Insights Youth Insights: How Open Innovation is Powering Growth for Roblox

9-Year-Old T. lives in a house he’s very proud of, that he paid for with his own money. He drives to school in a car he’s purchased for himself, and never skips class, because attending virtual school is a big part of the Roblox experience.

With over 150 million active users, gaming platform Roblox is the most-used app for kids under 13. Stranger Things star Noah Schnapp is a fan. As are millions more across the US, Europe, Asia Pacific and the Middle East (until a hotly contested ban in the UAE). Much more like an app-store than a game, the tween-centric platform saw a massive surge in users as shelter-in-place regulations were announced. It surged past Minecraft in 2020, and is aiming for a ~US$1 Billion Dollar IPO in 2021.  

Adopt Me has over 3 billion plays on Roblox, and lets kids care for virtual pets

The Roblox Effect: #1 online entertainment platform for <18s 

  • Users: 150 million monthly active users in 200 countries (2020)
  • 75% of US kids between 9 and 12 use Roblox
  • Over 50% of its daily users are <13

Made by tweens for tweens

A great proportion of Roblox content is made by the kids themselves —  they earn a quarter of the revenue from sales of their creations on the platform. Game creators are set to bank more than US $250 million in 2020, and have even paid for their college tuition with their Roblox earnings.

“We did a lot of work at the beginning of COVID to make sure it was super simple for kids to make games. They can totally do this by themselves.”

— Craig Donato, Chief Business Officer, Roblox

Because Roblox doesn’t build the games that run on its platform, it leaves the doors wide open for developers of all ages to design their own games. Its most popular games are free, monetising as players spend in-game, using virtual cash called Robux. In the first nine months of 2020, Roblox users spent a collective $1.2 billion on in-game currency, up 171% from 2019, and players have created a whopping 50 million games on the platform. 

Lockdown Co-creation: Nike + Roblox for Air Max Day in 2020

Key takeaway 1: Empower customers, and co-create for genuine innovation

2. Open source, open everything

Roblox makes it easy to discover and create new games, which means even small brands with tiny budgets (local grocers, for instance) are building audiences via new games.

At the moment advertising on Roblox is basic — a mix of banner ads and in-game wardrobe partnerships. But brand and retailer participation on the platform is growing. Nike launched virtual Air Max sneakers on Roblox in 2019. The film “Scoob!” partnered with the Roblox game “Adopt Me!” to offer a virtual Scooby-Doo in the game, Wonder Woman has its own Roblox game. Lil Nas X and Ava Max hosted live performances on the platform.

“Whether it’s for a sports franchise, a fashion brand, a movie studio or musical artist, there are endless possibilities for building authentic and immersive experiences that bring your brand to life.”

— Tami Bhaumik, Vice President of Marketing, Roblox 

Brick and mortar companies like chain supermarkets are designing Roblox games to offer kids healthy eating tips. Unlike branded Xbox or Wii, Roblox games are easy to build with minimal coding skills. The barriers to entry are almost non-existent, and innovation entirely possible even on a shoestring budget. Marketers for the Master Moley game spent just $190 on one banner ad to generate 11k plays. Like the games themselves, appealing to tomorrow’s consumers isn’t always about big budgets and sophisticated design, the kids are looking for a place to be social, and to have fun.

Key takeaway 2: Low budget, low-fi is cool too

3. Unstructured play, and shared experiences

What makes Roblox so interesting is that as a company they don’t do a lot of marketing. The usual way kids discover the platform is when friends invite them to play. Or they discover Roblox gameplay videos on YouTube. So far, much of the company’s growth has been entirely organic. Roblox chief business officer Craig Donato attributes this popularity to the platform’s emphasis on “unstructured play”. With the pandemic raging, more children are confined to their homes, more so than any previous generation.

“It never feels like a job, which of course is the best part. I enjoy building and do so in my free time, and I’m simply rewarded when it comes to doing what I love.”

— Abbie Leigh, Game Creator 

Schools are designing Roblox games to engage with kids

Take Abbie Leigh, who started playing Roblox in 2011. Abbie began creating assets for games in 2017. She’s currently working on three games, including her own sports-themed title, and hopes to make a career as a game developer.  Many Roblox games are designed towards creating social experiences with friends, or acquiring new skills. And in many, the goal isn’t winning.

Key takeaway 3: Aim for customer outcomes, not just business outcomes

4. Get the parents on board

The tween market, in particular, comes with its own challenges. This is around the time that kids begin to exert more control over what their parents choose for them. More than in younger age groups, tween products need to appeal to two customers at the same time: kids and their parents. Roblox has its share of hurdles: ensuring the safety of children, and eliminating potentially harmful scenarios to reassure parents that the platform is actually a safe space for kids to hang out.

What parents and educationists are quickly discovering is that, like Minecraft, Roblox is great for remote learning. Roblox’s enormous popularity among tweens means that teachers are turning to it to engage with kids. Schools are creating classrooms, and games on the platform to connect with their students through the pandemic.

Key takeaway 4: Designed by kids, approved by parents 

What’s Ahead: Bringing the World Together Through Play

Chase First Banking: The fintech app targets both millennial parents and their Gen Z kids

Platforms like Roblox cash in on Generation Z and Generation Alpha preferences for collaboration, creativity and transparency. 

In 2020 Chase announced the launch of Chase First Banking, a checking account designed specifically to help parents teach kids and teens money management skills. Chase collaborated with fintech platform Greenlight to create the kid-focused checking service via the Chase Mobile app with a mission of helping parents teach their children financial literacy. The app lets parents manage kids’ allowances, keep track of chores and teach financial skills from within the Chase Mobile app. 

Assigning chores and paying allowances via the Chase First app

The brands that win let consumers proactively choose, curate and create products, services and experiences based on their own preferences for platforms, delivery and fulfilment. They get consumers involved, so experiences and outcomes are exactly what end-users want. These platforms anticipate what consumers need with predictive and personalised AI. The consumer experiences of the future are designed to be rewarding — and fun. Let the games begin.