Generation Alpha is hooked too! The impact of the "immersive social platform" played by about 80 million people daily.

Dentsu Inc. Innovation Initiative's Shusuke Morioka and Roblox's Justine Higueras. This interview article was recorded at the "Roblox Forum in Tokyo" event held in September 2024.

Roblox is an extraordinary social platform boasting approximately 80 million daily active users (DAU) worldwide.

Popular primarily among younger generations from Alpha to Gen Z, Roblox is an immersive social platform where users enter virtual spaces with their own avatars and chat with others.

A major feature is that it is a UGC (user-generated content) media platform where users create their own games, virtual spaces, items, and more for other users to enjoy.

Numerous companies and brands have entered this massive economic ecosystem, achieving high-quality user engagement.

This article introduces essential knowledge Japanese business professionals should know about Roblox, where corporate tie-up projects are also thriving.

Dentsu Inc. Innovation Initiative's Shusuke Morioka spoke with Roblox's Marketing Director, Justine Higueras!

<TABLE of Contents>

▼Everyone Can Be a Creator! A Social Platform Encompassing a Massive Economic Ecosystem

▼Monetization on Roblox! A Fully Realized "Creator Economy"

▼A New Media Platform for Brands to Connect with Younger Audiences

▼Roblox Forum Featuring Companies and Creators Was a Huge Success

▼Keep an Eye on New Initiatives Between Roblox and the Dentsu Group!

Influencers like Hikakin are also paying attention to Roblox!?

Everyone can be a creator! A social platform encompassing a massive economic ecosystem
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Roblox's Justine Higueras

Morioka: First, could you give us a brief introduction to Roblox?

Justine: It's an immersive social platform where you can enter "virtual spaces" with various concepts using your own avatar, communicate with friends via voice or text chat, and play games. You can access it from multiple devices, including smartphones, PC browsers, and VR headsets.

Features of the immersive social platform "Roblox"

① It's a UGC (User Generated Content) platform where users themselves become creators, producing content for others to enjoy.

② It's an immersive platform where you can access 3D spaces using your own avatar across multiple devices, from VR headsets and home consoles to smartphones.

③ You can buy and sell content using "Robux," the platform's currency available even at convenience stores.

Morioka: So it's essentially a new social media platform enjoyed within a three-dimensional virtual space, often referred to as the metaverse. Could you share the user numbers and the user demographics?

Justine: As of August 2024, we have approximately 80 million DAU (Daily Active Users) worldwide. It's also a platform with extremely strong user engagement, with an average daily session time per user of 2.4 hours. User numbers continue to grow, and we are now targeting 100 million DAU.

The user base is very young, with teens and twenties—the so-called Generation Z and Alpha—forming the core user group. Furthermore, 40% of users are female, which is a significantly higher ratio compared to other immersive social platforms.

Morioka: 2.4 hours per day, multiplied by approximately 80 million daily users—that seems like an extraordinary figure. How do users enjoy Roblox?

Justine: Within Roblox, there are over 5.3 million virtual spaces and games created by users. This content proliferates daily, with new trends emerging almost constantly.

Users spend much of their time in these virtual spaces communicating with others, primarily through voice chat. Roblox is a social hub, with an average of 18.6 million friend requests exchanged daily. Games and other content facilitate this communication.

Morioka: Since Roblox is a global service, I imagine there's a language barrier for those wanting to enjoy multi-user content. How do you address that?

Justine: We place significant emphasis on our automatic translation feature and continuously improve it daily. Our approach isn't just simple machine translation; we aim for localization that considers "the culture of that country." Text created in Japanese is automatically translated into 17 languages. The same applies to other languages, enabling users from different cultural backgrounds to enjoy the same content together.

Morioka: Among immersive social platforms, Roblox has an exceptionally large user base. What are the platform's key strengths?

Justine: Its biggest feature is its strong focus as a UGC platform. Roblox's founder built this platform with the strong belief that "anyone can be a creator." Roblox users can create virtual spaces however they like, craft "UGC items" like avatars and accessories, and offer them to other users.

We champion the concept of "anyone can create, anytime, anywhere," focusing on lowering the barriers to content creation. We believe Roblox's appeal lies in the incredible content created daily by its global community of users and creators.

Roblox also hosts major hit game content by Japanese creators, such as "Himitsu no Orusuban" and "Petapeta Sama." With robust features like automatic translation, Roblox enables creators to easily distribute content not only to Japanese users but to users worldwide.

Morioka: So everyone is both a user and a creator, and all participants together build the Roblox world. Are there key points for nurturing talented creators?

Justine: We continuously update the content development environment we provide to creators to meet their needs. For example, our comprehensive engine "Roblox Studio," which enables simultaneous multi-user collaboration, is available for free download and has been well-received. We also offer AI-powered support features for programming and material generation. Furthermore, we consistently provide the best possible environment for creators, encompassing not only the development tools within Roblox but also external third-party tools.

Completed content is published and distributed globally within seconds. Since Roblox is a platform where communicating with fan communities is crucial, we also offer robust features like announcement tools for reaching the fan community of a released virtual space.

"Anyone can create, anytime, anywhere" is the world Roblox aims to create. Features like AI-powered code assistance, material generation, and texture generation support creators in bringing their ideas to life instantly.

Monetize on Roblox! The Fully Realized "Creator Economy"

Morioka: On Roblox, you can also earn revenue from the content you create, right? What kind of economic ecosystem has been built?

Justine: Roblox has its own currency called "Robux," which users can use to make in-game purchases or buy UGC items. By ensuring top creators receive their fair share of profits, it's growing daily into a more sustainable creator economy.

※Creator Economy = An economic ecosystem where individual creators leverage their skills online to provide goods and services and generate income.

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Millions of creators monetize on Roblox. The top 10 creators earned $30 million (approximately ¥4.5 billion at ¥150/USD) in one year, the top 100 earned $5 million (approximately ¥750 million), and the top 1,000 earned over $750,000 (approximately ¥11 million). Additionally, Roblox provides monetized users with analytics tools for marketing and managing their sales revenue.

Creator earnings published on the Roblox Forum. Top 10 creators generate approximately ¥4.5 billion annually. This figure represents roughly fivefold growth since 2019.

Morioka: What types of content primarily generate this revenue?

Justine: The largest portion comes from game-related sales. Roblox aims to capture "10% of the global game market's transaction volume." To achieve this, we want to enrich all types of content—not just games, but also educational, shopping, communication tools, and more.

Morioka: I understand Roblox has a very large teenage user base. How do users in age groups that typically cannot use credit cards make payments or purchase UGC items?

Justine: Parents sometimes give them as gifts. Also, "Roblox Gift Cards" are available at retailers and stores worldwide, so they often buy these using their allowance. In Japan, "Roblox Gift Cards" are sold at convenience stores nationwide. These can be used to purchase "Premium Membership," which offers various benefits, or "Robux." They're available at major convenience store chains, so next time you're at a convenience store, keep an eye out for them (laughs).

Morioka: Let's talk a bit more about monetization. What methods are available to generate monetary profit within Roblox?

Justine: There are several ways, but the main ones are subscription-based paid virtual spaces and selling UGC items within those spaces. In the US, some creators make a living solely from designing UGC avatars, and the digital fashion market for avatars is growing.

UGC items can be sold not only by developers but also by third parties earning affiliate commissions. Additionally, revenue can be generated from "advertising slots" within virtual spaces. Recently, a new "paid access" system was implemented, allowing creators to charge for access to their virtual spaces. Creators then receive revenue based on the sales price of their virtual space.

Furthermore, for these monetization efforts, features like automatic price optimization and region-specific pricing will also be implemented.

User-created avatar items and virtual spaces can be monetized. A significant creator economy exists within Roblox.

A new medium for brands to communicate with younger audiences

Dentsu Inc. Innovation Initiative, Mr. Shusuke Morioka

Morioka: Roblox is seeing daily growth in its massive user-driven creator economy, and collaborations with companies and brands, along with advertising placements, are also thriving, right?

Justine: Yes. Over 400 brands have already entered Roblox. Users have accessed these official brand virtual spaces a cumulative total of 4 billion times. This is underpinned by Roblox users' culture of enjoying and embracing diverse content.

Morioka: What are the key strengths of Roblox as a platform for corporate promotions and initiatives?

Justine: Key features include its ability to reach Gen Z and Alpha generations, along with its high female user ratio. Roblox is like a crossroads for social entertainment. Users spend 80% of their average daily 2.4-hour session time with friends, and the remaining 20% customizing their avatars.

Additionally, Roblox users are highly open and proactive, visiting an average of 19 new virtual spaces per month. This openness is appealing for brands looking to engage with the community.

Furthermore, the Roblox community extends beyond the platform to X, YouTube, TikTok, and others, with related videos accumulating over 1 billion views. A key point is that initiatives launched within Roblox don't necessarily stay confined to the platform; they can sometimes gain significant traction elsewhere. For instance, a coconut water brand created a coconut-shaped avatar suit on Roblox, which then went viral on TikTok, boosting its visibility.

Morioka: When brands implement initiatives on Roblox, what approaches are available?

Justine: One approach is for companies to create and provide their own official virtual spaces. Similarly, they can offer official avatar items. They can also display ads within Roblox. Another strategy, increasingly mainstream as a step before building a virtual space from scratch, is called "integration" – limited-time collaborations with popular virtual spaces or games already active on Roblox. Through interactive experiences on Roblox, brands can convey compelling stories in new and engaging ways.

According to our data, users spend an average of just over 11 minutes in a single virtual space. On typical platforms, engagement with content lasts only seconds. With 11 minutes, you can thoroughly tell your brand story. Marketers, wouldn't this spark all sorts of communication ideas?

Once a virtual space is created, content can be added or updated as needed, making it well-suited for long-term initiatives. For example, you can establish a brand's virtual space and later add content tied to new product launches or run limited-time commercials within it.

Morioka: What are some actual brand initiatives using this?

Justine: A recent example is Warner Bros. Pictures launching a US-exclusive virtual space, along with various avatars and items, to coincide with the release of Tim Burton's film "Beetlejuice."

Justine: Multiple campaigns ran within this space. Beetlejuice fans could purchase actual movie tickets inside the virtual space and instantly make plans to go to the theater with friends. Japanese Roblox creator Manato, known for the hit game "Escape from Your Face," created a Beetlejuice collaboration game. This drove over 22 million visitors to the virtual space.

Morioka: So it was used for movie promotion and was a huge success. What other brand examples are there?

Justine: Lamborghini launched its new hybrid vehicle, the "Lamborghini Urus SE." Before its release, they created an experience within Lamborghini's virtual space, "Driving Empire," where users could test drive and customize the car. In this test drive experience, users collectively drove a total of 6 million miles (approximately 9.6 million kilometers). A major achievement of this campaign was reaching younger demographics who had never heard of Lamborghini before.

Additionally, Alo Yoga, an apparel company specializing in sportswear like yoga clothing, maintains a permanent virtual space called "Alo Sanctuary." This initiative focuses less on selling products and more on conveying the brand's worldview and values—such as mindfulness and yoga—to younger audiences. This ability to engage users long-term is a key strength of Roblox.

Morioka: Could you elaborate on your avatar and item initiatives?

Justine: Avatars, representing users' alter egos, are incredibly important on Roblox. Users enthusiastically purchase avatar items and meticulously customize them daily. A robust "digital fashion" market for dressing avatars has been established. Partnering with Roblox creators is highly effective for brand avatar development. The necklace Adidas created with renowned creator WhoseTrade sold instantly for 2 million Robux—about 4 million yen at the time, since 1 Robux is roughly 2 yen.

Morioka: Collaborating with Roblox creators to sell items is an interesting strategy.

Justine: A major advantage of the Roblox marketplace is the absence of physical constraints. We call this Phygital (Physical + Digital).

Morioka: Are there specific industries particularly suited for Roblox?

Justine: Brands from all industries are entering. While strategies need to be tailored to the target audience, the fashion industry seems particularly well-suited for avatar sales. This summer, a fashion-themed virtual space called "Dress to Impress," created in collaboration with popular singer Charli XCX, generated significant buzz.

Morioka: What are your thoughts on Japanese brands implementing strategies on Roblox?

Justine: It's an extremely effective platform for communicating with the new generation. Japanese users are also growing rapidly. In 2023, user numbers increased by 58% year-over-year, time spent increased by 66%, and Robux circulation surged by 112%. This represents a very significant growth rate compared to other regions.

Morioka: Being able to purchase Robux at major convenience stores is certainly a big factor, right? As a UGC platform, what are your expectations for Japan?

Justine: Given Roblox's younger user base, popular content is often inspired by Japanese IPs like manga and anime. Many avatar items sold on the Marketplace are also related to Japanese content. So, we definitely want to increase official Japanese IP content going forward.

For example, we're holding an original game contest for "Attack on Titan" through a collaboration with Kodansha. Also, this winter, the official "ONE PIECE" game, "ONE PIECE GRAND ARENA," is scheduled for release. Furthermore, in the next phase, we want to cultivate original Roblox content and expand it externally.

We also hope many individual Japanese creators will join us, so we have high expectations for the Dentsu Group's creator support project, "House of Creators."

Morioka: Could you share your expectations for Japanese brands and your outlook for the future?

Justine: I hope the examples shared here give you a sense of what brands can achieve on Roblox. Beyond promotional campaigns, they can directly sell content. Starting this year, we launched integration with Shopify to enhance commerce capabilities. We anticipate new experiences emerging across categories like gaming, social, and shopping. Roblox will continue expanding its "Creator for Everyone" concept while aiming for 100 million DAU.

Morioka: Thank you so much for today!

The Roblox Forum, featuring companies and creators, was also a huge success

Held at Shibuya Sakura Stage in late September, the Roblox Forum in Tokyo brought together popular Japanese creators, influencers, and brand representatives for lively networking.

The stage program began with a keynote address by Matt Curtis, Vice President of Developer Relations, and Justine also took the stage for a presentation titled "How Brands Can Succeed on Roblox."

Matt Curtis, Vice President of Developer Relations

In the presentation "Roblox in the Japanese Market" by Zhen Fang, Head of International overseeing the international division, a call was made to creators regarding four categories experiencing supply shortages.

Examples included "HELLO! TOKYO FRIENDS" for open-world action and "Dress to Impress" for social experiences. Hiro Shimose of GeekOut and Keigo Aoki of Dentsu Innovation Initiative also shared their expectations for the Japanese market.

From left: GeekOut's Hiroshi Shimase, Dentsu Inc. Innovation Initiative's Keigo Aoki, Roblox's Zhen Fang

Keep an eye on the new collaboration between Roblox and the Dentsu Group!

As part of its Roblox initiatives, the Dentsu Group has launched the "House of Creators" project to support the development of next-generation creators.

Dentsu Group Launches "House of Creators" Project to Spark Global Enthusiasm by Supporting Next-Generation Content Creators
https://www.group.dentsu.com/jp/news/release/001304.html

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Additionally, Bunka Fashion College has partnered with Roblox and Dentsu Group to launch a "Digital Fashion Program" aimed at nurturing the next generation of designers for the rapidly expanding "digital fashion" market.

Bunka Fashion College, Dentsu Group, and Roblox Partner to Launch Japan's First "Digital Fashion Program"
https://www.bunka-fc.ac.jp/ct-collabo/42727/

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Keep an eye on Roblox and Dentsu Group going forward!