Roblox

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Kids’ gaming platform Roblox raises $150M

Roblox, which allows kids to create 3D worlds and games, has raised an additional $150 million in funding.

The company didn’t disclose its valuation in the announcement, but a source with knowledge of the deal told us that it valued Roblox at more than $2.5 billion — the price that Microsoft paid to acquire Minecraft four years ago.

“This is a big year for us that fortifies the dream,” said co-founder and CEO David Baszucki .

Earlier this year, Roblox announced that it had become cash-flow positive, and Baszucki told me the company remains “extremely profitable.” So why raise more money?

“First and foremost, the reason to fundraise is to have a war chest, to have a buffer, to have the opportunity to do acquisitions, to have a strong balance sheet as we grow internationally,” he said.

In order to support that growth, Baszucki said Roblox will be opening offices in some regions like China (“most likely with a partner that hasn’t been announced yet”), but it also requires building out infrastructure like local language and local payment support.

Roblox Developers Conferen

Roblox has now raised a total of $185 million in equity funding. The new round was led by Greylock Partners and Tiger Global, with participation from existing investors Altos Ventures, Index Ventures, Meritech Capital Partners and others.

Greylock’s David Sze has had big successes in both gaming and social media, having backed Facebook, LinkedIn, SGN and others. But he said Roblox is the first company he’s seen to “unify those two together on a platform in a magical kind of way.”

Apparently, Sze has known Baszucki for a long time — their kids went to the same school, and Sze remembered Baszucki bringing an early version of Roblox to the science fair. Gaming companies can be a risky investment, because their business relies on creating new hits, but Sze said Roblox is different.

“They aren’t making the games,” Sze said. “They’re letting the long tail of developers develop all the games on the platform, they’re let users decide what the successes are. It’s much more like a YouTube or much more like an Apple with the App Store.”

In a blog post about the funding, Sze even suggested that some of the next big gaming franchises could emerge from the Roblox platform, a prediction he repeated in our interview

“I’d be surprised if there aren’t some huge, high quality games that aren’t originated on Roblox in the next three-to-five years,” he said.

Roblox says it now has more than 70 million monthly active users, with more than 4 million creators who have built more than 40 million-plus experiences.

Of course, having a big platform with lots of user-generated content also creates risks — as illustrated in a recent incident where characters mimed gang raping a young girl’s avatar. (Roblox said a single server had been hacked, allowing users to upload code that violated the company’s rules.)

Asked whether these risks gave him any pause, Sze said, “User protection, user safety, all the aspects of having of having youth on your platform, it takes those things extremely seriously.”

“Are we perfect? No,” he said. “But I can tell you from inside the company that it’s an incredibly high priority. They’ve already done lots of things to help protect and make the user experience the best, and they have a list of stuff that they’re already working on.”

I’ll be interviewing Baszucki on-stage at Disrupt SF this afternoon, so stay tuned to TechCrunch (or come on out to the event!) for more on the funding and his future plans.

This story has been updated with the corrected amount for Roblox’s total funding.

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Roblox responds to the hack that allowed a child’s avatar to be raped in its game

There’s a special place in Hell for people who think it’s funny to rape a 7-year-old girl’s avatar in an online virtual world designed for children. Yes, that happened. Roblox, a hugely popular online game for kids, was hacked by an individual who subverted the game’s protection systems in order to have customized animations appear. This allowed two male avatars to gang rape a young girl’s avatar on a playground in one of the Roblox games.

The company has now issued an apology to the victim and its community, and says it has determined how the hacker was able to infiltrate its system so it can prevent future incidents.

The mother of the child, whose avatar was the victim of the in-game sexual assault, was nearby when the incident took place. She says her child showed her what was happening on the screen and she took the device away, fortunately shielding her daughter from seeing most of the activity. The mother then captured screenshots of the event in order to warn others.

She described the incident in a public Facebook post that read, in part:

At first, I couldn’t believe what I was seeing. My sweet and innocent daughter’s avatar was being VIOLENTLY GANG-RAPED ON A PLAYGROUND by two males. A female observer approached them and proceeded to jump on her body at the end of the act. Then the 3 characters ran away, leaving my daughter’s avatar laying on her face in the middle of the playground.

Words cannot describe the shock, disgust, and guilt that I am feeling right now, but I’m trying to put those feelings aside so I can get this warning out to others as soon as possible. Thankfully, I was able to take screenshots of what I was witnessing so people will realize just how horrific this experience was. *screenshots in comments for those who can stomach it* Although I was immediately able to shield my daughter from seeing the entire interaction, I am shuddering to think of what kind of damage this image could have on her psyche, as well as any other child that could potentially be exposed to this.

Roblox has since issued a statement about the attack:

Roblox’s mission is to inspire imagination and it is our responsibility to provide a safe and civil platform for play. As safety is our top priority — we have robust systems in place to protect our platform and users. This includes automated technology to track and monitor all communication between our players as well as a large team of moderators who work around the clock to review all the content uploaded into a game and investigate any inappropriate activity. We provide parental controls to empower parents to create the most appropriate experience for their child, and we provide individual users with protective tools, such as the ability to block another player.

The incident involved one bad actor that was able to subvert our protective systems and exploit one instance of a game running on a single server. We have zero tolerance for this behavior and we took immediate action to identify how this individual created the offending action and put safeguards in place to prevent it from happening again. In addition, the offender was identified and permanently banned from the platform. Our work on safety is never-ending and we are committed to ensuring that one individual does not get in the way of the millions of children who come to Roblox to play, create, and imagine.

The timing of the incident is particularly notable for the kids’ gaming platform, which has more than 60 million monthly active users and is now raising up to $150 million to grow its business. The company has been flying under the radar for years, while quietly amassing a large audience of both players and developers who build its virtual worlds. Roblox recently stated that it expects to pay out its content creators $70 million in 2018, which is double that of last year. 

Roblox has a number of built-in controls to guard against bad behavior, including a content filter and a system that has moderators reviewing images, video and audio files before they’re uploaded to Roblox’s site. It also offers parental controls that let parents decide who can chat with their kids, or the ability to turn chat off. And parents can restrict kids under 13 from accessing anything but a curated list of age-appropriate games.

However, Roblox was also in the process of moving some of its older user-generated games to a newer system that’s more secure. The hacked game was one of several that could have been exploited in a similar way.

Since the incident, Roblox had its developers remove all the other potentially vulnerable games and ask their creators to move them over to the newer, more fortified system. Most have done so, and those who have not will not see their games allowed back online until that occurs. The games that are online now are not vulnerable to the exploit the hacker used.

The company responded quickly to take action, in terms of taking the game offline, banning the player and reaching out the mother — who has since agreed to help Roblox get the word out to others about the safeguards parents can use to protect kids in Roblox further.

But the incident raises questions as to whether kids should be playing these sorts of massive multiplayer games at such a young age at all.

Roblox, sadly, is not surprised that someone was interested in a hack like this.

YouTube is filled with videos of Roblox rape hacks and exploits, in fact. The company submits takedown requests to YouTube when videos like this are posted, but YouTube only takes action on a fraction of the requests. (YouTube has its own issues around content moderation.)

It’s long past time for there to be real-world ramifications for in-game assaults that can have lasting psychological consequences on victims, when those victims are children.

Roblox, for its part, is heavily involved in discussions about what can be done, but the issue is complex. COPPA laws prevent Roblox from collecting data on its users, including their personal information, because the law is meant to protect kids’ privacy. But the flip side of this is that Roblox has no way of tracking down hackers like this.

“I think that we’re not the only one pondering the challenges of this. I think every platform company out there is struggling with the same thing,” says Tami Bhaumik, head of marketing and community safety at Roblox.

“We’re members of the Family Online Safety Institute, which is over 30 companies who share best practices around digital citizenship and child safety and all of that,” she continues. “And this is a constant topic of conversation that we all have – in terms of how do we use technology, how do we use A.I. and machine learning? Do we work with the credit card companies to try to verify [users]? How do we get around not violating COPPA regulations?,” says Bhaumik.

“The problem is super complex, and I don’t think anyone involved has solved that yet,” she adds.

One solution could be forcing parents to sign up their kids and add a credit card, which would remain uncharged unless kids broke the rules.

That could dampen user growth to some extent — locking out the under-banked, those hesitant to use their credit cards online and those just generally distrustful of gaming companies and unwanted charges. It would mean kids couldn’t just download the app and play.

But Roblox has the momentum and scale now to lock things down. There’s enough demand for the game that it could create more of a barrier to entry if it chose to, in an effort to better protect users. After all, if players knew they’d be fined (or their parents would be), it would be less attractive to break the rules.

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Roblox follows Minecraft into the education market

Roblox, the massively multiplayer online game favored by the under 13 crowd, is following in Minecraft’s footsteps with a move into the education market. The company this morning announced a new education initiative, Roblox Education, that will offer a free curriculum to educators, along with international summer coding camps, and a free online “Creator Challenge” in partnership with Universal Brand Development, which will see kids building Roblox games inspired by Jurassic World: Fallen Kingdom. 

The gaming company has been around for many years, but only recently reached a critical mass where it was ready to talk about its numbers. Today, Roblox sees over 60 million monthly active users, and its creator community building new worlds for kids to explore has doubled to 2 million this year from the year prior, it said earlier this year.

Roblox gets kids coding by hooking them on the game itself when they’re young – around elementary school age. By middle school, users are downloading Roblox Studio to build their own games and experiences. And by high school, they’ve learned to code to customize their games even further.

And the kids aren’t just building for fun – there’s money to be made, too. The top creators make two to three million a year, the company claims. The games are free, but creators monetize through the sale of virtual goods. Roblox says it paid out $30 million to its creator community last year, and is now cash-flow positive.

With Roblox Education, the aim is to get more kids coding by working with educators directly.

The new curriculum offers teachers 12 hours of step-by-step tutorials, handouts, technical setup guides, outlines, lesson guides, and more. It’s shared freely under a Creative Commons license so teachers can use or modify it as they see fit. In the future, the curriculum will be expanded to include other subjects, as well, like Physics and Design, the company says.

In addition, teaching kids how to use Roblox Studio will be the main focus of more than 500 coding camps and online programs this summer in the U.S., U.K. Hong Kong, Singapore, Canada, Spain, Brazil, and Portugal. The kids will learn how to create, publish and market their games to others.

The company will also run its 4th annual Roblox Summer Accelerator, and host 45 young developers at its HQ for the summer. The program has previously produced some of the more popular Roblox titles, like MeepCity and Lumber Tycoon.

And it will host its annual Roblox Developer Conference in San Francisco July 13-15, 2018, and in Amsterdam August 17-19, 2018. It’s doubling the number of attendees this year at both.

Finally, Roblox will host its first Creator Challenge with Universal, where kids learn tricks of game building via a Jurassic Park-themed, self-paced course.

“Roblox’s mission is to power and fuel imagination while inspiring a new generation of creators,” said Grace Francisco, VP of Developer Relations at Roblox, said in a statement about the launch. ”We are thrilled to be launching our education initiative that gives young people of all ages and backgrounds the chance to develop the crucial skills needed to be tomorrow’s entrepreneurs and creators.”

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Goldman Sachs CFO Martin Chavez and Roblox CEO David Baszucki to hit up Disrupt SF

We’ve already got a star-studded lineup prepped to speak at Disrupt SF, running September 5 to September 7. So far, we’ve announced appearances by Sophia Amoruso, Carbon’s Dr. Joseph DeSimone, Adidas’ Eric Liedtke, Ripple’s Brad Garlinghouse, Michael Arrington, and Drew Houston.

But given that today is the last day to purchase early bird tickets, we thought we’d let slip a couple more stellar speakers joining the agenda.

We’re thrilled to announce that Roblox CEO and cofounder David Baszucki and Goldman Sachs CFO Martin Chavez will be joining us on the Disrupt SF stage. (Not together, to be clear.)

David Baszucki – Roblox

Back in 2006, Roblox started out as an interactive physics program, giving people the opportunity to test out their own physics experiments in a virtual setting, from testing out pulley systems to simulating a car crash.

In the time since, Roblox has managed to turn physics into a gaming sensation for young people.

The massively multiplayer online game has overtaken Minecraft and is wildly popular with the pre-teen crowd. In fact, the company recently announced that it has hit 60 million monthly users, spending more than 780 million hours on the platform.

Roblox lets users build their avatars and almost anything else using their imagination, sort of replacing the LEGO of older generations. But because those users tend to skew young, Roblox has made safety a priority, implementing a number of parental controls, with moderators scanning all communication between users, ensuring that a young person doesn’t give out any personal identifying information.

The company has raised nearly $100 million from investors like Index Venture Partners, First Round Capital, Altos Ventures, and Meritech Capital Partners. Roblox also recently signed a deal with HarperCollins to grant them the publishing rights for Roblox, marking the beginning of Roblox’s existence in the physical world.

Plus, Roblox has established itself on YouTube as well as with merchandise, which is an increasingly important part of successfully running a game studio.

We’re absolutely psyched to have David Baszucki join us on stage to talk about the company’s meteoric rise.

Martin Chavez – Goldman Sachs

Many don’t think of Goldman Sachs as a technology company. But those people would be wrong.

Goldman Sachs CEO Lloyd Blankfein has said many a time that the firm is a technology company, and has gone on to state that Goldman Sachs employs more engineers than companies like Facebook and Twitter.

But Goldman Sachs is also a huge investor, with more than 600 investments according to CrunchBase. Some of those investments include WeWork China, Cadre, Dropbox, Uber, and Ring, which recently sold to Amazon for more than $1 billion, according to reports.

Trust us, keeping a finger on the bleeding pulse of technology is exhausting. But Goldman Sachs CFO Martin Chavez, who has a long history in the technology sector, is keeping up with the Joneses.

Before serving as the CFO, Chavez was the Chief Information Officer at Goldman Sachs and led the technology division. He’s also a serial founder, cofounding and serving as CTO of Quorum Software Systems from 1989 to 1993, as well as cofounding Kiodex, where he served as Chairman and CEO until 2004.

We’re excited to pick Chavez’s brain on how fintech might evolve over the next five years and what role Goldman Sachs might play in that evolution, especially given the rise of cryptocurrencies and the blockchain.

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Roblox nabs $92 million to power its massive social gaming platform for kids

 Roblox has spent the greater part of the millennium creating a cool place for kids to play a diverse collection of games inside a single cross-platform world for its huge audience of tens of millions of monthly active youngsters. The company announced Tuesday that it has closed a massive $92 million funding round led by Meritech Capital Partners and Index Ventures. Read More

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