Roblox surpasses $ 45 billion on first day of trading as a game boom

A year ago, when a pandemic pushed people indoors, many played games on their iPhones, built gaming computers, and explored the latest blockbuster titles on their Xbox and PlayStation consoles. Spent time.

For video game companies, that meant a surge in cash. According to the NPD Group, spending on games in the United States last year reached a record $ 56.9 billion, up 27% from 2019.Sony released Playstation 5 In November, Microsoft recently reported a 62% profit surge. Aggregate $ 5 Billion in Quarterly Game Revenue For the first time, I was helped by the sale New Xbox device..

On Wednesday, the impact of the pandemic boom on the game was even more pronounced. Roblox, A game platform for children has been released.

The Silicon Valley company closed its first day of trading at $ 69.50 per share, rising from the base price of $ 45 set on Tuesday. Roblox is worth $ 45 billion, up from $ 4 billion a year ago. The company went public on a direct listing with no new shares issued.

“The gaming industry is swimming in cash,” said Joost van Dreunnen, a professor at New York University who studies the video game business. “These people, these companies are just spending money.”

Roblox’s performance was another sign of an increasingly hot public offering market. When Airbnb and DoorDash were released last year, their stock prices quickly skyrocketed, There was a new stock market bubble..Investor demand for fast-growing young companies hit Roblox in December Delay listing Accurate pricing of stocks was too difficult.

That hype was exacerbated by Roblox due to the euphoria of popular video games.Apart from last year’s new consoles from Microsoft and Sony, mobile games like Among Us Internet phenomenon Essentially overnight. Video game makers such as Take-Two Interactive and Electronic Arts have tried to overpriced each other to buy smaller competitors. Hundreds of game startups were born during the pandemic, said Evan Van Zelfden, managing director of advisory firm GamesOne.

“There seems to be a new start-up that is funded almost every day,” he said. “Everyone wants to be the next Roblox.”

But how long the frenzy can last is increasingly questioned. Vaccination started, Pandemic restrictions relaxed In some places, the behavior of the game may start to change. Investors aren’t thinking about what will happen when the pandemic subsides, Van Drunen said.

“You’ll have much less time to play Roblox,” he said.

Roblox CEO and founder David Baszucki did not expect the platform to bleed players when the pandemic was over and children returned to playing with friends outside in an interview Wednesday. Said that.

“We don’t think we’ll lose all that, or all the great people we’ve gathered,” he said. His stock at the company was valued at approximately $ 5.5 billion at the end of the transaction.

Roblox was founded in 2004 by engineers and entrepreneurs Baszucki and Erik Cassel. (Mr. Cassel died of cancer in 2013.)

Launched in 2006, the site is an online universe where players can interact and choose from over 20 million unique games. You can then use your avatar to escape from prison, explore the tropical jungle, or adopt your pet. In addition to premium membership, players use a digital currency called Robux to pay for avatar items and clothing.

For years, Roblox has steadily gained popularity with a young audience. That growth was supercharged by last year’s pandemic. According to the company, an average of 32.6 million people log in to Roblox daily, almost double the 2019 average of 17.6 million. Roblox is unprofitable, but last year’s revenue was up 82% to $ 924 million.

Over the years, Roblox has raised $ 871 million in funding. Its largest investors include Altos Ventures, Index Ventures and Meritech Capital Partners.

Roblox has also enriched many developers who manufacture games and digital accessories and divide the company and profits by 50:50. Those who create the most popular Roblox games can earn a 6-digit salary. Many of the developers are teens and young adults who grew up on the platform.

One developer, Anne Shoemaker, 21, said she has earned more than $ 500,000 from the platform since the pandemic began. She said she used a portion of that money to hire two employees and twelve contractors.

The pandemic-fueled success “was the impetus needed to make Roblox a full-time job,” she said.

After postponing the listing in December, Roblox was to be released in January. However, the Securities and Exchange Commission postponed that date after asking the company to change the way it calculates revenue. Roblox has been compliant since then.

At an investor event last month, the company’s CEO, Craig Donato, said Roblox is trying to increase its users, primarily by appealing to international viewers and older gamers. He said the company is also working towards more sophisticated graphics, more complex games, and increasingly realistic avatars.

According to the company, the ultimate goal is to create a “metaverse.” This is a predominantly science fiction-only concept that describes a shared online universe where people can live and interact as if they were actually there. Roblox has held business meetings on the platform and promoted virtual concerts in its universe.

On Wednesday, Roblox employees gathered avatars on the digital version of the New York Stock Exchange to celebrate their listing.

“We believe Roblox and Metaverse will join these as essential tools for business communications, just as mail, telegraph, phone, text and video are collaborative utilities,” Baszucki said on Investor Day. It was. “Ultimately, I might shop in Roblox someday.”

But before the metaverse occurs, Roblox needs to navigate what to do when the pandemic declines.

David Gibson, Chief Investment Officer of Astris Advisory, a financial advisory firm in Tokyo, said: But he said he wondered how long it would last.

Roblox surpasses $ 45 billion on first day of trading as a game boom

Source link Roblox surpasses $ 45 billion on first day of trading as a game boom

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