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While Fortune100 companies around the world hire self-proclaimed Web3 consultants to figure out their “metaverse strategy” Roblox’s stock is experiencing some serious lows. The often labeled “Covid stock” is seeing “back to normal” in a different light, as kids go back to classrooms and soccer (football!) Practice. Meanwhile, venture capital keeps rushing into blockchain games ($ 1B in funding in the last month alone), and pretty much any startup pitch deck mentioning “Web3 disruption” on its cover slide.
When Adidas buys virtual lands in The Sandbox and teams up with the likes of Bored Apes, and when Nike acquires RTKFT and co-drops the first NFT, launching a mini-world in Roblox like Ralph Lauren or Vans did recently, can feel so 2021 . But make no mistake. Roblox remains, by a mile, the closest thing to a “metaverse” where people actually spend time and do things at scale. In the chaos of virtual real-estate booms and NFT ponzi schemes, can Roblox’s strategy of not chasing the latest buzzwords and cash-grab opportunities help them win in the long run?
Roblox is the digital economy of the future, today
When referring to video games as the tipping edge of the metaverse, we mostly think of a place where people hang out for more than just playing, joining events, and showing off their outfits. Roblox already takes things further with an early version of a structured and sustainable virtual economy. One with goods and services, tools to create them, a currency and marketplace to sell and re-sell them (last year a virtual Gucci handbag sold for + $ 4000, more than the actual bag), all resulting in the creation of actual jobs.
It’s also a community that grew 40% year-on-year, managing to attract higher age demographics beyond preteen (17-24YO grew + 51%) and penetrate new markets – India and Japan grew over + 100%. And with the recent launch of Roblox Education, including a $ 10M fund to support developers bringing educational Roblox experiences for teachers to use in the classroom, the platform can get an entire generation to see Roblox as the future of not just play but also work.
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Roblox has never been about chasing the hype anyway
Roblox is not the only metaverse stock that is underperforming. Facebook’s Meta, Nvidia, Marvell, Microsoft are all in free fall. Zuckerberg’s announcement to rebrand Facebook as Meta was the inflection point for the market, and maybe did the whole ecosystem a disservice. Soon after, the price for Decentraland’s virtual currency MANA skyrocketed, eventually resulting in a $ 2.4M land sale. The Sandbox received a $ 96M investment from Softbank, and $ 4.5M was spent in-game to acquire a plot next to Snoop Dogg’s virtual mansion. Axie Infinity just hit $ 4B in NFT sales.
Yet in practice, these worlds still feel very much like early-access versions (not to say ghost towns) with an often expensive entry ticket. That’s the dream we’ve been sold recently. Not the dream of a virtual world where we can escape and have fun, the illusion that if we bet on the right piece of land, game asset, or expensive JPG, we can cash out and live happily ever after. Lately, the narrative around the metaverse has been obsessing with short-term cash-grabs, when Roblox has been innovating, brick by brick, around a clear vision for the past 17 years.
Roblox’s position on NFTs is yet to be determined
The elephant in the room is this: Can Roblox win without making some of their assets NFTs, allowing players to retain the value they put into the games, access to a broader secondary market or even (let’s dream big) potential interoperability between other worlds?
For now, Roblox argues that off-platform transactions are impossible to monitor and block claims. Given how especially young Roblox’s audience is, the company has always taken safety very seriously (something blockchain-based worlds could also learn from).
It is not clear that Roblox is kicking NFTs out of the platform though. Certain Roblox experiences are currently making digital items available on NFT marketplaces like OpenSeas. What’s for sure is that if the company keeps experimenting – it is not jumping on the NFT bandwagon just because it’s the new feature to add to be deemed metaverse-ready (or make forecast analysts happy).
NFT enthusiasts will argue that Roblox wants to control and keep players locked inside the ecosystem, preventing a more lucrative economy for players. NFT skeptics will say that unless digital ownership can add genuine value and utility to the actual Roblox gameplay, why take the risk of seeing a sustainable built-in virtual economy, turn into a gambling platform?
The next iterations should be enough for markets to get excited about
Rolbox isn’t joining the NFT debate for now, so it seems. Instead, the company is making progress on more important fronts: what players, not just investors, care about. In the coming months, updates will make in-game fashion much more realistic and desirable, developers will be able to test new facial animation features, and voice chat will continue to improve and roll out. Interestingly, Roblox will also make it easier for players to drop limited edition items and re-sell them – that is to say non-NFTs assets, all inside the Roblox ecosystem.
“Self-identity is a crucial pillar of the metaverse” said Roblox CEO David Baszucki. Just ask any 14-year-old kid if they care whether that identity is built on the blockchain or not. It will then become clear that for now, in the midst of Wall Street and Silicon Valley’s tendencies for self-fulfilling prophesies, no one shines a light on our future digital lives like Roblox.
Samuel Grinfeder, creative strategy director and metaverse enthusiast at Superunion.
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