Craig Donato interview: How Roblox navigates brands, UGC, and the metaverse
It’s a pivotal time for brands as they figure out how to navigate the metaverse. And one of the first places where they’re trying to do that is in the user-generated content (UGC) world of Roblox.
Should brands be more worried about what users might do with their brands? Or should they embrace the fact that players love them so much that they will go through enormous amounts of work to create video game homages to those brands?
Roblox has more than 50 million players a day. I talked about that and more with Craig Donato, chief business officer at Roblox, in a wide-ranging fireside chat at Stanford University Graduate School of Business AME x Gaming Clubs’ Future of the Arrts Media, and Entertainment Conference.
Donato took every question that I flung at him and he answered a bunch of questions from the audience as well. Donato has been at Roblox as CBO for more than five years, and before that he was at Next Door, QVC, Oodle, and Grand Central.
He was a grad of the Stanford University School of Business. I happen to be a UC Berkeley grad, an English major. But despite that old rivalry, we had a nice conversation.
Here’s an edited transcript of our interview.
GamesBeat: Your title is the chief business officer at Roblox. I wonder if you could explain that. I don’t actually run into that title at every company I cover.Craig Donato: It’s a bit of a catch-all title. At Roblox, it means the classic stuff, which is all the partnerships. It also involves the work we do to manage the different communities on Roblox. We have about 10 million people building on Roblox at any given time, so managing that developer community is part of it. All the moderation and safety infrastructure that goes to make sure people have a good experience on our platform, as well as the employee experience, talent acquisition, and those sorts of things. There are a lot of people building the platform. My job is to make sure the users of that platform are happy and successful.
GamesBeat: What are some big numbers when it comes to Roblox, milestones you’ve hit?
Donato: Our creator community earned about half a billion dollars last year. We have about 50 million people a day on the platform. The average time people spend is two to two and a half hours a day. It’s about 100 million hours a day across everyone on the platform. A lot of people spend a lot of time in Roblox.
GamesBeat: There’s a lot of interest and excitement and skepticism in the metaverse space. I wonder how much you’re leaning into the metaverse, while also trying to hold it off, in a sense?
Donato: I would say we’re all in, 100 percent. Roblox is not an overnight success. We’ve been around for about 15 years. The vision of our founder was something he called human co-experience: people doing things together in synchronous 3D spaces. I think people call that the metaverse now, but it’s always been what we focus on. A lot of people called us a game company, for years. We kind of bristled at that. We accepted it, but it’s not really what we were ever about. It’s creating a shared digital space for people to do things together.
We’re all in, though. I think it’s inevitable. A larger and larger percentage of people’s time is going to be spent doing things with other people in the digital space. It’s just inevitable. We’ve seen that over the years. It’s just going to accelerate.
GamesBeat: David Baszucki has also said that you’re creating a platform. You’re creating the infrastructure, but it’s your users that are creating the metaverse.
Donato: Fair enough. None of the content on our platform is produced by Roblox. All the experiences, all the gear, all the avatars, anything that you can buy is produced by the people, our creators. That forces us–one thing that we’ve been very passionate about as a community-driven company, as a platform, we’re only successful if your community is successful. We need to figure out how to incentivize them and make them successful with the tools we provide.
GamesBeat: What is the business model that’s gotten you to where you are, and what do you think will matter more as we head forward?
Donato: Right now our business model is based entirely on microtransactions. It’s thematic to a lot of web3 types of principles, even though it’s not on the blockchain. We have our own currency. People buy that and can spend it on gear and any new experiences on our platform. Once they buy that gear they take it with them from experience to experience. The creators on our platform not only create an experience, but they can mint items. Those can be sold and traded. We simply float that economy. We sell the currency and take a cut of transactions on our platform. That’s worked quite well for us. Years ago we had advertising, and we eventually pulled the advertising down from our platform because the microtransaction model is so effective.
GamesBeat: How big or small are the teams working on Roblox experiences?
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