week and lose everything.
- jack_pp 2y ago
  To add to this, for them money is like ice cream, comes from parents rarely and gives them temporary pleasure. That's why I think it is good to pay your kids for chores or good grades so that they start learning financial responsibility early. Sure they'll blow their money on useless stuff at first but then they'll have none for some other thing they wish they had money for and will learn to choose more wisely in the future
  - hypertele-Xii 2y ago
    My dad let me gamble my allowance against himself in poker. Lost it all, obviously. Was quite heartbroken he wouldn't give it back, but I sure learned a lesson :)
  - fifticon 2y ago
    I concur with this. Our kid can earn robux doing chores, and she only earns them once in a while. It often leads her to a period of deliberation, where at first she's like 'I so much need this, I must do whatever chores it will take!'. Then gradually as the minutes go by, she gets doubts, and at some point flips into "No. Way. THAT is NOT worth THAT MUCH WORK!" Whenever this happens, I get sort of proud or satisfied. A lot of times it doesn't happen, she does the chore and gets the reward. But other times, especially for costly idiosyncratic choices, she comes to her senses. The insane spending sprees/binges shrink a lot, when they are expressed in "how much vacuuming and floor washing am I willing to endure?"

throwaway984393 2y ago

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alvah 2y ago

"...at a minimum, they will substitute a 30% fee with a 4% credit card processing expense..." Which large corporation is paying anything close to 4% for credit card processing? Based on what's available to me in my small business, I'd be astonished if anyone doing any significant volume was paying as much as half of this percentage.

nottorp 2y ago
Are you selling something with some utility to adults? And as a consequence you have zero to very few chargebacks, because your customers aren't going to be overriden by their parents? I can imagine there are a lot more problems with kids' spending on Roblox, which would bring the processing fees way up.
- alvah 2y ago
  Do excessive chargeback levels add to the processing fees on every transaction? If so, that could explain the higher cost.
mrguyorama 2y ago
Roblox has INSANE fraud patterns and chargebacks

Panzer04 2y ago

w.r.t article. Very wordy, could easily have been summarised. I guess if your costs are high enough, you can eat any amount of profit. They clearly need to get their expenses under control (if they care about generating an actual profit). There's only so much you can grow once you get to a certain threshold, and they must be getting near it. Spending 2b on opex seems kinda crazy (3.2b revenue vs 1.2b income). Most games are opex-light, capex-expensive. Their capex is definitely not cheap either, though that seems to be a tradeoff they choose to have. Of course, this all presumes the people running the company care about generating a profit (by no means a guarantee!). I'm sure all of the employees are making out like bandits, based on other commenters, and if management is happy to spend the money, well, that's all there is to it. It would be hard for anyone to argue with their success in growing their userbase, if nothing else.

nottorp 2y ago

I don't understand all those terms in the article, but how much of their "unprofitability" is actually creative accounting? And how is this Roblox better than the (pre MS) Minecraft?

radicalbyte 2y ago

I do not believe for a second that < 50% of Roblox users are > 13. Two of my three kids all have their ages set to 13+ because they decided to combine the age-related features you do want (limited chat, no tracking etc) with the content lock. I'm happy for my kids to play "Tree-house of Horrors" style games but not to be groomed by older player. Yet Roblox has no option for it.

decremental 2y ago
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radicalbyte 2y ago
@decremental nah I used it to teach them, I also regularly check their messages in game. Most of the problems they have are other kids screaming racist things or swearing.

paganel 2y ago

> Everyone knows Roblox is huge. I had to web search for what this thing was, apparently a game for small kids? Why should "everyone" know about video-games addressed to children?

rwmj 2y ago

I'm surprised that if you're doing $billions through one of the app stores you can't negotiate some large discount from the usual 30% commission?

shruggedatlas 2y ago
What leverage would they have in those negotiations?
- rwmj 2y ago
  That they won't write an amicus brief for the Bureau of Competition about the app store monopoly?

shkkmo 2y ago

Roblox is a destable scummy company that depends on the exploitation of children to make money. They took the exploitative practices of microtransaction based games, targeted them at children, then decided to use child labor to create content inside an expoitatively taxed monetization system, then decided to abdicate all their responsibility for responsible community management to protect these children by shutting down their own forums and pushing everything to Discord. Now we have children working for unvetted strangers with no labor protection and no oversight.

beart 2y ago
Agreed. And it goes beyond jaded monetization. A popular player and predator was only recently arrested after initiating physical contact with one of the child laborers. The game is simply not a safe environment for children.
- gradyfps 2y ago
  Pedophilia & child-predation have been an open secret to anyone socially involved in ROBLOX for the longest time. The amount of random 18+ people interacting often and without guardrails with 13/14/15 year-olds is "normalized" to those in the communities.

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bilsbie 2y ago

Can anyone explain the business model? Do they take a cut of robux purchases? Is that the main source of income? How do game makers get paid?

elif 2y ago

I'm sure it makes sense to people smarter than me but I just don't get building a software business with <5% margins. What's the point? Clearly you failed somewhere along the lines at the whole thing you set out for, which is a clear profit engine... So how do you end up with numbers that look like you are doing easily copyable manufacturing with a tight bottom line? I think too much focus on product growth and organizational growth, and not enough on efficiency, scale, and profit. The best times I've had at startups were when we were lean, and profiting >50%. The business was easier, we had more flexibility for decisions, morale was great... But then they all seem to grow into 0-10% profit corporate behemoths where each employee can't even tell if the job they do is worth their paycheck, it just becomes awkward, slow, uninspiring work. And then you find yourself robbing more single parents checking accounts than anyone on earth, but not even profiting. How depressing.

Workaccount2 2y ago
In start-up spaces you usually don't have stiff competition. Once you grow, and it becomes clear you have a viable market, competitors move in and prices start to get ground down.

h1fra 2y ago

tl;dr they are profitable, but they don't want to show it. Once they want to reach profitability they will fire (layoff) most of the R&D department and make billions.

GNOMES 2y ago

My kiddo has easily spent 500+ on Roblox across birthday/Xmas gift cards/chores. I can't stand that almost all of the games seem to have a pay to win aspect, or are heavily advertising every chance they get. As a gamer dad, I try to show my kid better games to play, but because they aren't free, his friends can't play. Just drives him to keep playing and wanting more Robux. It's compounded when his favorite Youtubers play... Seriously don't understand how Roblox isn't being investigated for predatory practices. I imagine they can hide behind the fact users are making most of the mini games, and they are just providing a platform.

ToucanLoucan 2y ago
> Seriously don't understand how Roblox isn't being investigated for predatory practices. Because if you held game companies responsible for deliberately fostering addiction in their customers to earn a profit, we'd have scores of industries behind them in line to be brought to heel the same way and the stocks for tech companies, game companies, tobacco companies, casino companies, alcohol companies, etc. etc. would all implode. There's no danger of that of course because we long ago decided as a society that we're fine with vulnerable populations being put through an economic woodchipper to fuel our retirement funds, and that's been status quo for so long that I sincerely doubt there's any way to actually change it.
- GNOMES 2y ago
  Understand your point, but Epic (Fortnite) and games like Fifa have gotten sued or major slap on the wrists for the same practices
  - latexr 2y ago
    > major slap on the wrists That doesn’t make sense as a concept. The point of the slap on the wrist is that it’s ineffective/insufficient punishment to change behaviour. You’re essentially saying they got a big small penalty.
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kazimarslan 2y ago

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T3RMINATED 2y ago

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niemandhier 2y ago

I bought my son a ps5, Hogwarts Legacy and told him Roblox is never going to be on any device we own or in any network I control. In addition to being mostly pay-to-win the platform has a pedophile problem. https://www.bloomberg.com/features/2024-roblox-pedophile-problem/ https://www.bloomberg.com/features/2024-roblox-pedophile-pro...

johnnyanmac 2y ago
I know roblox is the most popular target. But really, any network enabled platform with a large base of children will have a grooming problem. I was surprised reading the article that Roblox already spends 28% of revenue on Safety and Trust. Maybe Roblox is just that gigantic a platform to where that's still not sufficient.

williejanice 2y ago

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consf 2y ago

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kin 2y ago

Everything I've seen from Roblox just seems so rough across the board. Poor UI, poor graphics, poor gameplay. There's a sense of freedom that is quite refreshing kind of like Gary's mod. I'm just so surprised that with such high adoption, none of the money is going into make anything remotely polished.

hipadev23 2y ago
> I'm just so surprised that with such high adoption, none of the money is going into make anything remotely polished. There are numerous polished games on the platform, but the most of the players are younger kids on hand-me-down mobile devices, so the most popular games tend to be easy to run casual games. Here are a few examples of what you're looking for: * Frontlines: https://www.youtube.com/watch?v=SA71d3O1ID0 https://www.youtube.com/watch?v=SA71d3O1ID0 * Primal Hunt: https://www.youtube.com/watch?v=X_lenB5MTTU https://www.youtube.com/watch?v=X_lenB5MTTU * Riotfall: https://www.youtube.com/watch?v=1E0kEFxBTEM https://www.youtube.com/watch?v=1E0kEFxBTEM
- realprimoh 2y ago
  The fact that these are Roblox games are blowing my mind. Wow!
thomastjeffery 2y ago
Polish is a double edged sword. Its other side is decisiveness, which is diametrically opposed to engineering freedom. It's a hard problem, though I agree there is some low hanging fruit that Roblox seems ignorant to. I think the biggest reason for its success is an extreme lack of competition. Nearly every time someone makes a good enough (use friendly) sandbox engine, they wrap it in copyright and market it wholesale; and that makes decisiveness (polish) a high priority.

nsxwolf 2y ago

They have the craziest most difficult interview process I've ever seen, like beyond quant level. But I don't know why. My kids play it and it feels like the jankiest most busted-ass 3D engine that ever existed. I'm sure all the secret sauce is doing all this stuff at scale, but what do Leetcode hards in 20 minutes have to do with that?

guax 2y ago
Most interview "rituals" are about gatekeeping and not actual talent acquisition. I'm unfamiliar with theirs but it sounds like it from the descriptions and company output.
camdenreslink 2y ago
It's just a hazing ritual. Somebody started it when it was a small company, and all of them had to go through it so new hires will too.
_gabe_ 2y ago
Most games have a lot of “jank”, even triple A games. I feel like most people underestimate Roblox because of the graphics, which is 90% how well you can create assets, and 10% programming skill. The real technicality of Roblox comes from its massive online nature, custom built-in editor + IDE combo, custom fork of Lua to add typing, sandboxing, and other optimizations, the social media aspect of the platform, the in game monetary system, and more I’m not thinking of. If all you’re doing is characterizing it as a 3D engine, you’re missing pretty much everything about the platform that makes it work. Nobody looks at VsCode and asks why it’s hard to program that, or Facebook, or Unity, or MMOs, or Stripe. This platform is all those things in one. And I may be wrong on some of the details, but the stuff those devs get to work on is undoubtedly more difficult than the React apps 90% of developers do in their day job that they also had to grind leet code for.

peanut-walrus 2y ago

They have positive cash and are paying their employees well. That's what a company should be doing rather than paying peanuts and hoarding wealth like a dragon. Especially as it seems they are actually profitable, just hiding it with accounting.

hipadev23 2y ago
> just hiding it with accounting. I posted this in another comment, but the deferred revenue recognition was forced by the SEC [1]. [1] https://www.barrons.com/articles/the-sec-told-roblox-to-change-its-accounting-heres-what-it-means-for-the-stock-51617217979 https://www.barrons.com/articles/the-sec-told-roblox-to-chan...

aaroninsf 2y ago

FTFY: "biggest surveillance effort targeting children"

resource_waste 2y ago

Me any my wife's experience with roblox: >Find good games through reddit recommendations >Play the games, most are novel and remind me of WC3 customs >Show our non-gamer friends the quirky games Its pretty cool, but there is soo much garbage to get past.

tdiff 2y ago

I find the whole idea of money-driven game environment to be so repulsive. It's like ultimate goal of earning money is put above having fun. Not something it'd love my kids to experience.

RIMR 2y ago

>But as COVID receded into memory, Roblox shifted from “new” to “familiar,” "New"? Roblox came out nearly 20 years ago... It went from "cult classic" to "viral phenomenon".

dingodongo1 2y ago

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formerlurker 2y ago

Roblox exposes children to predators. I hope parents pay more attention and get their children out of Roblox because it doesn’t seem Roblox will do anything. Source: https://www.bloomberg.com/features/2024-roblox-pedophile-problem/#:~:text=More%20than%2040%25%20of%20its,data%20compiled%20by%20Bloomberg%20Businessweek https://www.bloomberg.com/features/2024-roblox-pedophile-pro....

Sparyjerry 2y ago

Roblox built up by allowing users to create 'mini-games' that copied every single major title out there, but keep your avatar or a portion of it across games. When I watched my kid play it was littered with copyrighted music, games, and characters everywhere. It's interesting that once it got in trouble with some copyrights it still survived - although I suspect that is just because everyone who could sue them hasn't yet.