In its continued bid to keep brands interested in activating on its platform, Roblox is leaning more heavily into monetization, building out opportunities for users to spend real money. However, the same free-to-play roots that garnered the company so much success from the start may prove to be an obstacle to its new focus.

The key question for marketers is whether users, most of whom are young, will pay for the kinds of experiences that Roblox is promoting, experts told Ad Age. The platform last month rolled out the ability for brands to sell physical merchandise in their worlds via Shopify, and teased a plan to offer pay-to-play games, dubbed “paid access.”

These follow efforts similarly focused on spending that Roblox launched over the past year, including in-game subscriptions for the purpose of building loyalty and limited-edition virtual wearables that can be sold at a higher price than more common items.

“We remain excited about the opportunity to further expand ways brands can reach their key audiences on the platform,” a Roblox spokesperson said.

Roblox’s emphasis on monetization comes as brands face new challenges on the platform, too, particularly with respect to user retention. In order to keep marketers satisfied, Roblox has made large efforts to grow its traditional advertising business, rolling out new ad formats and a diversity of contexts in which to place them. Now, it’s moving full tilt to onboard brands, with the help of agencies, via its partners program and through meta-marketing tactics of its own.

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Meanwhile, a scathing report published last week dredged up enduring concerns with the platform and could threaten to sow doubt among marketers. The report from investment firm Hindenburg Research accused Roblox of fudging its number of users by between 25% and 42%, as well as harboring a dangerous environment in which adult users regularly harass and prey on younger users. Hindenburg has faced criticism, though, for its tactics, which hinge on compiling reports on public companies that it claims are misbehaving and short-selling the companies’ stock for profit.

The Roblox spokesperson, in response to a request for comment on the report, pointed to a statement the company released last week, in which it firmly rejected Hindenburg’s claims, in large part on grounds that the firm’s short-selling position was evidence that it could not be trusted.

The report prompted questions and raised eyebrows from clients of at least one of Roblox’s advertising agency partners, a person familiar with the situation told Ad Age on the condition of anonymity. However, this agency remained aligned with Roblox’s stance and had no plans to alter its partnership with the platform, this person said. 

A former Roblox executive, speaking on the condition of anonymity, told Ad Age there has been some fallout in terms of brand comfort on the platform as a result of the report. The former executive has fielded calls from several agency friends looking for advice to guide their brand clients, who have plans to make their first appearance on Roblox, since the report’s release.

“If you’ve never been on the platform and you cater to kids, this would be a cause for concern,” the former executive said.

‘Prisoner of its own strategy’

Accurate or not, the report’s claims drew attention to Roblox’s dependence on young users, a reality that could hamper its monetization efforts. These consumers have far less spending power than the typical adult consumer and they are less likely to purchase on the platform, said Rafael Brown, founder and CEO of game development studio Symbol Zero. 

As of the start of the year, nearly 60% of Roblox users were 16 years old or younger, and 42% were younger than 13, according to Roblox data. Catering to this niche has afforded Roblox enormous growth—up to nearly 80 million daily active users as of this summer, the company reported—but it has also forced the platform to contend with the constraints of the purchasing behavior of young audiences.

“Roblox is very much a prisoner of its own strategy,” Brown said.

More than half of Gen Z players, for example, said they would only be willing to budget less than $10 a month on wearables, according to a virtual fashion trends report published by Roblox last November. For those willing to budget up to $20 a month, the percentage of Gen Z players dropped to 19%.

These smaller budgets may be conducive for brands to integrate Shopify into their experiences, Brown said. But their emphasis will need to be around selling small things cheaply, such as items that aren’t more than $25 apiece. 

On the other hand, it remains unclear how much users would be willing to shell out for “paid access” experiences. Avatar fashion has become a popular way of personalizing identity in Roblox’s many social spaces, but the fees tied to paid access games only get you in the door—a barrier that doesn’t exist for the vast majority of Roblox worlds. Paid access titles, which for now can only be purchased with Roblox’s native currency Robux, will expand to include fiat currency payments later this year, with entry fees ranging from $10 to $50. They will be available on desktop only.

The lack of clarity about how much gamers will be willing to spend may cause developers to be hesitant to build such premium offerings, Brown said. For paid access games, Roblox has increased the share that developers typically see on the platform to between 50% and 70% of the entry fee. That compares to the roughly 30% share that creators see from in-game purchases in free-to-play titles.

Brown still doubts that Roblox can be a destination for the kinds of high-quality games that require far more time and money to develop, and which would compete with more established titles, including Minecraft.

“No developer is going to spend $10 million to create a Roblox game for kids who don’t spend,” Brown said.

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A potential solution

While acknowledging that kids don’t have much spending power, other experts see it as a non-issue for Roblox’s monetization strategy.

The platform could push brands to offer spending opportunities to older audiences instead of the younger ones, said Charlie Wade, global executive director of growth, innovation and commerce at VML.

“The user base is there,” Wade said, pointing to the fact that 41% of Roblox users are aged 17 and older. 

The platform has signaled an interest in expanding its pool of older audiences. CEO David Baszucki said last year that Roblox is considering virtual dating spaces and news delivery to attract older users. And the company regularly touts its growth in demographics beyond children during its quarterly conference calls.  

Dress to Impress, for example, shot to the top of Roblox’s most popular titles list, and around half of that game’s users are 18 and older, according to The New York Times. Much of its popularity is due to its catching fire on social platforms such as TikTok, as well as tie-ups with celebrities, including Charli XCX.

Roblox may also feel compelled to leave younger users out of its monetization strategy because of the backlash it previously faced regarding advertising to children, Wade said. Ad watchdog groups and the U.S. Federal Trade Commission accused the company of deceptive marketing practices, partly for showing ads to users under 13 despite that practice breaking its community guidelines. Roblox last year updated these guidelines to explicitly restate rules disallowing advertising to children under 13.

Roblox’s commerce integrations will be available only for users 13 and older at launch, a company spokesperson said. It’s unclear how Roblox will enforce this gating. According to Hindenburg’s report, Roblox only implemented age verification for experiences listed for audiences ages 17 and older.

Crossing the digital-physical divide

While Roblox has a proven history of generating sales of digital items, the question it still needs to answer is whether that can translate to sales of physical items, the former Roblox executive said.

Roblox has gradually prepared for its Shopify integration with branded experiences tied to real-world commerce opportunities. Walmart this year enabled visitors to its Walmart Discovered world to purchase real items and ship them to their physical addresses. The retail giant also helped e.l.f. Beauty test a similar physical commerce activation in its own world. And Warner Bros. this summer deployed a Roblox experience to promote  “Beetlejuice Beetlejuice” where users could visit a virtual box office and purchase tickets to in-real-life (IRL) movie showings.

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Roblox has also invested deeply in expanding ad placements for brands. These formats can direct a user to a brand’s Roblox experience and also feature video ads promoting IRL products to influence user behavior off the platform. Roblox has begun selling these ads programmatically.

These tests, culminating in the Shopify integration, will encourage more brands to be on the platform, said VML’s Wade. Moreover, the Shopify integration will attract marketers because they will be able to own their commerce experiences inside the platform, Wade said. Previously, Roblox maintained control of commerce because all items brands could sell were virtual, Roblox-native items.

As Roblox expands its commercial opportunities, it could risk turning the platform into a shopping mall, Wade said.

As of the end of last year, roughly 80% of hours played on Roblox were not monetized, meaning they didn’t drive revenue through channels such as advertising and commerce, Michael Guthrie, Roblox’s chief financial officer, told investors at the company’s most recent investor day. The platform sees this untapped market as a primary opportunity to get brands commercially involved, Guthrie said. 

But, according to the Hindenburg report, Roblox is overstating the number of hours users play on its platform by over 100%. If true, or even partially true, this would mean the monetization opportunity may not be as large as Roblox claims.

In the short term, the former Roblox executive advised brands to pose a hard request to Roblox: “Prove your numbers to me.” In the long term, even large overestimations—which have sometimes been made by social media companies, too—may not have a big impact on brands that join Roblox looking for incremental growth, in the range of reaching tens or hundreds of thousands of users, said Albert Thompson, managing director of digital at Walton Isaacson.

“No one’s going on Roblox to meet 50 million people,” Thompson said.