Roblox Reaches $45 Billion as Gaming Booms Amid Pandemic

By Hellen Zaboulani

Roblox, a gaming platform aimed at children, went public with a boom on Wednesday.

The share price for Roblox soared to $69.50 on its first day of trading, leaping past a reference price of $45 set on Tuesday. The share price values Roblox at $45 billion, which is up from $4 billion just last year. The company went public in a direct listing, where no new shares were added to the market.

As reported by the NY Times, the Silicon Valley gaming company is reaping the benefits of the pandemic and reflects on how kids have been spending their extra time at home. Video game companies have been rolling in dough. In 2020, a record high of $56.9 billion was spent in the U.S. on gaming, up 27 percent year over year, as per the NPD Group. “The game industry’s swimming in cash,” said Joost van Dreunen, a New York University professor who studies the video game business. “It’s just raining money on these people, on these companies.”

Microsoft reported $5 billion in quarterly gaming revenue for the first time, thanks to sales of its new Xbox consoles. Sony, which put out the PlayStation 5 in November, has reported a 62 percent increase in profits. Other game makers have also been benefiting from the pandemic. With mobile games soaring in popularity, new gaming start-ups have been popping up left and right, with bigger companies buying out game makers. “It seems like there is a new start-up funded nearly every day,” said Evan Van Zelfden, the managing director for Games One, an advisory firm. “Everybody wants to be the next Roblox.” Still, with the COVID-19 vaccination being rolled out, there may finally be some relief for New Yorkers. That may negatively affect the gaming industry. “There’s going to be a lot less time to play Roblox,” Mr. van Dreunen said.

David Baszucki, Roblox’s chief executive and a founder, said in an interview on Wednesday that he doesn’t think they will lose lots of players post-pandemic, when kids can go back to social activities and visiting with friends. “We don’t think we’re going to lose all of that, or all of the amazing people we’ve gathered,” Baszucki said. Last year, about 32.6 million people a day logged into Roblox on average—that’s close to double the average number of users in 2019, the company said. Roblox, founded in 2004 by Mr. Baszucki and Erik Cassel, is not yet turning a profit, but revenue jumped 82 percent to $924 million in 2020.