Venture capital discovers a $150bn industry
Roblox is expected to become the go-to online network for kids and teenagers
Hey everyone, Andreesen Horowitz (a16z) just discovered that games are “bigger than movies and music combined.”
Anyway, what excites me is that a16z valued Roblox at $4bn. That is a really big number. Many of us will recall that Microsoft acquired Minecraft’s dev Mojang for $2.5bn back in 2014. It raises the question of what justifies the higher valuation. Succinctly, like Fortnite and the vision of Epic Games CEO Sweeney that online games are ultimately a social platform (a view I share, btw), Roblox is expected to become the go-to online network for kids and teenagers. It currently boasts 115MM monthly active users, which is roughly >3x growth from just a few years ago.
The expectation is that Roblox will generate over $1bn in revenue in 2020E (it got close to that number last year), across all of its activities. It has a strong presence online via YouTube (6th most viewed title in 2019 with 69 billion views) and offline at retail. Among the three platforms, console is by far the smal…
