Roblox Is Not Aging Up

Roblox is not aging up

‍Two years ago, we posed the question, “Can Roblox Age Up?” The company, pressured by the public markets to expand customer lifetimes and revenues, rolled out features across digital identity, monetization, and safety to support an aging audience (Pro Game Guides). This week, we want to pose the following observation: we do not believe that Roblox is actually aging up (users are self-reporting fake ages), and despite this, Roblox will continue to grow and succeed as a UGC platform.

Roblox is growing: to be very clear on our firm’s view; Roblox has continued to be wildly successful in many ways, and we are bullish on the platform’s continued growth over the near-and-long term. Despite their already juggernaut status 2 years ago, with 211m monthly active users (MAUs) in Q2 2022, Roblox has continued to grow over the last 2 years. In 2024, Roblox has averaged 380m MAUs and 79.5m DAUs with 1 out of 5 users engaging with the platform daily. They are also improving monetization as 16.5m users pay monthly (+45% in 2 years). From the developer (creators) perspective, there are 2.5m developers who earned a combined $410m in the first six months of 2024 (Game World Observer).

However, this success in user growth has not translated well to the company’s finances. Despite increasing the number of monthly paying users by 45% over 2 years, the number of monthly active users has grown 80% over the same time period: conversion rate on a monthly basis has gone down. Revenues have only grown 6.2x compared to pre-pandemic levels while losses have increased 18x over the same time period; resulting in a continued lack of profitability. The company incurs an average of $138 in costs for every $100 in revenue (Matthew Ball).

User Trends Point to Age Misrepresentation

Any anonymous or pseudonymous platform from chat rooms to games to social media platforms will struggle to get true data about their users. There are two primary reasons for this:

1. A high percentage of children lie about their age: In a survey done by the Advertising Standards Authority, they found that 83% of children aged 11 to 15 register on social media sites with a false age.
2. Parents are playing with their kids, but are not truly reflective of the player base: A study by the Entertainment Software Association (ESA) revealed that ~67% of American parents play video games with their children at least once a week. In fact, in another study by Magid, 92% of parents whose children play video games also participate in gaming alongside them, primarily to spend quality family time and to monitor what their children are experiencing. This trend is only continuing to increase, which often results in many accounts having the reported age of the parents but all of the play time comes from their children (i.e. age misrepresentation for Roblox’s user data).

These combined trends have the potential to distort the true demographics of the Roblox player base, leading to an inaccurate and inflated age representation of the audience:

1. Children are likely overstating their age on the platform, which inflates Roblox’s age data.
2. Parents on the platform are, for the most part, only there to support and engage with their children. Though parents are real users, they are secondary to the primary user and have very different characteristics and value for the platform.

Roblox Onboarding Lacks Age Verification

Roblox’s onboarding process is not only easy to sidestep, but it disincentivizes users from providing their real age. Below you can see the simplicity of the sign up process.

A user can enter any birthdate during the onboarding process. Age verification through accepted forms of identification is only required to access Spatial Voice (voice chat within games), some community features (content creation opportunities, curated recommendations, increased interaction with a similar age group, and potentially in the future less restrictive chat filters), and content that is locked as 17+ (discretionary by the developer/creator). However, there is extremely limited (<0.1%) 17+ content.

With the current gaps in the onboarding process, any user can easily claim they are 25, bypassing age verification altogether. While this child could not access the 17+ rated content and the features we listed above, there is very little material difference to their experience on Roblox.

Ecosystem Trends

While Roblox is available across Mobile, PC, and Consoles, 80% of sessions happen on mobile devices, 18% on desktop, and 2% on consoles (Roblox 2023 Report). There has been no significant change in this mix since 2022.

If Roblox was successfully aging up the platform, we would expect to see a shift in platform distribution toward console and desktop, yet that has not occurred. Children generally begin playing video games on mobile devices (phones and tablets). As they age into teenagers and adults, they tend to graduate to consoles and/or PCs. That is not to say only children play on mobile; children do not stop playing mobile games as they age, but they do diversify the platforms they play on. Today, 73% of teens report playing video games on a gaming console (e.g., PlayStation, Switch or Xbox) while 49% of teens say they play video games on a desktop or laptop computer (Pew Research).

Roblox claims that 42% of their users are 17+ but only 20% of user sessions are outside of mobile. Assuming Roblox is not an unique outlier in terms of adult gaming platform usage, there are two possible conclusions: either older demographics do not play Roblox as much (fewer user sessions per account versus younger users) or there is a significant portion of users misstating their age. Both would conclude that the platform is not actually aging up.

Branded Experiences for Younger Audiences are More Successful

Roblox has seen an influx in interest from brands looking to market to their audience. While we acknowledge that any experience needs to be fun first (with the priority of IP coming second), we believe that looking at the success of individual branded experiences is reflective of the age demographic on the platform. Experiences with brands that are recognizable and relatable to younger audiences generally perform better than those for older audiences.

What does this mean?

While counter to the existing market narrative, we do not believe Roblox has successfully “aged up” the platform. That said, we do not believe that Roblox needs to age up in order to be successful. But the two groups that must see through the misrepresented data are brands and developers.

Roblox is not the right platform for brands to reach older demographics. On the other hand, it is the perfect platform for brands to engage with younger demographics, who are generally harder to reach.

We believe there will be limited success for developers that build 17+ experiences at this time (there will be outliers, particularly in the anime genre). While this older demographic has a higher propensity to spend, we believe that developers will broadly struggle to attract 17+ users to their experiences.

Takeaway: Roblox is not misreporting data; rather, users are misrepresenting their ages. Device behavior suggests that a younger audience is the predominant age group on Roblox today. This is also supported by the success of brand experiences that target younger demographics. Societal trends also suggest that while some older users are present on the platform, many of them are parents playing alongside their children, and they are generally less engaged.

In conclusion, we do not believe that Roblox's audience is actually aging up, but that should not be alarming or a concern. The platform is poised to continue growing in users, engagement, and revenue over the coming years. We remain highly optimistic and excited about Roblox, its creator ecosystem, and the economic value it is generating for the gaming industry.