00:00:02 · S0, David Baszucki
[00:00:02] S0: Bloomberg Audio Studios. Podcasts. [00:00:05] S1: Radio. News. [00:00:07] S0: Okay, let's look at shares of Roblox, down about 20%. I think that puts them on track for their biggest drop since late July. The online gaming company is seeing some growing pains, rolling out tougher child safety measures, and then daily active users falling 9% last quarter, bookings dropping 12% year on year. But the company is betting that AI can help reignite growth, with more than 80% of its top games already using AI tools. Delighted to welcome back to the program, Roblox founder and CEO, Dave Baszucki. Actually, like sequentially, quarter on quarter, you guys have some underlying momentum here. But, you know, is this policy impacting behavior on the user side? Dave, what are you seeing? [00:00:49] S1: Hey, thanks for having me on. I just want to highlight we came off a $ 1. 7 billion quarter and beat the high end of our guidance with 138 million daily actives. A couple of really interesting things to highlight here are 18 and up users. The DAUs there are growing 18% year on year. We see incredible strength around the world. India is up 37% year on year. And as you correctly noted, we are in the midst of an AI-fueled content acceleration on the platform. Some of the metrics we use for new content on Roblox, like how many assets are being created, have literally tripled in the last month. So our business is built on great content and we're just seeing an incredible expansion of that content.
00:00:49 · David Baszucki, S0
[00:00:49] S1: Hey, thanks for having me on. I just want to highlight we came off a $ 1. 7 billion quarter and beat the high end of our guidance with 138 million daily actives. A couple of really interesting things to highlight here are 18 and up users. The DAUs there are growing 18% year on year. We see incredible strength around the world. India is up 37% year on year. And as you correctly noted, we are in the midst of an AI-fueled content acceleration on the platform. Some of the metrics we use for new content on Roblox, like how many assets are being created, have literally tripled in the last month. So our business is built on great content and we're just seeing an incredible expansion of that content. [00:01:41] S0: Dave, on the over 18 user cohort, does that sort of on a per user basis carry higher revenue or it's more monetizable for you, the growth in that segment? [00:01:54] S1: Yeah, we've shared our vision of having 10% of the global gaming marketplace run on Roblox. Right now in the US, under 18, that's about 20% of the gaming market. 18 and up has incredible headroom. And we shared on the earnings call, our 18 and up users spend on aggregate about 50% more per engagement. So that is a higher monetizing market for us. It's about four times as big as the under 18 market, and it's growing really solidly. [00:02:31] S0: Dave, have you played steal an egg?
00:02:31 · S0, David Baszucki
[00:02:31] S0: Dave, have you played steal an egg? [00:02:36] S1: I have played Steel and Egg, and I want to highlight this Saturday, if you come by on Halloween at 8 a.m., you'll find the Jonas Brothers in Steel and Egg, and that's 11 o'clock Eastern time. So really fun, really innovative. Just one of many new hits that are hitting the platform. And as we get back to AI acceleration, I'll highlight for the first time ever, we're seeing primarily AI-created experiences coming Hit our top 20. So both a break in Steel and Egg and Hustle Valley hit the top 20, mostly created by AI. [00:03:15] S0: Dave, speaking of Halloween and with Steel and Egg, is it scary for the company that a game like Steel and Egg is basically half of the platform's current concurrent users? Like the scale of it is kind of wild, right? [00:03:31] S1: Yeah, that's not correct. It is not half of the concurrent users. And we do see hits constantly come and go on our platform and have a fair amount of concurrency. The distribution of games on our platform has never been healthier. And we see with our discovery system, roughly about 40% of the weekly top 100 games are created within the last three months. So if anything, the work we've done with discovery and highlighting well-retaining games is creating a stronger content platform.
00:03:31 · David Baszucki, S0
[00:03:31] S1: Yeah, that's not correct. It is not half of the concurrent users. And we do see hits constantly come and go on our platform and have a fair amount of concurrency. The distribution of games on our platform has never been healthier. And we see with our discovery system, roughly about 40% of the weekly top 100 games are created within the last three months. So if anything, the work we've done with discovery and highlighting well-retaining games is creating a stronger content platform. [00:04:07] S0: One of the things I've really enjoyed talking to you about is what life is like at Roblox. You and I have chatted about, on a Friday night, the GPUs being close to melting. Could you just talk a little bit about the behaviors on your platform right now when you guys are seeing the bursts of activity, when there is big weekend momentum relative to the midweek? I find that stuff really interesting data to follow. [00:04:33] S1: There's a lot of fun 24-7 action on our platform. I want to highlight we run a hybrid infrastructure. The vast majority of our infrastructure, we built our own, our own CPUs, our own GPUs. But we have great cloud partners. And in the midst, for example, of a peak on a Saturday, we mix our own infra with our cloud providers to support that growth. For our creators, they don't have to worry about it. They make amazing content and content drives their business. And they get that auto scaling as part of our platforms.