For months, the kid-friendly title-turned-platform Roblox has been preparing to go public, and traders have been waiting to seize it since rumors began in 2020. In November of 2020, Roblox filed an S-1 with the SEC, which made the rumors official as it revealed multiple years of earning statements to possible investors.
Roblox is well-known among the younger generation as a platform for playing games crafted with tools that the company offers, offering a generally safe area for kids to work on social nuance and interconnectivity. It also can encourage children to become familiar with the widely-used Lua, which is the scripting language that Roblox uses to run their games. The sky is the limit within the title, released originally on September 1, 2006, and now it seems that the stars may be within reach as well.
Today, Roblox has finally gone public as a direct listing, allowing it to be openly traded within the market cap, opening at $64.60 before it shot upwards to $74.83 per share. It has since settled closer to $70 per share as the buying frenzy subsides. The company going public joins a multitude of others that have opted into public trading, with varying criticisms of the companies as they strive to make a return on investment for shareholders.
This often becomes the Achilles' heel for the companies that go public, and a large reason that Epic Games CEO Tim Sweeney shot down rumors of that company going public. It would limit the creative freedoms offered to Epic Games, as it would need to shift from designing consumer-first to profit-first, and the shift is noticeable by fans of the industry. Titles can become bloated with microtransactions, confusing monetization schemes, and feelings of being fodder more than patrons.
Alternatively, the move can also allow companies the financial ability to become an industry leader, and that option is sorely missing for children's play. Using invested monies, such as Roblox raising an additional $520 million prior to listing, can allow a company to grow its reach and offer new ways of play and interaction for the younger demographic. The growth of publically traded companies tends to coincide with the growth of the stock, which Roblox ultimately accepts responsibility for by becoming a publically traded company. The company recently announced that Roblox will begin to focus on older audiences, likely in its first maneuver of growth.
Ultimately, this is likely going to be the sticking point as Roblox enters into the trading market and strategies inevitably shift. This a crossroad for the company, to where it will need to decide if they're placing the interaction of children as a priority, or if it's the standard responsibility of minimizing expenses while attempting to maximize income for the benefit of the shareholders.
Roblox is available now for Mobile, PC, and Xbox.
Source: Gamasutra