How Roblox Plans To Copy Minecraft

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How Roblox Plans To Copy Minecraft
March 17, 2017

This week, Roblox Corporation, the San Mateo, California-based developer of the popular online social gaming platform for kids known as Roblox, announced the closure of its first private equity offering in more than five years.

 

The funding round, which raised $92 million for the company, was primarily backed by Meritech Capital Partners, a venture capital firm that was an early investor in many tech giants such as Snapchat, Facebook and Index Ventures. In addition to expanding the company’s mobile strategy, the funds raised will also be used to repurchase shares from those employees who wish to cash out of some of their equity. (For related reading, see: Is Microsoft Stock a Bargain at Tech-Bubble Highs?)

Minecraft Rival

 

The game Roblox allows its players to create their own virtual worlds, and is often described as being very similar to Microsoft’s Minecraft video game. Microsoft acquired Minecraft for $2.4 billion in 2014. The funds raised from the recent funding round could help to better position Roblox to compete with Minecraft. The main ages for the users of both gaming platforms ranges from 6 years to 16 years.

 

According to the company’s corporate website, Roblox’s platform currently sees 48 million monthly users while a March 2017 article in Bloomberg reports that Minecraft has a total of 55 million active users. 

 

The Business Model

 

Although Roblox declined to disclose the valuation at which their recent financing round was offered, an article that was published in Forbes last summer revealed that the company had realized more than $50 million in gross revenues in the year 2015. The company primarily makes its money by selling a virtual currency to its players and also by charging a subscription fee to developers who use the platform to develop games. Roblox also takes a commission from purchases on games that were made by developers. Some of Roblox’s top game creators are reportedly making as much as $50,000 a month.

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