ROBLOX

David Baszucki co-founded Knowledge Revolution in 1989, which made physics simulation software for education. After selling it to MSC Software, he started working on what would become Roblox — the idea of a social platform where users could create and share interactive 3D experiences.

Roblox launched in 2006 and slowly grew through word-of-mouth among kids. By the mid-2010s, it had become the default gaming platform for children under 13.

COVID lockdowns in 2020 supercharged growth. Roblox went public via direct listing on the NYSE in March 2021 at a $45 billion valuation.

Roblox is not really a game — it is a platform where other people make games. Users create experiences using Roblox Studio, other users play them, and Roblox takes a cut of every virtual currency transaction.

The currency is called Robux. Over 70 million daily active users spend an average of 2.5 hours per day on the platform.

Roblox takes approximately 75% of every Robux transaction, paying developers only about 25%. Revenue topped $2.7 billion in 2023.

The catch: despite the massive revenue, Roblox has never turned an annual profit.

Roblox Platform (user-generated game creation and social platform), Roblox Studio (development tool), Robux (virtual currency), Roblox Cloud (developer services), Avatar Marketplace

Let the community build the product. Roblox does not make games — it makes the tools and platform, then lets millions of creators build experiences.

This means infinite content at near-zero marginal cost. Growth comes from the network effect: more creators attract more players, which attracts more creators.

Roblox also expanded into music events, brand partnerships (Nike, Gucci), and education.

Profitability. Roblox generates billions in revenue but spends heavily on infrastructure, developer payouts, trust and safety, and platform development.

The company has reported net losses every year since going public. There are also ongoing controversies about child safety — the platform's young user base has been targeted by scammers, predators, and exploitative game mechanics.

Roblox has invested heavily in moderation but critics argue it is not enough.

Andreessen Horowitz, Meritech Capital, Tiger Global, Altos Ventures, Temasek