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Epic Games to shut down Houseparty in October, including the video chat ‘Fortnite Mode’ feature
Houseparty, the social video chat app acquired by Fortnite maker Epic Games for a reported $35 million back in 2019, is shutting down. The company says Houseparty will be discontinued in October when the app will stop functioning for its existing users; it will be pulled from the app stores today, however. Related to this move, Epic Games’ “Fortnite Mode” feature, which leveraged Houseparty to bring video chat to Fortnite gamers, will also be discontinued.
Founded in 2015, Houseparty offered a way for users to participate in group video chats with friends and even play games, like Uno, trivia, Heads Up and others. Last year, Epic Games integrated Houseparty with Fortnite, initially to allow gamers to see live feeds from friends while gaming, then later adding support to livestream gameplay directly into Houseparty. At the time, these integrations appeared to be the end goal that explained why Epic Games had bought the social startup in the first place.
Now, just over two years after the acquisition was announced, and less than half a year since support for livestreaming was added to the app, Houseparty is shutting down.
The company didn’t offer any solid insight into what, at first glance, feels like an admission of failure to capitalize on its acquisition. But the reality is that Epic Games may have something larger in store beyond just video chat. That said, all Epic Games would say today is that the Houseparty team could no longer give the app the attention it required — a statement that indicates an executive decision to shift the team’s focus to other matters.
While none of the Houseparty team members are being let go as a result of this move, we’re told, they will be joining other teams where they will work on new ways to allow for “social interactions” across the Epic Games family of products. The company’s announcement hinted that those social features would be designed and built at the “metaverse scale.”
The “metaverse” is an increasingly used buzzword that references a shared virtual environment, like those provided by large-scale online gaming platforms such as Fortnite, Roblox and others. Facebook, too, claims the metaverse is the next big gambit for social networking, with CEO Mark Zuckerberg having described it as an “embodied internet that you’re inside of rather than just looking at.”
To some extent, Fortnite has begun to embrace the metaverse by offering non-gaming experiences like online concerts you attend as your avatar, and other live events. Ahead of its shutdown, Houseparty also toyed with live events that users would co-watch and participate in alongside their friends.
An Epic Games spokesperson tells TechCrunch the Houseparty team has worked on (and continues to work on) a number of other projects that focus on social. But some of the “multiple, larger projects” Epic Games has in the works remain undisclosed, we’re told.
In terms of social products, Houseparty’s technology now underpins all of Fortnite voice chat and the features they built are widely available for free to developers through Epic Games Services. They also worked on building out new social experiences, which have ranged from the social RSVP functions for Fortnite’s global events, like the recent Ariana Grande concert, to the upcoming “Operation: Sky Fire” event for collaborating quests and other game mechanics. More social functionality and new experiences are also being built into Fortnite’s user-generated content platform, Create Mode.
While it may seem odd to close an app that only last year experienced a boost in usage due to the pandemic, it appears the COVID bump didn’t have staying power.
At the height of lockdowns, Houseparty had reported it had gained 50 million new sign-ups in a month’s time as users looked to video apps to connect with family and friends while the world was shut down. But as the pandemic wore on, other video chat experiences gained more ground. Zoom, which had established itself as an essential tool for remote work, became a tool for hanging out with friends after-hours, as well. Facebook also started to eat Houseparty’s lunch with its debut of drop-in video chat “Rooms” last year, which offered a similar group video experience. And bored users shifted to audio-based social networking on apps like Clubhouse or Twitter Spaces.
Image Credits: Apptopia
According to data from Apptopia, Houseparty has been continually declining since the pandemic bump. To date, its app has seen a total of 111 million downloads across iOS and Android, with the majority (63 million) on iOS. The U.S. was Houseparty’s largest market, accounting for 43.4% of downloads, followed by the U.K. (9.8%), then Germany (5.6%).
Epic Games, meanwhile, said the app served “tens of millions” of users worldwide. It insists the closure wasn’t decided lightly, nor was the decision to shutter “Fortnite Mode” made due to lack of adoption.
Houseparty will alert users to the shutdown via in-app notifications ahead of its final closure in October. At that point, Fortnite Mode will also no longer be available.
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Infinite Canvas raises $2.8M for a metaverse creator group modeled after esports teams
With the promise of an interconnected virtual world coming into focus and user-crafted gaming content exploding, Infinite Canvas is looking to apply to the metaverse lessons learned in the esports boom.
“Metaverse” is the hot buzzword right now, but it’s not an empty term. Ten different people would probably define the metaverse in 10 different ways, but it’s generally used as shorthand for the web of emerging virtual spaces full of personalized avatars, games and digital goods that are already shaping our world.
Much like the realm of esports boasts individual standout players who command their own followings, the social gaming world has its own stars who make original in-game content. But right now, creators making hit content in Fortnite, Roblox and Minecraft are mostly operating on their own, without the supportive infrastructure that quickly professionalized the esports world. And like the early waves of esports players, those content creators skew young and lack some of the resources that would make it smoother to scale the digital brands they’re building.
Founded by Tal Shachar and Sebastian Park, Infinite Canvas is looking to connect creators who craft content for the world’s most popular online games with the financial resources, tools and experience they need to grow their businesses beyond what would be possible in isolation.
Shachar, the former growth strategist at BuzzFeed Studios and chief digital officer at Immortals Gaming Club, and Park, previously VP of Esports for the Houston Rockets, where he founded League of Legends franchise team Clutch Gaming, envision a hybrid talent management company and game publisher modeled after the success they’ve seen in the esports world. The pair liken the new venture to “an esports team for the metaverse.”
To grow their vision, Infinite Canvas has raised $2.8 million in pre-seed funds led by Lightshed Venture Partners, the venture firm founded by media analyst Richard Greenfield. BITKRAFT Ventures, Day One Ventures, Crossbeam and Emerson Collective also participated in the funding round.
“We are just at the beginning of seeing what the metaverse market opportunity can be,” said Greenfield. “While the path to monetization is clear on platforms like YouTube, in virtual worlds Infinite Canvas is pioneering a network that will unite creators, players and content partners to enhance the earning power of the talent building new virtual empires.”
Out of the gate, Infinite Canvas has partnered with some big names in Roblox, including RussoPlays, DeeterPlays, Sabrina and DJ Monopoli from Terabrite Games, as well as a handful of other Roblox developers, Fortnite map makers and streamers who, combined, reach more than 4.5 million subscribers.
For the team, this nascent era of user-generated gaming content looks a lot like another now-ubiquitous creator platform once did.
“Roblox in particular, but really all of these UGC gaming platforms, really reminded me a lot of YouTube. Which is to say that they were enabling a new type of person to distribute a content format that was previously kind of locked right behind like barriers of distribution and also of skills set and capital, quite frankly,” Shachar told TechCrunch.
After getting curious, Shachar and Park dove into the creator community and found a diverse array of generally self-taught young people from all around the world crafting custom in-game content for Fortnite, Roblox and Minecraft. Much of that content, whether intentionally or not, offered players more digital spaces to connect during the pandemic-imposed social isolation, which saw interest in online social spaces take off.
“Everyone was pretty negative about the world writ large and we’re just talking to these like 17, 16, 18, 19-year-old guys, gals and non-binary pals from all over the world, just like straight up making cool stuff,” Park said.
In those conversations, Park and Shachar realized that while the world of user-generated gaming content can produce huge hits, creators were mostly isolated from support that could help them take their work to the next level.
“It felt very siloed — you have people making content over here on the right and then people developing these games on the left and then players kind of in the center there and that didn’t really make a ton of sense to us,” Shachar said. “Especially because it was super clear that there was this really strong loop of content creation leading to gameplay leading to content creation.”
With Infinite Canvas, they want to provide that missing framework, offering creators crafting content in virtual worlds everything from marketing support to capital and tech tools. As creator monetization channels within virtual worlds mature, Infinite Canvas hopes to even be able to broker ad and brand opportunities and empower creators to expand their own brands across platforms.
“What if we built a new kind of organization that blended parts of being a game publisher, parts of being an esports team, parts of being a capital and tech backend to basically enable these people to do what they do but better and bigger?” Shachar asked.
“For the metaverse — whatever word you want to use — to really exist, it’s going to take all of these independent people to actually populate it and bring it to life and make all of these experiences and there’s just an insane amount of talent out there that we think can be unlocked.”
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Roblox acquires Discord competitor Guilded
Roblox is using M&A to bulk up its social infrastructure, announcing Monday morning that they had acquired the team at Guilded that has been building a chat platform for competitive gamers.
The service competes with gaming chat giant Discord, with the team’s founders telling TechCrunch in the past that as Discord’s ambitions had grown beyond the gaming world, its core product was meeting fewer competitive gaming needs. Like Discord, users can have text and voice conversations on the Guilded platform, but Guilded also allowed users to organize communities around events and calendars, with plenty of specific functionality designed around ensuring that tournaments happened seamlessly.
The startup’s product supported hundreds of games, with specific functionality for a handful of titles, including League of Legends, Fortnite, CS: GO and, yes, Roblox. Earlier this year, the company launched a bot API designed to help nontechnical users build bots that could enrich their gaming communities.
Guilded had raised $10.2 million in venture capital funding to date according to Crunchbase, including a $7 million Series A led by Matrix Partners early last year. The company launched out of Y Combinator in mid-2017.
Terms of the Roblox deal weren’t disclosed. In an announcement post, Roblox detailed that the Guilded team will operate as an independent product group going forward. In a separate blog post, Guilded CEO Eli Brown wrote that existing stakeholders will be able to continue using the product as they have previously.
“Everyone – including communities, partners, and bot developers – will be able to keep using Guilded the same way you are now,” Brown wrote. “Roblox believes in our team and in our mission, and we’re going to continue to operate as an independent product in order to achieve it.”
Roblox has seen profound success and heightened investor attention in recent years as the pandemic has pushed more gamers online and brought more users into the fold, but that success has drawn the attention of competitors. In June, Facebook acquired a small Roblox competitor called Crayta, with CEO Mark Zuckerberg announcing just weeks ago that he planned to transform Facebook into a “metaverse” company, using a term many have come to associate closely with what Roblox has been building. Guilded represents an opportunity for Roblox to bring its user base deeper inside its own suite of products, creating a social infrastructure that keeps users engaged.
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Facebook buys studio behind Roblox-like Crayta gaming platform
Facebook has been making plenty of one-off virtual reality studio acquisitions lately, but today the company announced that they’re buying something with wider ambitions — a Roblox-like game creation platform.
Facebook shared that they’re buying Unit 2 Games, which builds a platform called Crayta. Like some other platforms out there, it builds on top of the Unreal Engine and gives users a more simple creation interface teamed with discovery and community features. Crayta has cornered its own niche pushing monetization paths like Battle Pass seasons, giving the platform a more Fortnite-like vibe as well.
Unit 2 has been around for just over three years, and Crayta launched just last July. Its audience has likely been limited by the studio’s deal to exclusively launch on Google’s cloud-streaming platform Stadia, though it’s also available on the Epic Games Store as of March.
The title feels designed for the lightweight nature of cloud-gaming platforms, with users able to share access to games just by linking other users, and Facebook seems keen to use Crayta to push forward their own efforts in the gaming sphere.
“Crayta has maximized current cloud-streaming technology to make game creation more accessible and easy to use. We plan to integrate Crayta’s creation toolset into Facebook Gaming’s cloud platform to instantly deliver new experiences on Facebook,” Facebook Gaming VP Vivek Sharma wrote in an announcement post.
The entire team will be coming on as part of the acquisition, though financial terms of the deal weren’t shared.
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Gucci brings digital items and experiences to Roblox in new partnership
As gaming platforms capitalize on pandemic-fueled traffic to their digital worlds, brands that drive culture in the physical world are fighting to ensure they don’t miss any new opportunities. A new partnership between Roblox and Gucci brings digital items from the fashion house into the platform’s metaverse alongside a new limited-run digital experience.
Gucci’s new experience teams a set of virtual spaces with a set of digital branded items in an effort to immerse Roblox users inside a world that feels unique to the Gucci brand and Roblox platform. The new space, called Gucci Garden, debuts today for a two-week run on the Roblox platform.
The environment takes advantage of recent advances in the game engine powering Roblox, bringing users a high-dynamic set of environments that they can traverse as blank mannequins, which evolve visually as users move through different spaces. Different rooms in the experience draw influence from different Gucci campaigns of the past several years. The digital event’s rollout accompanies a real-world multimedia event in Florence, Gucci Garden Archetypes.
The rollout follows an early pilot with creator Rook Vanguard in releasing Gucci-branded digital items to the platform this past December.
Image Credits: Roblox
In an interview with TechCrunch, Gucci CMO Robert Triefus details how the luxury fashion brand has been redefining its approachability as it extends its reach to digital platforms like Roblox — which the company sees as an opportunity that’s growing too quickly to ignore.
“Hats off to Roblox, scale came quickly,” Triefus tells TechCrunch. “Gucci is scale, though it’s taken us 100 years, and it took Roblox about 100 days.”
For high-fashion brands, the digital sphere has presented plenty of challenges when it comes to preserving exclusivity on a medium that begs for mass adoption. Triefus says Gucci has aimed to lean into the access offered by digital platforms as a way of promoting a more inclusive brand.
“There’s so much talk today about the metaverse,” Triefus says. “In the last six years, [Creative Director Alessandro Michele] has created a Gucci Metaverse but it’s not necessarily a digital manifestation, it’s a narrative.”
Luxury and authenticity have been some of the central sells of blockchain-based NFTs, something Triefus still sees opportunities for down the road. “It’s astonishing to me how fast the conversation around NFTs has exploded,” Triefus says. “We’ve been studying blockchain for a long time as you might imagine, authenticity of product and of experience is extremely important.”
In addition to experiments with Roblox, late last year Gucci partnered with startup Genies to outfit user avatars.
Virtual items from real-world retailers have been relatively slow to pop up inside digital worlds, though as user perceptions of paying for digital goods have shifted, platforms are moving to capitalize.
“We don’t partner with very many brands,” Roblox exec Christina Wootton tells TechCrunch. “One thing that was very special when we started speaking with Gucci is that they took the time to understand our platform and what works well for designers and creators in our community.”
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Manticore Games raises $100 million to build a ‘creator multiverse’
The gaming sector has never been hotter or had higher expectations from investors who are dumping billions into upstarts that can adjust to shifting tides faster that the existing giants will.
Bay Area-based Manticore Games is one of the second-layer gaming platforms looking to build on the market’s momentum. The startup tells TechCrunch they’ve closed a $100 million Series C funding round, bringing their total funding to $160 million. The round was led by XN, with participation from SoftBank and LVP alongside existing investors Benchmark, Bitkraft, Correlation Ventures and Epic Games.
When Manticore closed its Series B back in September 2019, VCs were starting to take Roblox and the gaming sector more seriously, but it took the pandemic hitting to really expand their expectations for the market. “Gaming is now a bona fide super category,” CEO Frederic Descamps tells TechCrunch.
Manticore’s Core gaming platform is quite similar to Roblox conceptually, the big difference is that the gaming company is aiming to quickly scale up a games and creator platform geared toward the 13+ crowd that may have already left Roblox behind. The challenge will be coaxing that demographic faster than Roblox can expand its own ambitions, and doing so while other venture-backed gaming startups like Rec Room, which recently raised at a $1.2 billion valuation, race for the same prize.
Like other players, Manticore is attempting to build a game discovery platform directly into a game engine. They haven’t built the engine tech from scratch; they’ve been working closely with Epic Games, which makes the Unreal Engine and made a $15 million investment in the company last year.
A big focus of the Core platform is giving creators a true drag-and-drop platform for game creation with a specific focus on “remixing,” allowing users to pick pre-made environments, drop pre-rendered 3D assets into them, choose a game mode and publish it to the web. For creators looking to inject new mechanics or assets into a title, there will be some technical know-how necessary, but Manticore’s team hopes that making the barriers of entry low for new creators means that they can grow alongside the platform. Manticore’s big bet is on the flexibility of their engine, hoping that creators will come on board for the chance to engineer their own mechanics or create their own path toward monetization, something established app stores wouldn’t allow them to.
“Creators can implement their own styles of [in-app purchases] and what we’re really hoping for here is that maybe the next battle pass equivalent innovation will come out of this,” co-founder Jordan Maynard tells us.
This all comes at an added cost; developers earn 50% of revenues from their games, leaving more potential revenue locked up in fees routed to the platforms that Manticore depends on than if they built for the App Store directly, but this revenue split is still much friendlier to creators than what they can earn on platforms like Roblox.
Building cross-platform secondary gaming platforms is host to plenty of its own challenges. The platforms involved not only have to deal with stacking revenue share fees on non-PC platforms, but some hardware platforms that are reticent to allow them all, an area where Sony has been a particular stickler with PlayStation. The long-term success of these platforms may ultimately rely on greater independence, something that seems hard to imagine happening on consoles and mobile ecosystems.
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5 mistakes creators make building new games on Roblox
With Roblox’s massive IPO this month, game developers, brands and investors alike are wondering what factors cause the most successful games on this $47 billion platform to break out from the millions of user-generated passion projects.
According to Roblox’s S-1 filing, nearly 250 developers and creators earned $100,000 or more in Robux in the year through September 2020 out of nearly 1 million creators on the platform.
From Gamefam’s first game two years ago that topped out at only 25 concurrent players to our current portfolio with 2 million to 3 million daily visits, our team learned to develop on Roblox the hard way — by trial and error and by getting better at listening to the Roblox community’s unique gamer culture and vernacular.
Even the most experienced and talented game designers from the mobile F2P business usually fail to understand what features matter to Robloxians.
For those entrepreneurs just starting their journey in Roblox game development, these are the most common mistakes I have seen gaming professionals (myself included) make on Roblox:
1. Using the established free-to-play (F2P) mobile game mechanics
In the F2P mobile games market, it’s all about layered game loops: play a match with the hero, level the hero up using resources from the match, buy more heroes to merge with the first hero, open up new matches with new rules to win more resources, and on and on. These require ongoing player tutorials across hours of play sessions. These mechanics tend to backfire on Roblox because players have no tolerance for anything but immediate, visceral fun.
Accordingly, in mobile F2P, a robust tutorial for new users is oftentimes one of the biggest investments during development. But in our Roblox game Speed Run Simulator (more than 400,000 daily visits), we saw a significant increase in D1 retention when we removed the tutorial entirely and just allowed existing players to guide new players’ understanding of the game. The differences between Roblox and mobile F2P are not only numerous but also sometimes profoundly counterintuitive.
2. Optimizing to make money off of “whales”
Roblox players spend because they’re getting something they want. They won’t be cajoled or coerced into spending like in a mobile game where progress is restricted or slowed without making an in-app purchase (think Candy Crush).
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How Roblox’s creator accelerator helps the gaming giant build new platform opportunities
As Roblox eyes what could be a historic debut on public markets in the coming months, investors who have valued the company at $29.5 billion are certainly eyeing the gaming company’s dedicated and youthful user base — but it’s the 7 million active creators and developers on the Roblox platform that they are likely most impressed by.
Since 2015, Roblox has been running an accelerator program focused on enabling the next generation of game developers to be successful on its platform. Over the years, the program has expanded from one annual class to now three, each with around 40 developers participating. That means more than 100 developers per year are working directly with Roblox to gain mentorship, education and funding opportunities to get their games off the ground.
As the company’s efforts on this front have grown more formalized, Roblox in 2018 hired former Accelerator alumni Christian Hunter, a Roblox gamer since age 10 and game developer since 13, to run the program full time. Having been through the experience himself, Hunter brought to the program an understanding of how the Accelerator could improve, based on a developer’s own perspective.
However, the COVID-19 pandemic threw into disarray the company’s plans to run the program. Instead of being able to invite developers to spend three months participating in classes hosted at Roblox’s San Mateo office, the company had to revamp the program for remote participation.
As it turned out, developers who were used to playing and building games taking place in virtual worlds quickly adjusted to the new online experience.
“Before COVID, everyone was together. It was easier to talk to people. [Developers] could just walk up to someone that was on our product or engineering team if they were running into issues,” explains Roblox Senior Product Manager Rebecca Crose. “But obviously, with COVID-19, we had to switch and think differently.”
The remote program, though differently structured, offered several benefits. Developers could join the program’s Discord server to talk to both current participants and previous classes, and reach out and ask questions. They could also participate in the Roblox company Slack to ask the team questions, and there were more playtests being scheduled to gain reactions and feedback from Roblox employees.
Meanwhile, to get to know one another when they couldn’t meet in person, developers would have game nights where they’d play each other’s games or others that were popular on Roblox, and bond within the virtual environment instead of in face-to-face meetings and classes.
The actual Accelerator content, however, remained fairly consistent during the remote experience. Participants had weekly standups, talks on topics like game design and production, and weekly feedback sessions where they asked Roblox engineers questions.
But by its nature, a remote Accelerator broadened who could attend. Instead of limiting the program to only those who could travel to San Mateo and stay for three months, the program was opened up to a more global and diverse audience. This drove increased demand, too.
The 2020 program saw Roblox receiving the largest number of applications ever — five times the usual number.
As a result, the class included participants from five countries: The Philippines, South Korea, Sweden, Canada and the U.S.
The developers at IndieBox Studios saw the program as a chance to double down on their game development side hustles. The young friends spread across the U.K. and Kentucky spent their time during the accelerator scaling up their photorealistic title called Tank Warfare.
“We’ve actually never once met in real life, like, we’ve been friends for going on, what, nine years now,” Michael Southern tells TechCrunch. “We met on Roblox.”
IndieBox is representative of many of Roblox’s early developer teams — younger gamers that have spent more than a decade learning the ins and outs of the evolving Roblox gaming platform.
“We all joined Roblox way back in 2008,” IndieBox’s Frank Garrison says. “But we only started developing on the platform in 2019. And for us, the decision to choose Roblox was more down to like, well it’s what we know, why not give it a bash?”
The demographics of the accelerator have been shifting in other ways as the developer base grows more diverse.
“I would say, in the beginning, it was mostly young males. But as we’ve watched the program evolve, we’ve been getting so many new interesting teams,” notes Program Manager Christian Hunter.
The 2020 program had more women participants than ever, for example, with 12 in a class of 50. And one team was all women.
The age of participants, who are typically in the 18 to 22-year-old range, also evolved.
“We’ve seen a lot more older folks,” Hunter says. “With [the COVID-19 pandemic], we actually saw our first 50-year-old in the program. We’ve never had anyone older than, I’d say, 24. And in 2020, we had 12 individuals over the age of 30,” he notes.
Two of the teams were also a combination of a kid and a parent.
Shannon Clemens learned about the Roblox platform from her son Nathan, learning to code and bringing her husband Jeff in to form a studio called Simple Games. Nathan’s two sisters help the studio part time, as well as his friend Adrian Holgate.
“Seeing [my son’s] experience on Roblox getting involved with the platform, I thought it would be neat to learn how to make our own games,” Shannon Clemens told TechCrunch.
Their title Gods of Glory has received more than 13.5 million visits from Roblox players since launching in September.
“Our whole family is kind of creatively bent towards having fun with games and coming up with things like that,” Jeff Clemens tells us. “Why would we not try this? So, that’s when we applied to the program and said, ‘well, we’ll try and see if we get accepted,’ and we did and it’s been awesome.”
In addition to the changes facilitated by a remote environment, Roblox notes there were other perks enabled by remote learning. For one thing, the developers didn’t have to wake up so early to benefit from the experience.
“With it being remote, the developers were working their hours,” says Crose. “As a developer, we tend to work later and stay up at night. Having them come in at 9 AM sharp was very difficult. It was hard for them because they’re just like…a zombie. So we definitely saw that by letting them work their own hours, [there is] less burnout and they increase their productivity,” she says.
Though the COVID-19 crisis may eventually end as the world gets vaccinated, the learnings from the Accelerator and the remote advantages it offers will continue. Developers from the program hope that the growth seen on gaming platforms like Roblox continues as well.
“The pandemic has been great for most game studios,” developer Gustav Linde tells TechCrunch. “Obviously, it’s a very weird time, but the timing was good for us.”
The Gang Stockholm, a Swedish game development studio co-founded by Linde, has been building experiences — largely branded ones for clients, exclusively on the Roblox platform. The team of 12 has used the accelerator to slow down development deadlines and dig into some unique areas of the platform as well as focus wholly on their upcoming title, Bloxymon, which they plan to release this year.
“If you look at Steam and the App Store and Google Play, those markets are extremely crowded, and Roblox is a very exciting platform for developers right now,” said Linde. “Roblox is also getting a lot of attention and a lot of big brands are interested in entering the platform.”
Roblox says that going forward, future Accelerator programs will feature a remote element inspired by the COVID experience. The company plans to continue to make its program globally available, with the limitation for now, of English-speaking participants. But it’s looking to expand to reach non-English speakers with future programs.
The fall 2020 Accelerator class graduated in December 2020, and the next spring class will start in February 2021. Roblox says they are already in the process of recruiting for their summer 2021 class, which will again have some 40 participants. Roblox will again aim to continue diversifying the group of creators.
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Roblox raises at $29.5 billion valuation, readies for direct listing
Roblox is now one of the world’s most valuable private companies in the world after a monster Series H raise brings the social gaming platform a stratospheric $29.5 billion valuation. The company won’t be private for long, though.
The $520 million raise led by Altimeter Capital and Dragoneer Investment Group is a significant cash influx for Roblox, which had previously raised just over $335 million from investors according to Crunchbase. The Investment Group of Santa Barbara, Warner Music Group, and a number of current investors, also participated in this round.
In February of 2020, the company closed a $150 million Series G led by Andreessen Horowitz which valued the company at $4 billion.
The gaming startup had initially planned an IPO in 2020, but after the major first-day pops of DoorDash and Airbnb, the company leadership reconsidered their timeline, according to a report in Axios. Those major day-one share price pops left significant money on the table for the companies selling those shares, an outcome Roblox is likely looking to avoid. Today, the company also announced that it plans to enter the public markets via a direct listing.
Roblox’s 7x valuation multiple signals just how feverish public and private markets are for tech stocks. The valuation also highlights how investors foresee the company benefiting from pandemic trends which pushed more users online and toward social gaming platforms. In a 2019 prospectus, the company shared that it had 17.6 million users, now Roblox claims to have 31 million daily active users on its platform.
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Roblox to host its first virtual concert, featuring Lil Nas X
Roblox this morning announced a partnership with Columbia Records that will allow it to bring a virtual concert experience featuring Lil Nas X to its gaming platform. Notably, this will be Roblox’s first-ever virtual concert, and follows similar events that have been held during the pandemic, like the “One World: Together At Home” concert to benefit WHO in April, and Fortnite’s Travis Scott concert hosted in-game, which attracted 12.3 million concurrent players at its peak.
The Lil Nas X concert, meanwhile, will be hosted in an online event space custom-designed by Roblox to allow for an immersive experience. There will be several different stages, each inspired by Lil Nas X’s songs and music videos, that will use a variety of technologies, including the latest in shadowing, lighting and physically based rendering (PBR) facial recognition technologies, the company says.
During the concert, Lil Nas X will also perform his new single “Holiday” for the first time live, as well as other popular hits.
The event itself will actually be run over three showings, starting with the main event on Saturday, November 14th at 1 PM PST. The Asia showing will follow at 10 PM PST, then the European show will be on Sunday, November 15 at 9 AM PST.
In addition, Roblox and Columbia Records will host a Q&A with Lil Nas X that will be streamed in the concert venue with a preshow at 4 PM on Friday Novemebr 13.
“We’re thrilled to partner with Columbia Records to bring Lil Nas X fans and the Roblox community together in an entirely new way,” said Jon Vlassopulos, global head of Music at Roblox, in a statement about the event. “This concert with Lil Nas X will transport players and their friends into the Metaverse, and bring to life the future of what immersive, social experiences can look like.”
Ahead of the event, the new concert venue will feature mini games and other activities for players to explore, as well as a virtual store offering exclusive merchandise, like accessories, emotes and Lil Nas X avatar bundles.
“We’re throwing the biggest virtual concert of 2020, and I hope everybody in the world can come check it out,” said Lil Nas X, in a statement. “I feel very lucky to be the first artist to ever do this on Roblox. We had so much fun putting this together for my fans, and I can’t wait for everyone to see it,” he added.
Roblox has been signaling an interest in expanding its platform beyond gaming in recent months, as the pandemic fueled a jump in monthly users and player spending, as well as a desire for virtual activities in general. The company in July reported it had grown to more than 150 million monthly active users, up from the 115 million it had in February, before the U.S.’s shelter-in-place orders had kicked in.
It also in July launched “Party Place,” a virtual venue focused on hanging out for meetups or birthday parties.
The shift to virtual platforms for socializing has helped boost Roblox revenues, as well.
One third-party estimate, from Sensor Tower, pegged Roblox mobile spending at $94 million in September. It also suggested Roblox had passed $2 billion in spending to date. A more recent report from Safe Betting Sites estimated Roblox players spent $820 million in total from January through September 2020.
The gaming company is poised to IPO, but a date has not been disclosed.
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