“Roblox is an amazing community where people are creating together,” said Roblox CEO and co-founder David Baszucki said in an interview with CNN Business Wednesday. His stake in the company is now worth more than $4 billion.
That’s a big — and rapidly growing business.
Roblox posted revenue of nearly $925 million last year, up 82% from 2019. The company also said earlier this month that it now expects sales to rise about another 60% this year to a range of $1.44 billion to $1.52 billion.
Roblox had 32.6 million daily active users at the end of 2020 and the company is predicting that it will have 34.6 million to 36.4 million by the end of 2021.
The majority of the company’s players are kids 13 and under. But Baszucki said that the company is approaching a point where most of its players won’t be tweens. He said the group of 17-24 year-old Roblox users is growing very rapidly.
But Roblox noted in its paperwork with the Securities and Exchange Commission that having such a young user base will lead to more scrutiny of the platform.
“The increased use of interactive entertainment offerings like ours by consumers, including younger consumers, may prompt calls for more stringent consumer protection laws and regulations that may impose additional burdens on companies such as ours,” Roblox said.
That means that Roblox has to make sure the game stays safe for minors playing it and that privacy practices are strictly enforced. The company also has safeguards to ensure that younger users aren’t spending too much to buy Robux.
Baszucki said he was excited about the stock market debut, adding that it is good for longer-term investors and employees in Roblox, which was founded in 2004, to take part financially in the company’s success.
Roblox listed shares directly on the New York Stock Exchange as opposed to issuing new stock in an initial public offering. The NYSE had set a reference price of $45 a share for the stock.
“For us, a direct listing seemed natural. It brings the whole community together and everyone is using the same price at the opening of trading,” Baszucki said.
So what’s next for the company now that it is publicly traded?
Roblox is still not profitable. It lost more than $253 million in 2020, up from a loss or about $71 million a year earlier.
Baszucki said the company will look to generate more sales from advertising. He stressed that it will be organic. Users, for example, can pay to wear Nike shoes in the game as opposed to seeing big Air Jordan billboards in Roblox.
“The small amounts of advertising we have been doing is immersive and authentic,” Baszucki told CNN Business.
Baszucki, whose own Roblox user name is builderman, added that he’s not overly worried about Roblox being a fad that will eventually suffer from a loss of popularity.
He noted that the game has continued to add users even as gamers have other choices like Minecraft, Fortnite and the increasingly popular Among Us to play during their free time.
More stock market debuts are expected later this year as well, with Instacart, Coinbase and Robinhood among the most eagerly anticipated new listings.