Roblox’s China ambitions are in danger of going sideways

In July, online game company Roblox hired dancers in cosplay to perform at its opening ceremony in Shanghai, marking the beginning of its much-vaunted effort to dominate the Chinese market. Country. At the time, the company announced it would offer a “super digital” and “boundless world” to its new users.

Four months later, Roblox is struggling to make a foray in China, facing regulatory hurdles and stiff competition.

“Roblox has been very quiet about its opportunity in China,” said Neil Campling, head of technology research at Mirabaud Securities. He believes Beijing’s move in August to restrict youth play from 8 p.m. to 9 p.m. on Fridays, weekends and public holidays has affected the company’s growth plans.

Roblox’s partnership with Tencent Holdings, which allows the company to break into China, formed a key part of the prospectus for a blockbuster initial public offering in March. But the session The Chinese version of the platform, referred to by users as “Luobulesi”, is not included in the top 100 played games on the Chinese gaming portal TapTap at the time of publication.

David Baszucki, co-founder and chief executive officer of Roblox, told investors last week that the company was taking a “foresight” in China, “let’s take a look” in China.[ing] our head” in the face of regulatory challenges. The company declined to comment for this piece.

Roblox’s entry was further complicated by the decision to brand itself as an educational platform to appeal to Chinese parents, placing the company at a crossroads between the gaming and gaming industries. online education, both of which are subject to regulatory attacks.

“Roblox in China does not function as a social platform but is designed as an additional educational tool for schooling,” said Chenyu Cui, a games analyst at research firm Omdia. “Education has caught the eye of the authorities, so its future is uncertain.”

Despite experiencing explosive growth during the global pandemic as children spend more time at home, Luobulesi is fighting to gain traction against long-standing competitors in the Chinese market. . Roblox did not disclose how many of its 47.3 million daily active users globally come from China, but an investor presentation on Tuesday showed sparse usage in the mainland. .

“Roblox has yet to break out in the same way that Minecraft did when it launched in China,” said Daniel Ahmad, senior analyst at video game research firm Niko Partners. “Tencent will need to refine game operations and ramp up marketing efforts to drive player growth.”

Minecraft, has a sandbox game – a type of free-form game with fewer rules that encourages players to use their imagination – obtain According to research by Niko Partners, there are 60 million registered users three months after its launch in 2017. It now has more than 400 million registered users in China, where it is run by NetEase, according to research Research by Niko Partners.

Roblox presentation shows that in Asia usage is concentrated in Korea, Japan, Singapore, Philippines and Vietnam

Roblox presentation shows that in Asia usage is concentrated in Korea, Japan, Singapore, Philippines and Vietnam

Meanwhile, Roblox faces increasing competition from Reworld, a Chinese platform that also hosts user-made games on its platform. Reworld has attracted investment from TikTok owner ByteDance, as it turns to games to challenge Tencent’s dominance in the industry. The move sparked a bidding war between the two internet giants for independent game developers in China, which has cooled since the government tightened restrictions on games.

Roblox helps developers localize their games for new markets, offering translation services to “make it more engaging and appealing to a local audience,” said Craig Donato, sales manager. with investors on Tuesday.

But in China, developers face the added complexity of avoiding long laundry list prohibited material, including “no scary skeletons or zombies”, “discouraging minors to hate and drop out of school”, and no mention of Taiwan as a separate country. The Chinese version of the Roblox game includes safety features such as warning signs for players not to mimic avatars jumping from high platforms.

Oscar, who doesn’t want to share his last name, the creator of the game “Midnight Racing: Tokyo” that has been played more than 33 million times, decided not to create a version for mainland China because of local costs. highly censored and “strictly censored. greatly limits the creative possibilities of the developer”.

Ahmad also noted that Roblox’s user-generated content model is at greater risk of being penalized by regulators.

“Although many [the] censored features are common sense and are already part of the Roblox condition, a few problematic. Plus, there’s a risk the game could be taken down at any time,” Oscar said.

But James Onnen, the developer behind the Ragdoll Simulator game, said his team “had no problem localizing to China”. “We didn’t have to make a lot of changes. Our main audience is children, so censorship of corpses and drinking shouldn’t be an issue,” he said.

Roblox has not turned its back on China, market consists of 720 million gamers, but instead, they started discussing growth opportunities in Japan and Indonesia. “We are just getting started in Asia-Pacific,” said Donato.

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