If you play Fortnite UGC this week you might see our product placements for Ballboyz Soap--clinically designed to cure middle & high school athletes of embarrassing acne.
Gaming got written off post-COVID while everyone chased AI, but it’s still a ~$200B market and the incumbents are weaker than they’ve been in years.
Last cycle gave us Fortnite and Roblox. This cycle will do the same.
At gaming multiples vs AI at 50x revenue, it’s one of the best asymmetric bets in consumer right now. Watch.
Roblox is now going to take a percentage of all in-game brand sponsorships.
It’s like if YouTube demanded every creator with a brand deal to pay a percentage for promoting the brand on the platform.
I’m pretty bullish on Roblox long term w/ Blake but if you want to make the counter argument here it is:
1. Roblox takes 76.5% of IAP transactions (ouch). Top creators often find players != profit.
2. Roblox’s engine is simply bad (Luau)
3. There’s other popular UGC worlds out there for F2P indie studios to build on with better engines & margin (e.g. Minecraft, UEFN, ZEPETO) and it’s only going to get MORE competitive (e.g. hoyoverse + GTA 6).
4. Top creators graduate Roblox for another platform & when content goes so does Roblox’s distribution.
5. Right now one big trend that’s happening amongst indie devs is platform diversification: Gamefam, Voldex, Lovespun etc. — top Roblox creators now building on ALL UGC platforms. So friction would not be hard for these creators wind down Roblox if value isn’t there.
My POV: I think Roblox will be a strong “forever platform,” but I disagree it’ll have a monopoly.