What Is Roblox? Gaming Firm Valued at $45.2 Billion After Going Public on NYSE

Gaming company Roblox went public on the New York Stock Exchange (NYSE) on March 10 and quickly surged above its reference price of $45 per share.

The company's stock was valued at $69.50 at close—up 54.4 percent. Prior to its NYSE debut, Roblox had only traded in private markets.

The gaming company is known for its popular online video game of the same name. Since launching in 2006, Roblox has amassed a huge and active community of players.

Roblox has since grown its online community to 32.6 million active users every day, and from the 12 months ending December 31 2020 generated revenue of $924 million

The game is what is known as an MMO, or Massively Multiplayer Online game. In games of this type, large numbers of people are able to play and interact with one another simultaneously.

Roblox works by allowing players to create their own games within the game, providing scope for creativity. Some games are simple, with the objective being to fight other players in a large free-for-all.

Others are completely different, with one game allowing players to take control of a pizza shop, manage it, and earn in-game money together.

Members of the Roblox community who make the games within the game are known as developers, and by doing so they can earn real-life money. Roblox said in July 2020 that it expected its developer community to collectively earn $250 million that year—a marked increase from the $110 million earned in 2019.

These developers earn money through the sale of in-game products, while Roblox also pays out a certain amount of money to them based on how popular their games are with users.

Roblox is particularly popular with children. In 2019 it was estimated nearly a quarter of 10 to 12-year-olds in the U.K. played Roblox, based on a survey of 20,000 children by research firm KidsInsights.

In March this year, KidsInsights said Roblox outscored all broadcast T.V. channels in terms of the most powerful platforms to reach young audiences on in both the U.K. and the U.S.

Part of the game's popularity in the past year might be to do with the COVID pandemic, as the platform enables people to interact in a way they are not allowed to in the real world.

According to International Data Corporation analysis seen by MarketWatch, in 2020 global videogame revenue was predicted to surge to $179.7 billion.

This is more than the global entertainment market was worth in 2019 at $101 billion and much more than the global box office, valued at $42.2 billion, according to the Motion Picture Association.

Roblox presentation
David Baszucki, founder and CEO of Roblox, presents at the Roblox Developer Conference on August 10, 2019 in Burlingame, California. The game generated $924 million in revenue last year. Ian Tuttle/Getty