Eurogamer interviews Roblox Studio head about the exploitation of child labor.

[ggx2ac]

Eurogamer source: https://www.eurogamer.net/roblox-st...-on-the-platform-isnt-exploitation-its-a-gift

The Eurogamer article is titled: "Roblox Studio boss: children making money on the platform isn't exploitation, it's a gift."

In an interview with Roblox Studio head Stefano Corazza at GDC in late March, where a new suite of AI-powered creation tools was demoed, I asked about the reputation Roblox hac gained and the notion that it was exploitative of young developers, since it takes a cut from work sometimes produced by children.

Read this quote:

"I don't know, you can say this for a lot of things, right?" Corazza said. "Like, you can say, 'Okay, we are exploiting, you know, child labour,' right? Or, you can say: we are offering people anywhere in the world the capability to get a job, and even like an income. So, I can be like 15 years old, in Indonesia, living in a slum, and then now, with just a laptop, I can create something, make money and then sustain my life.

Just think carefully about that for a moment. He is claiming that it's not child labor, he wants us to see it instead as an opportunity for people under the age of 18 in the Global South to make money using the laptop they seemingly had the money to afford and can make a living from by doing work in Roblox.

I'm sure there's a term for this, where a person who is not yet an adult does work. Hmm...

Moving on:

"There's always the flip side of that, when you go broad and democratised - and in this case, also with a younger audience," he continued. "I mean, our average game developer is in their 20s. But of course, there's people that are teenagers - and we have hired some teenagers that had millions of players on the platform.

"For them, you know, hearing from their experience, they didn't feel like they were exploited! They felt like, 'Oh my god, this was the biggest gift, all of a sudden I could create something, I had millions of users, I made so much money I could retire.' So I focus more on the amount of money that we distribute every year to creators, which is now getting close to like a billion dollars, which is phenomenal."

Now please ask the other children who weren't successful about whether or not they felt exploited. Of course, they may not know what exploitation is since there's a good chance they haven't learned about capitalism.

The PR person stepped in:

At this point the PR present during the interview added that "the vast majority of people that are earning money on Roblox are over the age of 18".

Nice save, so, how about not having the children do work then?

Moving on:

"And imagine like, the millions of kids that learn how to code every month," Corazza said. "We have millions of creators in Roblox Studio. They learn Lua scripting," a programming language, "which is pretty close to Python - you can get a job in the tech industry in the future, and be like, 'Hey, I'm a programmer,' right?

The barriers to get a job as a software engineer are much higher than knowing how to code in Lua, even just transferring your knowledge over to learning Python isn't enough.

Not to mention, getting into Software Engineering from the bottom as a Junior or even Intern is insanely difficult because so many people want to be a software engineer, some want to be a software engineer because they enjoy coding, but the majority want the career prospects and salary. People can't live on a low-wage job so what do they do? They look for the six-figure jobs and those jobs will only go to a handful of people.

That's all I am quoting from the article.

If you're familiar with my thread about the prosumer model, then you must have already seen the post I did regarding Roblox: https://www.installbaseforum.com/fo...part-4-rise-of-the-prosumers.2393/post-237686

If you don't know what the prosumer model is, then I recommend you go to that link and start reading from the first post.

Going back to the linked post from my prosumer model thread specifically about Roblox:

We have a number, at the end of 2022, Roblox Corp employs 1600 staff that do product and engineering roles.

At the end of September 2023, there were 5.6M creators that received payouts.

Edit: Payout refers to being paid in Robux in this instance.

A reminder, those 5.6M creators are not employees of Roblox Corp. They do not receive wages, they have to get a payout (Edit: Payout refers to being paid in Robux in this instance.) from Roblox. Here's another quote from that post quoting the docs from Roblox:

Millions of creators earn Robux on our platform, many of whom are hobbyists, with the median creator (creator ~7.5 million) earning 50 Robux and the average creator earning 13,500 Robux in 2022. As of December 2022, 11,000 of these creators were qualified and registered for our Developer Exchange program and cashed out to real-world currency.

A reminder that the median means the middle value in a sorted list. So that means from 7.5 million creators, if you stop at the 3.75th million creator, that creator made 50 Robux, and everyone below that creator either made the same amount or less than 50 Robux. 11,000 out of 7.5M creators in December 2022 cashed out their Robux for real-world currency.

Here's another reminder about how much Robux you need to be able to cash out from their docs:

30,000 Robux required to cash out through the Developer Exchange program

Now, have a read of this quote from their docs:

We are one of the biggest virtual economies¹​

In 2022 alone, we had more than 3.2 billion virtual transactions, and over 1 billion during the third quarter of 2023. In fact, Roblox's GDP² has grown to become as large as that of some countries. During the quarter ending September 2023, over 5.6M asset creators and developers who create experiences earned Robux. Our success is directly tied to the success of our creators. Roblox earns money by selling Robux which users spend in-experience and on items and assets in our marketplaces, all created by you.

1 Based on readily available public data for daily or monthly active users of virtual worlds
2 Defined as Roblox annual bookings, which measures total economic activity on our platform

Last part I am quoting from what I said in my post:

I forgot about their operational expenses.

Slide 19 has net cash provided by operating activities: $143.3M

If you go to page 32, it will have a slide that says Personnel Costs for the quarter ending in December 2023:

Infrastructure and trust & safety $25.5M
R&D $128.4M
General and Administrative $32M
Sales and Marketing $12.6M

Total Personnel Costs (excluding stock-based compensation) $198.6M

Remember that the Developer exchange fees was $221.8M

Of course, this doesn't tell us how many employees Roblox has and how many Prosumers there are.

Slide 30 gives the stock-based compensation for each of the departments mentioned, the total is $250M

Slide 28 says Payer Community and there are 15.9M monthly unique payers and they're spending an average of $23.65 each. This is talking about the people that spend robux.

Notice that the Developer exchange fees is slightly higher than their personnel costs. Those personnel also get stock-based compensation which is another $250M on top of their wages.

I already said earlier, Roblox has 1600 staff in product or engineering roles as of the end of 2022. There are 5.6M creators that received payouts. (Edit: Payout refers to being paid in Robux in this instance.) That is a ratio of 1 : 3500, for every 1 Roblox employee, there are 3500 creators that are not employees of the Roblox Corp that receive payouts. (Edit: Payout refers to being paid in Robux in this instance.)

Again, if you've read my prosumer model thread you can understand how millions of people doing work on your game without being employees saves you a lot on wages.

 

[Aostia82]

Again, if you've read my prosumer model thread you can understand how millions of people doing work on your game without being employees saves you a lot on wages.

thank you for your continued and precious contribution to this site

 

[Godzilla]

"I don't know, you can say this for a lot of things, right?" Corazza said. "Like, you can say, 'Okay, we are exploiting, you know, child labour,' right? Or, you can say: we are offering people anywhere in the world the capability to get a job, and even like an income. So, I can be like 15 years old, in Indonesia, living in a slum, and then now, with just a laptop, I can create something, make money and then sustain my life.

I can't believe someone would say this with a straight face, but you know... this is the state of the world. And people will call this dude a "Chad" or something because money is the only measure of success.

How is it made? who cares, IT'S MONEY!

This is wrong on so many levels.

 

[Gear-8a]

Hahaha the CEO is not even saying there isnt child labor, but that those kids are happy with being employed.

 

[Gimmick]

I don't get it, if you are gonna label this as child labor, then you gotta label everything from AI generation to garage band to making tiktok videos child labor. There are levels to how serious this is, and kids aren't doing this to make a living or support their families, it's a hobby.

Besides, this is not the biggest problem with Roblox, the biggest problem is that it's a giant microtransaction platform designed to trick kids into buying Roblux. I recommend people to try a few Roblox games, it's completely wild how exploitative it is, and I am shocked that it's legal and still going strong.

 

[ArkhamFantasy]

I can't believe someone would say this with a straight face, but you know... this is the state of the world. And people will call this dude a "Chad" or something because money is the only measure of success.

How is it made? who cares, IT'S MONEY!

This is wrong on so many levels.

I can’t believe a PR person was there and didn’t throw a smoke grenade to get him out of there before he finished that sentence, it’s mustache curling villain type of language.

 

[cw_sasuke]

In the end its business but i really hope that even with the Switch 2 Nintendo keeps Roblox away from their ecosystem.
Switch not having Roblox is another advantage for me when it comes to recommending the system as a childs first console.

 

[ggx2ac]

The Eurogamer article also made this reference which I didn't quote since it was regarding an old video that most people may have already seen:

It also remains controversial, as exemplified by People Make Games' accusation in 2021 that Roblox is "exploiting" young developers on the platform, with many of those developers under the age of 18.

The article they link to: https://www.eurogamer.net/roblox-exploiting-young-game-developers-new-investigation-reports

The YouTube video they're referring to:

 

[Pancracio17]

"I don't know, you can say this for a lot of things, right?" Corazza said. "Like, you can say, 'Okay, we are exploiting, you know, child labour,' right? Or, you can say: we are offering people anywhere in the world the capability to get a job, and even like an income. So, I can be like 15 years old, in Indonesia, living in a slum, and then now, with just a laptop, I can create something, make money and then sustain my life.

This fucking guy.

Roblox has always been one of the more explotaitive games out there. Im not surprised the head of the game gaslit himself into thinking its somehow good.

 

[ggx2ac]

Hahaha the CEO is not even saying there isnt child labor, but that those kids are happy with being employed.

This fucking guy.

Roblox has always been one of the more explotaitive games out there. Im not surprised the CEO gaslit himself into thinking its somehow good.

I'm just clarifying for you.

The CEO (and Founder) of Roblox Corp is David Baszucki.
Source: https://corp.roblox.com/people/

The person that Eurogamer interviewed is Stefano Corazza, the head of Roblox Studio. Roblox Studio refers to this: https://en.help.roblox.com/hc/en-us/articles/203313860-Roblox-Studio

Roblox Studio
Roblox Studio is the building tool of Roblox that helps you to create the places of your dreams. It provides Developers of different skill levels with a comprehensive and intricate set of tools, which allows for a sense of control and creative expression. Learn more and get started by reading the Setting Up Roblox Studio documentation.

 

[Djehuty]

Roblox is more problematic to children than any M rated game or basically any other game that exists, its one of very few that gets me going "you should never let your children touch it"

 

[ggx2ac]

I don't get it, if you are gonna label this as child labor, then you gotta label everything from AI generation to garage band to making tiktok videos child labor.

Welcome to capitalism!

Yes, there are many things we do now as consumers that we aren't aware of as doing work for a company without being employees of that company. Hence, the prosumer model.

If a child is producing something and a company makes a profit from the value of what was produced, then that child is doing child labor even if they're not an employee of that company.

In the case of Roblox, that child receives Robux and they can't cash it out for real money until they get at least 30,000 Robux. What might happen if the child doesn't get to 30,000 Robux? They might end up spending it on cosmetic DLC to change the appearance of their avatar.

As mentioned from the OP of what I quoted:

Slide 28 says Payer Community and there are 15.9M monthly unique payers and they're spending an average of $23.65 each. This is talking about the people that spend robux.

They converted the Robux to dollars so I don't know the conversion rate.

There are levels to how serious this is, and kids aren't doing this to make a living or support their families, it's a hobby.

Even as a hobby, the problem that some people see is that Roblox makes a profit off of that child doing work.

Besides, this is not the biggest problem with Roblox, the biggest problem is that it's a giant microtransaction platform designed to trick kids into buying Roblux. I recommend people to try a few Roblox games, it's completely wild how exploitative it is, and I am shocked that it's legal and still going strong.

I'll reference the second Roblox video from People Make Games titled "Roblox pressured us to delete our video. So we dug deeper." where I have timestamped it here for the section that talks about the Roblox Marketplace.

The microtransactions are crucial to how Roblox Corp makes money in the first place. That's why their company currently has a $23B market cap on the stock exchange.

What's important to point out here though is that it's the combination of one; creating a platform where the consumers also do the work of producing games or even assets, hence the prosumer model, two; the consumers are doing work to produce things on Roblox and they're even paying Roblox Corp to buy cosmetics from the Roblox Marketplace.

For anyone that hasn't seen the Roblox Marketplace, here is the link: https://www.roblox.com/catalog

 

[Pancracio17]

A prosumer model is not necessarily that bad, in practice it may not be that different than official modding. User generated content is not necessarily unethical.

However Roblox has more nuance to it. This is a company that explicitly markets this game and these tools for children. Any adult can be trusted to know that hes not getting much out of creating Roblox content, but kids? Theyre more exploitable.

 

[Thiefcoal]

How do you lose money with child labor?

 

[Lite_Agent]

This whole child labour thing reminds me of that "recent" phenomenon of parents monetising the hell out of their kids on YouTube with unboxing videos, toy "tests" and the likes. Or how people turned something apparently innocuous and wholesome at first (kids just having fun, being happy/surprised/delighted) into a full-fledged business, often at the expanse of the kid's well-being (with excessive amounts of videos per day/week), all the while pocketing all the money for themselves.

Adults can be truly horrible sometimes.

The Eurogamer article also made this reference which I didn't quote since it was regarding an old video that most people may have already seen:


The article they link to: https://www.eurogamer.net/roblox-exploiting-young-game-developers-new-investigation-reports

The YouTube video they're referring to:

Haven't seen that video (yet) but definitely going to check it out soon. I remember reading an article about dodgy Roblox stuff a while back about actual children being outright scammed by adult creators, tricking them into creating content for them and pocketing (virtually) all the money while being extremely abusing and stuff. Incredibly nasty : /

 

[Garlic]

That dude sounds like a Doctor Who filler villain, PR rep probably wanted to strangle him

Haven't seen that video (yet) but definitely going to check it out soon. I remember reading an article about dodgy Roblox stuff a while back about actual children being outright scammed by adult creators, tricking them into creating content for them and pocketing (virtually) all the money while being extremely abusing and stuff. Incredibly nasty : /

That article was probably based off their videos, People Make Games did some real vital journalism on this issue.

also thanks for these threads @ggx2ac, you've been killing it with quality editorials

 

[ggx2ac]

I'm just clarifying for you.

The CEO (and Founder) of Roblox Corp is David Baszucki.
Source: https://corp.roblox.com/people/

The person that Eurogamer interviewed is Stefano Corazza, the head of Roblox Studio. Roblox Studio refers to this: https://en.help.roblox.com/hc/en-us/articles/203313860-Roblox-Studio

Roblox Studio
Roblox Studio is the building tool of Roblox that helps you to create the places of your dreams. It provides Developers of different skill levels with a comprehensive and intricate set of tools, which allows for a sense of control and creative expression. Learn more and get started by reading the Setting Up Roblox Studio documentation.

I'm quoting myself here because it turns out that the media outlets can't even get this right. It's like that time where outlets didn't understand the difference between a trademark and a copyright for Elden Ring.

IGN had to post a correction on their article for incorrectly identifying the Roblox Studio head as the CEO of Roblox Corp: https://www.ign.com/articles/roblox-ceo-pay-to-earn-isnt-child-labor-its-a-gift

Correction: An earlier version of this article incorrectly called Stefano Corazza a CEO at Roblox. It has been updated with his correct title.

Rock Paper Shotgun incorrectly identified Roblox Studio as the company that shareholders earn their profits (economic rent) from. The shareholders make money from Roblox Corp: https://www.rockpapershotgun.com/roblox-studio-head-you-can-say-okay-we-are-exploiting-child-labour

This has long led to allegations that Roblox is exploiting child labour, generating value for Roblox Studio and its shareholders in the process.

PC Gamer incorrectly identifies the Roblox Studio head as an executive (I'll explain the difference) in their article title: https://www.pcgamer.com/gaming-indu...ut-would-prefer-you-saw-them-as-job-creators/

Roblox executive acknowledges 'you can say, okay, we are exploiting child labour,' but would prefer you saw them as job creators

The Verge not only incorrectly identified the Roblox Studio head as an executive in their title, but they also misidentified Roblox Studio in the title and first paragraph: https://www.theverge.com/2024/4/4/24121420/roblox-child-exploitation-robux-child-labor

Title:

Roblox executive says children making money on the platform is ‘a gift’ / In an interview with Eurogamer, Roblox’s studio head said the platform is life-changing for children who live in poverty.

In the first paragraph:

In a recent interview with Eurogamer, however, Roblox’s studio head, Stefano Corazza, said the platform has actually been a gift to the young developers who make money by creating games on the platform.

That's all the articles I spotted with different issues.

You're wondering whether Executive and Head are words that can be interchanged? No, they can't. They mean different things.

Stefano Corazza is the head of Roblox Studio, he is the head of a department/division. His duties would involve overseeing the operations of the department.

I've provided the link showing who the CEO of Roblox Corp is, you can see from that link who is on the Executive Managment, hint, if you go to this link which shows who the Board of Directors are: https://ir.roblox.com/governance/board-of-directors/default.aspx

Then there's another link on that page which says "Executive Management", click there and it takes you to the link I originally posted: https://corp.roblox.com/people/

There are 12 people in Executive Management positions and Stefano Corazza is not among them. Executives oversee more than individual departments, they have "broader responsibilities" that may involve the whole organization.

That's why you can't interchange Head with Executive.

 

[Megiddo]

11,000 out of 7.5M creators in December 2022 cashed out their Robux for real-world currency.

I already said earlier, Roblox has 1600 staff in product or engineering roles as of the end of 2022. There are 5.6M creators that received payouts. That is a ratio of 1 : 3500, for every 1 Roblox employee, there are 3500 creators that are not employees of the Roblox Corp that receive payouts.

I'm confused how 11,000 creators cashed out for real-world currency but 5.6 million received payouts. So for your ratio, wouldn't it make more sense to use the 11,000 number instead of the 5.6 million number (since you already established that the median earned by a creator was just 50 robux which I assume is not much since you need 30,000 to be able to get actual money)

 

[ggx2ac]

I'm confused how 11,000 creators cashed out for real-world currency but 5.6 million received payouts. So for your ratio, wouldn't it make more sense to use the 11,000 number instead of the 5.6 million number (since you already established that the median earned by a creator was just 50 robux which I assume is not much since you need 30,000 to be able to get actual money)

I had a feeling I wasn't clear enough in what I was saying.

As of September 2023, 5.6M creators earned Robux. Back in December 2022, 11,000 creators were able to cash out their Robux by converting it to real-world currency. Source: https://create.roblox.com/docs/production/earning-on-roblox

Those 5.6M creators are receiving payouts, but it's in Robux, not dollars. They have to earn at least 30,000 Robux to cash out the Robux to convert it to real-world currency.

The ratio still works, you have 1 Roblox employee who gets paid wages in real money for every 3500 creators that get paid in Robux.

I'll edit the post to make it clearer. Now you can see how it's literally a handful of creators that can actually make real money from Roblox while the majority are stuck with Robux until they get to 30,000 Robux.

In my post from my prosumer model thread I mentioned this:

next:

As a result, creators can focus on creating​

We are seeing healthy growth across creators and studios of varying sizes. Since 2020, the compounded annual growth rate (CAGR) of monetization for the 1000th creator (ranked by earnings) is almost three times that of the 10th ranked creator. And the 1000th creator earned USD 55,000 last year. As of December 2022, nearly 20% of our top 100 experiences and nearly 40% of our top 5000 experiences were also created in 2022.

If I am reading this right...

	#10 Creator	#100 Creator	#1,000 Creator
2022 average earnings	$6.1M	$939k	$55k
2020-2022 growth†	33%	47%	91%

† 2020-2022 CAGR; growth reflects annualized increase of Robux earnings from 2020 to 2022

They're really saying that the creator ranked number 10 by earnings made $6.1M because the quote above says their creator ranked 1,000 made $55k.

The source for that is still the link I just gave in this post: https://create.roblox.com/docs/production/earning-on-roblox

What is the top 10,000th creator on Roblox making? It doesn't say.

 

[ggx2ac]

If you have read every post I have made in this thread, you will start to notice the illusion is now visible.

Here's some trivia, the thread title I was originally going to go for was: "Eurogamer interviews Roblox Studio head, you won't believe"

I was originally going for that title because you won't believe I couldn't fit this quote into the thread title:

"I don't know, you can say this for a lot of things, right?" Corazza said. "Like, you can say, 'Okay, we are exploiting, you know, child labour,' right? Or, you can say: we are offering people anywhere in the world the capability to get a job, and even like an income. So, I can be like 15 years old, in Indonesia, living in a slum, and then now, with just a laptop, I can create something, make money and then sustain my life.

So, let's just go back to the last post I just wrote:

As of September 2023, 5.6M creators earned Robux. Back in December 2022, 11,000 creators were able to cash out their Robux by converting it to real-world currency. Source: https://create.roblox.com/docs/production/earning-on-roblox

Those 5.6M creators are receiving payouts, but it's in Robux, not dollars. They have to earn at least 30,000 Robux to cash out the Robux to convert it to real-world currency.

The ratio still works, you have 1 Roblox employee who gets paid wages in real money for every 3500 creators that get paid in Robux.

I'll edit the post to make it clearer. Now you can see how it's literally a handful of creators that can actually make real money from Roblox while the majority are stuck with Robux until they get to 30,000 Robux.

I said that it's "literally a handful of creators that can actually make real money". Let's put that into numbers.

11,000 creators were able to cash out their Robux for real-world currency out of 5.6M creators that earned Robux. That is approximately 1.96%. Approximately 1.96% of creators who get paid in Robux were able to cash out their Robux for real-world currency.

You're probably wondering about how Roblox Corp paid out $221.8M in Developer Exchange Fees for the quarter ending December 2023. Let's look at the details. Go back to this source: https://create.roblox.com/docs/production/earning-on-roblox

At one part of the page it says:

$1.1B developer earnings by 11,000 creators registered for our Developer Exchange program during 2021 and 2022, up 164% from the previous two-year period.

Notice, the URL they give in the quote leads to a 404-error page which they haven't updated the docs: https://create.roblox.com/dashboard/devex

Can you see what is being said in that quote? Only 11,000 creators are making real money, the Developer Exchange Fees they record on their earnings comes from the 11,000 creators that cash out their Robux for real-world currency.

Assuming that there are still 11,000 creators cashing out Robux for real-world currency, then let's do this calculation using the Developer Exchange Fees for the quarter ending December 2023:

$221.8M / 11,000 = $20,163

The average amount is approximately $20k each among the 11,000 creators. As we know though it's not distributed that way. Referencing again from my post in the prosumer model thread I mentioned this:

next:

As a result, creators can focus on creating​

We are seeing healthy growth across creators and studios of varying sizes. Since 2020, the compounded annual growth rate (CAGR) of monetization for the 1000th creator (ranked by earnings) is almost three times that of the 10th ranked creator. And the 1000th creator earned USD 55,000 last year. As of December 2022, nearly 20% of our top 100 experiences and nearly 40% of our top 5000 experiences were also created in 2022.

If I am reading this right...

	#10 Creator	#100 Creator	#1,000 Creator
2022 average earnings	$6.1M	$939k	$55k
2020-2022 growth†	33%	47%	91%

† 2020-2022 CAGR; growth reflects annualized increase of Robux earnings from 2020 to 2022

They're really saying that the creator ranked number 10 by earnings made $6.1M because the quote above says their creator ranked 1,000 made $55k.

The point of showing you all of this is, look at that quote again:

"I don't know, you can say this for a lot of things, right?" Corazza said. "Like, you can say, 'Okay, we are exploiting, you know, child labour,' right? Or, you can say: we are offering people anywhere in the world the capability to get a job, and even like an income. So, I can be like 15 years old, in Indonesia, living in a slum, and then now, with just a laptop, I can create something, make money and then sustain my life.

Look at this fantasy, the 15-year-old child from the Global South, "living in a slum" that seemingly has access to a laptop can make money to sustain their life.

Look at the reality, less than 2% out of 5.6M Roblox creators that get paid in Robux earn enough to cash out their Robux to convert it into real-world currency.

Don't be sold on the illusion that Roblox is bringing children out of poverty. Don't forget that less than 2% of Roblox creators have actually made real money by converting the Robux of which they need at least 30,000 Robux to convert it into real-world currency.

 

[Mekanos]

I was only vaguely aware of how kids are involved with Roblox but I had no idea it was this crazy. Saying "it's a gift" is a quote that should haunt him everywhere.

 

[Adventureracing]

It's crazy that he's not even really denying. I guess they know at this point that they can just get away with it. What roblox is doing should be illegal.

 

[Luke88]

But of course, there's people that are teenagers - and we have hired some teenagers that had millions of players on the platform.


"For them, you know, hearing from their experience, they didn't feel like they were exploited! They felt like, 'Oh my god, this was the biggest gift, all of a sudden I could create something, I had millions of users, I made so much money I could retire.' So I focus more on the amount of money that we distribute every year to creators, which is now getting close to like a billion dollars, which is phenomenal."

This is one of the most egregious cherry pickings I've ever seen, not only is he bringing up only the rare case of teens who found success, ignoring all those who poured hours of labour in Roblox without seeing any return, but he's also bragging that they're paying almost 1B dollars to creators when the revenue from Roblox far, far higher, just emphasizing how exploitative their splits are.

 

[Lite_Agent]

That article was probably based off their videos, People Make Games did some real vital journalism on this issue.

Not sure, it was a different set of issues. The article what about individual creators/groups doing the dodgy stuff, not Roblox itself.

But I just saw there's a second video on the issue, so I will have to watch that one too.

 

[AViewtifulMind]

What's the conversion rate between Robux and USD?

 

[Evilnemesis8]

Starcraft/Warcraft 3 walked, Minecraft ran and Roblox is flying. Speaking about User Generated Content that keeps your game relevant culturally relevant for an absurd amount of time, of course.

Shame this is off the back of incredibly dubious ethics.

 

[Lite_Agent]

What's the conversion rate between Robux and USD?

From that People Make Game video (not sure how up to date this is):

Yes, the exchange rate is significantly lower when you try to transfer the money into $$$.

 

[ggx2ac]

What's the conversion rate between Robux and USD?

Source: https://en.help.roblox.com/hc/en-us...-Developer-Exchange-Help-and-Information-Page

Roblox page name: Developer Exchange – Help and Information Page

Here, it tells you the conditions of how to Cash Out your Robux for US dollars including that you need to be at least 13 years of age:

How to Cash Out​

If you (a user of Roblox who is 13 years of age or older) have the requisite minimum amount of Robux in your account (as set out in the DevEx Terms), you will be presented with an option to exchange your Robux for U.S. dollars at the then current exchange rate set by Roblox ("Cash Out"). That option to Cash Out will be presented as a "Cash Out" button on your account page. To initiate a Cash Out request, click the "Cash Out" button and enter all requested information: full name, email address, and Roblox password. Once done, enter in the Robux amount you would like to cash out, and signify your continued agreement to the Terms and Conditions by clicking the associated check-box, and click the blue "Cash Out" button. We will then review the request.

If your request is approved, and if this is your first time cashing out, you will receive an email inviting you to create an account on our DevEx portal. You will be prompted to enter your information at account creation. Please make sure your information is entered accurately into the DevEx portal, and is kept up to date at all times. The information you provide is used to ensure all payments comply with applicable laws and regulations. Inaccuracies in information provided could impact your payment.

Here is the exchange rate:

Exchange Rate​

Rates. The following exchange rates will apply to DevEx. Please note that for anyone who has earned Robux prior to March 1, 2017, each rate below might apply to a different part of your holdings.

• New Rate. $.0035/R$ (which comes out to $105 USD for 30,000 Robux). This rate applies to all Robux earned on or after March 1, 2017.
• Old Rate. $.0025/R$ (which comes out to $75 USD for 30,000 Robux). This rate applies to all Robux earned before March 1, 2017.

So, it has already told you that 30,000 Robux is worth $105. That is the minimum amount of real money that you can make.

Let's pretend you had 1M Robux, it's a very simple calculation:

1,000,000 Robux * 0.0035 Conversion rate to USD = $3,500

Let's do another calculation, the quote from one of my posts where the creator ranked #10 made $6.1M:

$6,100,000 / 0.0035 Convert back to Robux = 1,742,857,142 Robux

If you're bad at mathematics, it's just a simple re-arrangement of the equation. You can take that Robux amount and convert it to USD and you'll get $6.099M because I had rounded the Robux.

The point is, that number #10 creator had to get 1.7B Robux to covert it into $6M.

Lastly, remember this part of my post from the OP:

A reminder that the median means the middle value in a sorted list. So that means from 7.5 million creators, if you stop at the 3.75th million creator, that creator made 50 Robux, and everyone below that creator either made the same amount or less than 50 Robux.

How much is 50 Robux worth?

50 Robux * 0.0035 Conversion rate to USD = $0.175

50 Robux is worth 17.5 cents.

From that People Make Game video (not sure how up to date this is):

See above, the conversion rate is the same (because the video was from 2021). The only change was the minimum amount needed to cash out, it was reduced from 100,000 Robux to 30,000 Robux.

 

[AViewtifulMind]

Source: https://en.help.roblox.com/hc/en-us...-Developer-Exchange-Help-and-Information-Page

Roblox page name: Developer Exchange – Help and Information Page

Here, it tells you the conditions of how to Cash Out your Robux for US dollars including that you need to be at least 13 years of age:


Here is the exchange rate:


So, it has already told you that 30,000 Robux is worth $105. That is the minimum amount of real money that you can make.

Let's pretend you had 1M Robux, it's a very simple calculation:

1,000,000 Robux * 0.0035 Conversion rate to USD = $3,500

Let's do another calculation, the quote from one of my posts where the creator ranked #10 made $6.1M:

$6,100,000 / 0.0035 Convert back to Robux = 1,742,857,142 Robux

If you're bad at mathematics, it's just a simple re-arrangement of the equation. You can take that Robux amount and convert it to USD and you'll get $6.099M because I had rounded the Robux.

The point is, that number #10 creator had to get 1.7B Robux to covert it into $6M.

Lastly, remember this part of my post from the OP:


How much is 50 Robux worth?

50 Robux * 0.0035 Conversion rate to USD = $0.175

50 Robux is worth 17.5 cents.

I am not surprised that it is this bad. Already an uphill battle to earn a mere $100.

But the lucky few who make it near the top enter a positive feedback loop where their popularity begets further popularity. It's just like with content creators on Youtube or social media. Millions try to earn money from it, only few succeed and even fewer lucky ones get real rich.

 

[ggx2ac]

Now that you've seen the conversion rate of Robux to USD for the Developer Exchange program which is currently at 0.35% and hence 30,000 Robux is worth $105.

You're probably wondering about what the conversion rate is when you are buying Robux as a consumer.

Here's the page to buy Robux as a consumer: https://www.roblox.com/upgrades/robux

Here it is, as a table. There are two methods to buy Robux, through a subscription or purchasing it normally:

Price (USD)	Robux	Conversion Rate (%)	Robux per month (If paying a subscription to get Robux)	Robux Subscription Conversion Rate (%)
$4.99	400	1.2475%	450	1.11088%
$9.99	800	1.24875%	1,000	0.9999%
$19.99	1,700	1.17588%	2,200	0.90863%
$49.99	4,500	1.11088%	Not Available	N/A
$99.99	10,000	0.9999%	Not Available	N/A
$199.99	22,500	0.888844%	Not Available	N/A

In case you do not understand what the conversion rate percentage decreasing at higher prices means. It's very simple, the more money you give to the Roblox Corp, the more Robux they give you in exchange.

We can do the table again this time with ratios:

Price (USD)	Robux	Ratio	Robux per month (If paying a subscription to get Robux)	Robux Subscription Ratio
$4.99	400	1 : 80.16	450	1 : 90.2
$9.99	800	1 : 80.08	1,000	1 : 100.1
$19.99	1,700	1 : 85.04	2,200	1 : 110.06
$49.99	4,500	1 : 90.02	Not Available	N/A
$99.99	10,000	1 : 100.01	Not Available	N/A
$199.99	22,500	1 : 112.51	Not Available	N/A

Easier to see now, when you buy the $99.99 package, you get 100 Robux for every dollar spent. When you get the $4.99 package, you only get 80 Robux for every dollar spent.

The point is, your Robux are worth less when you are working as a Roblox Creator trying to convert your Robux to USD. I know what's going to get brought up, Roblox pays for the tools and servers that you use for free as a creator.

Go to the link I've been posting a lot in this thread: https://create.roblox.com/docs/production/earning-on-roblox

At that link, go down to the following section:

Average Cash Payouts​

Our goal is to drive as much money to our creators as possible while maintaining reasonable margins for our company to develop, maintain, and improve the tools and technology that support our community.

On average, 75% of all spending in experiences supports or goes to developers:

• We pay out 46% to cover costs supporting experiences — like infrastructure hosting, storage, customer support, localization, payment processing, and moderation — which other platforms generally pass on to developers.
• This enables us to return 29%* directly to the developers.
• That leaves 25% to cover Roblox's ongoing services and operating costs, future-looking investments in the platform, and margins.

This chart illustrates the estimated utilization of each dollar spent in an experience on Roblox. Note that the chart doesn't reflect our expenses as disclosed in our GAAP financial statements.

24.5% Developer Share – Developer Exchange​

This percentage is the experience developer's earnings based on transactions in the experience, after cashing out through our Developer Exchange program (before any developer spending on the Roblox platform for services such as ads). Each developer's earnings share may differ.

4.4% Developer Share – Engagement-Based Payouts (EBP)​

Developers also get extra Robux for simply building an engaging experience through the Engagement-Based Payouts feature. Roblox calculates payout based on the share of time a Premium subscriber spends in your experience as a way to reward engaging experiences.
This percentage reflects our platform average, though the actual percent of earnings from EBP varies from experience to experience based on the engagement level in the experience.
We are a platform and therefore we do not make experiences that compete with our creators for these payouts.

22.3% App Stores & Payment Processing Fees​

Roblox covers this on your behalf. This reflects the processing payment fees related to all purchases and refunds of Robux. These fees are paid directly to Apple (iOS), Google and Amazon (Android), and Microsoft (Xbox and Microsoft Store).
These costs also include processing fees associated with other payment methods, such as credit card or PayPal, as well as costs associated with the sale of our prepaid cards.
If you developed outside of Roblox, you may have to cover these fees on your own and manage chargebacks and fraud and process refunds.

23.8% Platform Hosting & Support​

Roblox covers this on your behalf. These costs relate to Roblox's maintenance of the servers that host all Roblox experiences, as well as platform-wide customer support, user and experience moderation, user acquisition, translation, and local compliance. If you develop outside of Roblox, you may have to pay for hosting, servers, moderation, and customer service on your own. You also have to dedicate time to managing these services; on Roblox you can focus on building your experience.

18.3% Platform Investment​

These costs relate to future-looking investments in the Roblox platform. This includes investments in the people building out new capabilities and tools for our platform which will allow you to be more innovative, build more engaging experiences, help bring in new users, and make creating on Roblox much easier.

6.8% Roblox Share​

Roblox uses some of this to cover ongoing services and operating costs.

* 29% returned directly to the developers of experiences cents per dollar spent in experience assumes the full amount of Robux earned are exchanged through the DevEx program, and not spent on the platform. Figures are as of September 30, 2023.

The share the Developer gets for every $1 spent is 24.5% of it (or 28.9%). Roblox takes the rest and first pays off expenses but whatever remains is going to be a profit for Roblox Corp.

Edit: The Platform Investment and Roblox Share which adds up up 25.1% is what remains after all the expenses. They state this clearly at the beginning of the quote.

 

[AViewtifulMind]

I suppose your point is that Roblox Corporation has set up a system that yields enormous profits for little effort on their own part.

 

[ggx2ac]

I suppose your point is that Roblox Corporation has set up a system that yields enormous profits for little effort on their own part.

Not yet, they still haven't made an annual profit because they're still spending money essentially on R&D. As mentioned from the OP they spent around $128.4M on R&D for the quarter ending December 2023.

If they ever end up with a monopoly then the expected outcome when they've cornered the market is to reduce operating expenses to increase profit. When that happens you can expect to see R&D expenses going down, laying off workers that are no longer needed, etc.

What happens when a new competitor enters the field? Very simple, they acquire the competitor.

A recent example of that is Adobe when they tried to acquire Figma for $20B, it's obvious to anyone that they were getting rid of a competitor by buying them out. That's why Adobe ended up cancelling the acquisition thanks to the EU not approving of the acquisition.

 

[Bernd Lauert]

I disagree with the notion that this is child labor exploitation. It's missing the key component of the child effectively being forced into labor by adults. This is just kids sitting in their mom's basement trying to earn some pocket money.

 

[ggx2ac]

I disagree with the notion that this is child labor exploitation. It's missing the key component of the child effectively being forced into labor by adults. This is just kids sitting in their mom's basement trying to earn some pocket money.

Unless you're aware of the Marxist definition of Exploitation of Labour (I'm certain many people don't), then you'll think it means to coerce someone into doing work.

From the Wikipedia page:

Exploitation of labour - Wikipedia

en.m.wikipedia.org

This is from the section on surplus labour and labour theory of value:

In the Marxist critique of political economy, exploiters appropriate another's surplus labour, which is the amount of labour exceeding what is necessary for the reproduction of a worker's labour power and basic living conditions. In other terms, this entails the worker being able to maintain living conditions sufficient to be able to continue work. Marx does not attempt to tie this solely to capitalist institutions as he notes how historically, there are accounts of this appropriation of surplus labour in institutions with forced labour, like those based on slavery and feudal societies. However, the difference he emphasizes is the fact that when this appropriation of surplus labour occurs in societies like capitalist ones, it is occurring in institutions having abolished forced labour and resting on free labour.[3] This comes from Marx's labour theory of value which means that, for any commodity, the price (or wage) of labor power is determined by its cost of production—namely, the quantity of socially necessary labor time required to produce it.[1]

In a capitalist economy, workers are paid according to this value and value is the source of all wealth. Value is determined by a good's particular utility for an actor and if the good results from human activity, it must be understood as a product of concrete labour, qualitatively defined labour. Capitalists are able to purchase labour power from the workers, who can only bring their own labour power in the market. Once capitalists are able to pay the worker less than the value produced by their labour, surplus labour forms and this results in the capitalists' profits. This is what Marx meant by "surplus value", which he saw as "an exact expression for the degree of exploitation of labor-power by capital, or of the laborer by the capitalist".[10] This profit is used to pay for overhead and personal consumption by the capitalist, but was most importantly used to accelerate growth and thus promote a greater system of exploitation.[3]

You are correct in your observation that children are not being coerced into doing work for Roblox Corp.

However, that's not the exploitation of labour that I'm looking at here. The child does work of their free will but the Roblox Corp makes a profit off that work.

And considering the fact that you need to earn at least 30,000 Robux of which less than 2% of 5.6M creators that have earned at least that much in Robux to cash it out for real-world currency (30,000 Robux = $105 currently), it shows how you're expected to put in quite a bit of work to get your game inside Roblox to make money of which the Roblox Corp makes a profit off of.

 

[enpleinjour]

Now that you've seen the conversion rate of Robux to USD for the Developer Exchange program which is currently at 0.35% and hence 30,000 Robux is worth $105.

You're probably wondering about what the conversion rate is when you are buying Robux as a consumer.

Here's the page to buy Robux as a consumer: https://www.roblox.com/upgrades/robux

Here it is, as a table. There are two methods to buy Robux, through a subscription or purchasing it normally:

Price (USD)	Robux	Conversion Rate (%)	Robux per month (If paying a subscription to get Robux)	Robux Subscription Conversion Rate (%)
$4.99	400	1.2475%	450	1.11088%
$9.99	800	1.24875%	1,000	0.9999%
$19.99	1,700	1.17588%	2,200	0.90863%
$49.99	4,500	1.11088%	Not Available	N/A
$99.99	10,000	0.9999%	Not Available	N/A
$199.99	22,500	0.888844%	Not Available	N/A

In case you do not understand what the conversion rate percentage decreasing at higher prices means. It's very simple, the more money you give to the Roblox Corp, the more Robux they give you in exchange.

We can do the table again this time with ratios:

Price (USD)	Robux	Ratio	Robux per month (If paying a subscription to get Robux)	Robux Subscription Ratio
$4.99	400	1 : 80.16	450	1 : 90.2
$9.99	800	1 : 80.08	1,000	1 : 100.1
$19.99	1,700	1 : 85.04	2,200	1 : 110.06
$49.99	4,500	1 : 90.02	Not Available	N/A
$99.99	10,000	1 : 100.01	Not Available	N/A
$199.99	22,500	1 : 112.51	Not Available	N/A

Easier to see now, when you buy the $99.99 package, you get 100 Robux for every dollar spent. When you get the $4.99 package, you only get 80 Robux for every dollar spent.

The point is, your Robux are worth less when you are working as a Roblox Creator trying to convert your Robux to USD. I know what's going to get brought up, Roblox pays for the tools and servers that you use for free as a creator.

Go to the link I've been posting a lot in this thread: https://create.roblox.com/docs/production/earning-on-roblox

At that link, go down to the following section:


The share the Developer gets for every $1 spent is 24.5% of it (or 28.9%). Roblox takes the rest and first pays off expenses but whatever remains is going to be a profit for Roblox Corp.

Edit: The Platform Investment and Roblox Share which adds up up 25.1% is what remains after all the expenses. They state this clearly at the beginning of the quote.

Now this should be illegal.
How can they have a currency, the same currency right(?), but have two completely different floating values for it.
Wouldn't it be deception is say you can earn 1000 Robux when the rate is not the rate the customer knows from buying Robux?

Its disgusting that so much of the in game currency industry operates out of pure deception. If in game currency was banned (as it should be) and every spendable item was denoted in real money terms, i.e $, I bet so many people would reduce their spending.

Same with not being able to see total spend and not showing the gambling rates for lootboxes.

All 3 are gambling deceptions and are now employed en mass by $100B+ industry on children.

 

[AViewtifulMind]

Not yet, they still haven't made an annual profit because they're still spending money essentially on R&D. As mentioned from the OP they spent around $128.4M on R&D for the quarter ending December 2023.

If they ever end up with a monopoly then the expected outcome when they've cornered the market is to reduce operating expenses to increase profit. When that happens you can expect to see R&D expenses going down, laying off workers that are no longer needed, etc.

What happens when a new competitor enters the field? Very simple, they acquire the competitor.

A recent example of that is Adobe when they tried to acquire Figma for $20B, it's obvious to anyone that they were getting rid of a competitor by buying them out. That's why Adobe ended up cancelling the acquisition thanks to the EU not approving of the acquisition.

No annual profit yet? Is their ambition to copy the Amazon model of relying on investors until they can unleash the worst of capitalism?

 

[ggx2ac]

No annual profit yet? Is their ambition to copy the Amazon model of relying on investors until they can unleash the worst of capitalism?

As I mentioned in my Prosumer model thread, here's their earnings release for the quarter ending December 2023: https://ir.roblox.com/news/news-det...Full-Year-2023-Financial-Results/default.aspx

Fourth Quarter 2023 Financial, Operational, and Liquidity Highlights

• Revenue was $749.9 million, up 30% year-over-year.
• Bookings were $1,126.8 million, up 25% year-over-year.
• Net loss attributable to common stockholders was $323.7 million.
• Net cash provided by operating activities was $143.3 million, up 20% year-over-year.
• Average Daily Active Users (“DAUs”) were 71.5 million, up 22% year-over-year.
• Average monthly unique payers were 15.9 million, up 18% year-over-year, and average bookings per monthly unique payer was $23.65, up 6% year-over-year.
• Hours engaged were 15.5 billion, up 21% year-over-year.
• Average bookings per DAU was $15.75, up 3% year-over-year.
• Net liquidity was $2.2 billion; Covenant Adjusted EBITDA was $259.6 million, up 42% year-over-year.

Full Year 2023 Financial, Operational, and Liquidity Highlights

• Revenue was $2,799.3 million, up 26% year-over-year.
• Bookings were $3,520.8 million, up 23% year-over-year.
• Net loss attributable to common stockholders was $1,151.9 million.
• Net cash provided by operating activities was $458.2 million, up 24% year-over-year.
• DAUs were 68.4 million, up 22% year-over-year.
• Average monthly unique payers were 14.5 million, up 17% year-over-year, and average bookings per monthly unique payer was $81.05, up 4% year-over-year.
• Hours engaged were 60.0 billion, up 22% year-over-year.
• Average bookings per DAU was $51.50, flat year-over-year.
• Covenant Adjusted EBITDA was $431.7 million, up 21% year-over-year.

“We finished 2023 with another strong quarter of growth as we continue to drive innovation and new experiences across the Roblox platform. We enter 2024 with even more conviction of being able to achieve our long-term goal of attracting over 1 billion daily active users with optimism and civility. We continue to benefit from the strong network effects in content, social connection, and communication, as well as our investments in immersive experiences, advertising, and AI,” said David Baszucki, founder and CEO of Roblox.

“We ended the year with our strongest rate of quarterly bookings growth in two years and delivered our first quarter of $1 billion in bookings. We are scaling our operations efficiently, thereby improving our margins and cash flow, and we expect those trends to continue in 2024,” said Michael Guthrie, chief financial officer of Roblox.

They just want a monopoly that is similar to what other companies are trying to do with the Metaverse, having at least a billion daily active users on the platform.

 

[Kei_Kurono_1985]

I disagree with the notion that this is child labor exploitation. It's missing the key component of the child effectively being forced into labor by adults. This is just kids sitting in their mom's basement trying to earn some pocket money.

Even when it's not a bunch of kids being hit with a whip as we saw in some movies/TV shows or forced by their parents to work in a dangerous factory as it was in the late XIX's Century or in third world countries, Roblox is one of the poster childs of the "prosumers" model: Belive it's all fun and games, but actually you are doing an actual job.
And we can't understimate the explotative nature of the Robux (V-Bucks but WAY WORSE) and the dangers of strangers contacting underage kids in the game.

As a personal comment, I almost puke after reading this blattant proganda for one of the worst addiction: the ludopaty. This guy Stefano Corazza souds like a cartoon villain, or someone more belonging to a Zoolander movie. But it's a real CEO in the real life.

 

[Bernd Lauert]

Unless you're aware of the Marxist definition of Exploitation of Labour (I'm certain many people don't), then you'll think it means to coerce someone into doing work.

From the Wikipedia page:

Exploitation of labour - Wikipedia

en.m.wikipedia.org

This is from the section on surplus labour and labour theory of value:



You are correct in your observation that children are not being coerced into doing work for Roblox Corp.

However, that's not the exploitation of labour that I'm looking at here. The child does work of their free will but the Roblox Corp makes a profit off that work.

And considering the fact that you need to earn at least 30,000 Robux of which less than 2% of 5.6M creators that have earned at least that much in Robux to cash it out for real-world currency (30,000 Robux = $105 currently), it shows how you're expected to put in quite a bit of work to get your game inside Roblox to make money of which the Roblox Corp makes a profit off of.

I also disagree with Marx's notion that extracting the surplus value of labor is somehow exploitative. In this case, Roblox built the platform, so of course they should take a share of the value built by the "prosumer".

 

[ggx2ac]

I also disagree with Marx's notion that extracting the surplus value of labor is somehow exploitative.

I wanted to quote one more thing from that Wikipedia article:

Karl Marx's theory of exploitation has been described in the Stanford Encyclopedia of Philosophy as the most influential theory of exploitation. Marx described exploitation as the theft of economic power in all class-based societies, including capitalism, through the working class (or the proletariat, as Marx called them) being forced to sell their labour.

Why I bring that up is, there was a joke I wanted to make in one of my recent threads about Web3 gaming.

It's in reference to the Web3 play-to-earn game Axie Infinity. If no one has seen the game, I have timestamped here the relevant section from the video Line Goes Up by Folding Ideas.

Axie Infinity requires buying tokens to assemble a team of three axies. The tokens cost a lot of money so what has occurred is that there are essentially landlords or rather, the rentier. The rentier buys the tokens and lends them out to someone who essentially works for the rentier by farming SLP (Smooth Love Potions). The rentier takes apparently a 50% cut of the earnings by doing nothing except for lending out the tokens to someone that will do the work of farming SLP.

As the rentier accumulates wealth, he is able to buy more tokens and hence find more people who are willing to do labor in exchange for a 50% cut. You get a nice hierarchy where the rentier is at the top making money in his sleep while all those below him are doing all the work.

The hilarious thing is that if Axie Infinity was as popular as Roblox, gamers in the Global North would eventually recognize this exploitation of labor and, they would eventually connect the dots realizing this same thing happens at their low-wage jobs in real life where the owner of the company does no work, he just owns things and the laborer is the one that is providing the profit for the company but continues to struggle living with low-wages.

Those gamers would suddenly become the biggest socialists overnight. They would... rise up.

In this case, Roblox built the platform, so of course they should take a share of the value built by the "prosumer".

The problem is that these are not employees of the company, they do not get paid wages or have any employee benefits. They will do work but, they are not guaranteed that they will make money and I am going to say it again, less than 2% of 5.6M creators on Roblox have cashed out their Robux for real-world currency that requires getting at least 30,000 Robux which is worth $105 currently.

Roblox is like YouTube, they both run a prosumer model. They make money off of people doing work that are not employees of the company and those creators also consume the services to understand what people are playing/watching.

There are creators that have made millions of dollars on Roblox or YouTube but, those companies are making a profit of off those creators. If a creator is receiving millions of dollars, then that company is also making millions of dollars in profit off that creator.

It becomes very questionable to say that Roblox deserves a share of profits from something they intentionally designed where you can work in Roblox for money (Robux rather), but you are not an employee of the company.