Talking Roblox: Interview With Will Hershey On Gaming Company's Upcoming IPO

Photo courtesy of Roblox

Mobile gaming company Roblox is expected to have an IPO in December. Benzinga recently interviewed Will Hershey, the CEO and co-founder of Roundhill Investments, to get his thoughts.

Large User Base

Hershey said Roblox is in the class of Minecraft, Grand Theft Auto, and Fortnite that have large user bases. Roblox developed a user-created universe and pioneered the “concept of metaverse,” he said.

Incentivizing Users

Hershey said Roblox user-creators are making hundreds of millions of dollars: "It incentivizes people to come back." Hershey said Roblox has a built-in user base that helps promote its own content. Hershey noted that the company's most popular games are created by users.

Financials

Roblox had revenue of $588.7 million in the first nine months of 2020, up 68% year-over-year. Third quarter revenue was up 91% year-over-year. 

What’s Next

Roblox had 31 million daily active users at the end of the third quarter, which was up 82% year-over-year. One vulnerability for Roblox is that “they actually own their own servers,” Hershey said. This means its operations could be more costly than competitors'. The company reported a larger net loss in the recent third quarter. 

However, Hershey called their growth “simply incredible.” The risk for Roblox, according to Hershey, is its focus on users under the age of 13. “What happens when those players graduate?”

Watch the full interview in the video below:

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