Comment: Roblox’s direct listing puts the games industry’s hottest trends to the test

Craig Chapple is Mobile Insights Strategist, EMEA at mobile intelligence firm Sensor Tower and was previously Senior Editor at PocketGamer.biz. www.sensortower.com

While 2020 was the year of M&A in the games industry–a trend that continues–2021 looks to be the year of the IPO. By floating shares–such as through a direct listing, a traditional initial public offering, or one via a SPAC–publishers are striking while the iron is hot following years of growth in the sector. Last year saw a particularly large surge in engagement and revenue for many, in large part a result of the COVID-19 pandemic and lockdowns.

By going public, publishers are hoping to build up a warchest to either invest in their existing portfolio and teams, or expand aggressively, likely through M&A. 

While it’s an exciting time for the games industry, which is attracting unprecedented levels of revenue and investment, going public isn’t without its risks. Coming with it is increased scrutiny of their business practices, while questions will be raised on whether some of these companies should be going public at
all–might it all end in tears?

Roblox Rocket

The games company leading the charge of going public is Roblox, which finally had its direct listing in March, instantly making a publisher that has yet to be profitable larger than EA, Take-Two, and Ubisoft, at least by current market cap, which stands at approximately $41 billion at the time of writing. It’s a blockbuster listing for Roblox and the games industry as a whole, and the company itself perfectly encapsulates many of the major trends we’re seeing in the sector.

For years, Roblox has been quietly building up its player base and unique platform focused on user-generated content, having officially launched back in 2006–even before Minecraft. It’s only in the last few years that the title has really begun receiving mainstream attention, and its impressive numbers reveal why. 

On mobile alone, Sensor Tower estimates show Roblox has surpassed $2.5 billion in player spending from the App Store and Google Play, with close to $1.2 billion of that generated in just 2020. Across all platforms, the title now welcomes 37 million daily active users, a staggering figure. And as Roblox’s engagement and revenue rises, that helps its network of creators grow, too.

Roblox seems to be at the forefront of many of the key industry trends we’re seeing right now–a lockdown bump in popularity, M&A activity, going public, providing a place for players to connect, and in-game events such as live concerts that are generally unrelated to the core gameplay. It’s also breaking into China through a Tencent partnership, focused for now on education. On top of it all, Roblox is a leading candidate for one of the hottest buzzwords in the industry right now: the Metaverse.

Roblox’s hefty valuation seems to come from its staggering engagement figures, and the bet that the title can bring us a step closer to the Metaverse. Only time will tell if it can achieve these lofty goals, but if you’re looking to monitor industry trends, Roblox provides a good compass for where they’re headed–and it’s hopefully not a direction where they all go bust.

Craig Chapple is Mobile Insights Strategist, EMEA at mobile intelligence firm Sensor Tower and was previously Senior Editor at PocketGamer.biz. www.sensortower.com

About Seth Barton

Seth Barton is the editor of MCV – which covers every aspect of the industry: development, publishing, marketing and much more. Before that Seth toiled in games retail at Electronics Boutique, studied film at university, published console and PC games for the BBC, and spent many years working in tech journalism. Living in South East London, he divides his little free time between board games, video games, beer and family. You can find him tweeting @sethbarton1.

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