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Business Insider
15-05-2025
- Business
- Business Insider
Roblox wants to become the new shopping mall for Gen Z
Roblox is known as a Gen Z destination for gaming and hanging out. Could it soon also be the place young people go to shop? That's Roblox's stretch goal, at least. Roblox on Thursday said it was expanding its commerce program, allowing more creators and brands to sell physical items — think hoodies, lipsticks, plushies, and concert tickets — without leaving the platform. The commerce push forms part of a broader companywide ambition for Roblox to make up 10% of the $180 billion global gaming market. To do so, it's diversified its revenue streams, generating income from subscriptions, the sale of virtual goods bought using its virtual currency Robux, and through advertising. "Everywhere there's digital goods being bought, we will look at ways in which there is an opportunity to actually buy physical goods," Louqman Parampath, VP of product for ads and commerce at Roblox, told Business Insider. Starting in the US, creators can integrate items from their Shopify catalogs into the virtual experiences on Roblox for users ages 13 and over (and 18-plus in Texas) to buy. The company said more commerce partners and locations are on the way — it previously partnered with Walmart on a trial to sell physical items, for example. Parampath told BI that over time, he envisions Roblox becoming more of a marketplace-style offering, and famous stores like the Nike store might appear across several popular Roblox experiences. "Our plan is to have much deeper product-catalog integrations, which means the variety and diversity of products that will be available across our experiences, and perhaps even a marketplace, will continue to grow," Parampath said. Roblox has been outlining its real-world commerce plans since at least 2023, and began testing last year. The company said the creator studio Twin Atlas generated "six-figure commerce revenue" in a few weeks after it began selling T-shirts and hoodies in Roblox games like "Creatures of Sonaria" and "Dragon Adventures." Fenty Beauty and Warner Bros. were also early testers of the commerce program. Twin Atlas said around 90% of its merch sales now come via Roblox versus its own website. Elsewhere, pop star The Weeknd is launching a ticket bundle within Roblox for his coming feature film "Hurry Up Tomorrow," which will be released in movie theaters later this week. James Poulter, head of AI and innovation at the marketing agency House 337, said Roblox will need to ensure the commercial expansion of its real-world shopping efforts doesn't disrupt gameplay and provide adequate controls to prevent its young users from overspending. "At worst, it risks becoming an Amazon-on-steroids scenario where children are immersed in a commercial environment that parents may not be comfortable with," Poulter said. Roblox said goods sold must adhere to its newly published commerce standards and other applicable policies, such as its community and advertising standards. Roblox sees commerce as a flywheel for its ad business Roblox is also bringing virtual goods to the real world. Through its Approved Merchandiser Program, brands can add a Roblox badge to their packaging and merchandise that contains a code which can be transferred for digital items users' Roblox avatars can wear and use. A Roblox spokesperson said that the company doesn't take a cut from sales of physical items bought through the Shopify integration but will earn a commission from any paired avatar item or developer product sold. Those fees can vary, determined by the total price and price ratio of both the physical and virtual item, exclusivity, and category of the item, the spokesperson said. Parampath said Roblox is also hoping these efforts can help prove the effectiveness of its advertising to marketers. "If you run a campaign for any particular product and that particular product is also purchased on our platform by a subset of our users, you can effectively close the loop," he said. Chris Camacho, CEO of the ad agency Cheil UK, said commerce on Roblox will be of particular interest to fashion, beauty, and lifestyle brands looking to reach younger audiences. Roblox said it had around 97.8 million daily active users as of its first quarter, 62% of whom were over 13. "For Gen Z and Gen Alpha, seeing an avatar in a hoodie, a lipstick or a pair of trainers and being able to buy the real thing on the spot just makes sense," Camacho said. "This is commerce on their terms: instant, contextual, and embedded into the experiences they already love."
Reuters
01-04-2025
- Business
- Reuters
Roblox announces new ad format, Google partnership to boost advertising business
April 1 (Reuters) - Roblox (RBLX.N), opens new tab on Tuesday launched a new format of video advertising on its gaming platform and announced a partnership with Google (GOOGL.O), opens new tab to help boost the growth of its nascent ad business. Gamers can choose to watch video advertisement, up to 30 seconds long, in exchange for boosts, lifelines or resources in a particular game through rewarded videos. In the coming weeks, brands and agencies will be able to purchase this new form of marketing either directly or through Google's ad platform, making Roblox's offerings more widely available to a larger set of advertisers. With Roblox's main videogame platform seeing strong engagement and monetization, the company has been looking to expand its overall business with advertising to take advantage of its large Gen Z user base. Roblox had 85.3 million Daily Active Users on its platform as of its quarter ended December 31, with the majority these users being above the age of 13. "Because gamers are so entrenched in the experience itself, traditional ad formats haven't always been the right choice for app publishers, because they don't want to pull their audiences out of those games," Scott Sheffer, vice president of sellside monetization at Google said in a roundtable briefing. Amid stiff competition in the gaming industry, the advertising business has allowed Roblox to diversify revenue streams and position itself as an attractive option for marketers in search of a large audience. Reuters reported last year the company hired former Roku (ROKU.O), opens new tab executive Louqman Parampath to aid its advertising business. Roblox has also partnered with data measurement firms such as Cint, DoubleVerify and Nielsen to help brands track the performance of their campaigns. Over the coming months, other ad formats such as billboards will come to Google Ad Manager, the company said.
