A gaming and entertainment platform that has mostly been targeted at kids has built a user base of over 50 million. Advertisers are being asked to join the party.
As part of its annual developer conference on Friday, Roblox is announcing plans to debut ads next year, marking the company's first significant effort to broaden its business beyond games. By the end of the year, it will be testing ads with developers and brands.
Warner Bros. and Vans are two brands that the company has tried out online ads with. He said that the ads were displayed in a format that was referred to as a portal. The company's core business is Robux, a virtual currency that allows players to spend real money on items in games.
We will continue to invest in the economy. He said the company's push into online ads was a good strategic bet.
The market cap of Roblox soared past $80 billion in November as investors poured into high-growth tech stocks. The economic downturn has hurt those businesses, with Roblox losing more than half of its value.
Roblox reported second-quarter financials that missed on both the top and bottom lines, and revenue growth slowed to 30% from more than 100% a year earlier. All of the company's revenue comes from the sale of Robux.
David Baszucki, the CEO of Roblox, told CNBC in February that the company has many opportunities to increase monetization. Baszucki said that the company has focused on creating a safe and civil platform.
There is not yet a standard format for how the ads will look. Future ads in the metaverse could look a lot like digital billboards that people can use to buy things like shoes, or even branded coffee cups.
Users can be automatically transported to the company's virtual Roblox community when interacting with the brand. Companies are trying to figure out how ads can work in metaverses.
They were interested in the results of Warner Bros.' recent test.
During a time of turmoil in the market, Roblox is jumping into online ads. Apple's privacy changes in the mobile operating system have hurt Meta's business. A number of companies have pulled back on ad spending due to the economic downturn, and TikTok has added a new avenue to the mix.
Companies that rely on those platforms are spending more money to get in front of consumers as Amazon and Apple bolster their ad businesses.
Roblox will have to prove it's worth before brands will open their wallet. Businesses can use their metaverse ads to connect with the real world. A branded digital item could be used as a coupon to go buy something at a store.
The app that Roblox serves ads on is mostly used by children. Children under the age of 13 won't be able to interact with the ads because they will be labeled asimmersive. More guidelines will be added by the company to let parents and children know which virtual experiences are appropriate for their age group.
A tool to help users discover virtual worlds and experiences that may be of interest to them is one of the new features that Roblox is introducing.
The daily active user count increased by 21% in the second quarter.
Metaverse is facing hardware challenges for the future of virtual reality.
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