Roblox Developing New, 'Immersive' Ad Formats

Roblox, the popular online game platform -- and game-creation system -- is rolling out two new ad formats as brands try to gain the attention of gamers and inch their way into the metaverse.

At its annual developer conference on Friday, Roblox announced plans to debut the ads next year. This signifies a major shift for the company, whose business so far has relied solely on the selling of its virtual currency (Robux), which players use to level-up and buy in-game goods.

Prior to the rollout, Roblox said it will test ads with unspecified developers and brands by the end of 2022. 

Roblox Chief Product Officer Manuel Bronstein said the company has tested online ads with brands like Warner Bros. and Vans, but remains committed to Robux and in-game items.

“We have an amazing transactional economy, and we will continue to invest in it,” Bronstein said, explaining Roblox’s nod toward early ad-testing as “a good strategic bet.”

Due to lackluster economics, Roblox lost 60% of its value ($80 billion in November) in 2022. The company’s second-quarter financials missed on the top and bottom lines and revenue growth slowed by 30% from over 100% the year prior. 

The ads Roblox is testing were described as “immersive” formats, though it’s unclear what they will actually look like.

Bronstein mentioned digital billboards, a popular form of advertising in games and assumed to be one for future metaverse branding.

Bronstein said ads tested with Vans and Warner Bros. send users directly to those companies’ virtual Roblox communities, which is indicative of how virtual shopping may work in the metaverse. 

Bronstein added that businesses could also use their metaverse ads as connections to the real world, via a branded digital item becoming a coupon to use in a physical store.

Roblox has accumulated a user base of over 52 million, the majority of whom are kids, which may be a hindrance to introducing ads, as the company made clear that children under the age of 13 will not be able to interact with them.

Apple’s iOS privacy changes and the greater economic slowdown have made the market turbulent and chaotic.

In lieu of this, CNBC reported “Roblox will have to prove its value before brands will open their wallets in any meaningful way.”

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