Craig Donato interview: How Roblox navigates brands, UGC, and the metaverse

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It’s a pivotal time for brands as they figure out how to navigate the metaverse. And one of the first places where they’re trying to do that is in the user-generated content (UGC) world of Roblox.

Should brands be more worried about what users might do with their brands? Or should they embrace the fact that players love them so much that they will go through enormous amounts of work to create video game homages to those brands?

Roblox has more than 50 million players a day. I talked about that and more with Craig Donato, chief business officer at Roblox, in a wide-ranging fireside chat at Stanford University Graduate School of Business AME x Gaming Clubs’ Future of the Arrts Media, and Entertainment Conference.

Donato took every question that I flung at him and he answered a bunch of questions from the audience as well. Donato has been at Roblox as CBO for more than five years, and before that he was at Next Door, QVC, Oodle, and Grand Central.

He was a grad of the Stanford University School of Business. I happen to be a UC Berkeley grad, an English major. But despite that old rivalry, we had a nice conversation.

Here’s an edited transcript of our interview.

Craig Donato is chief business officer at Roblox.

GamesBeat: Your title is the chief business officer at Roblox. I wonder if you could explain that. I don’t actually run into that title at every company I cover.

Craig Donato: It’s a bit of a catch-all title. At Roblox, it means the classic stuff, which is all the partnerships. It also involves the work we do to manage the different communities on Roblox. We have about 10 million people building on Roblox at any given time, so managing that developer community is part of it. All the moderation and safety infrastructure that goes to make sure people have a good experience on our platform, as well as the employee experience, talent acquisition, and those sorts of things. There are a lot of people building the platform. My job is to make sure the users of that platform are happy and successful.

GamesBeat: What are some big numbers when it comes to Roblox, milestones you’ve hit?

Donato: Our creator community earned about half a billion dollars last year. We have about 50 million people a day on the platform. The average time people spend is two to two and a half hours a day. It’s about 100 million hours a day across everyone on the platform. A lot of people spend a lot of time in Roblox.

GamesBeat: There’s a lot of interest and excitement and skepticism in the metaverse space. I wonder how much you’re leaning into the metaverse, while also trying to hold it off, in a sense?

Donato: I would say we’re all in, 100 percent. Roblox is not an overnight success. We’ve been around for about 15 years. The vision of our founder was something he called human co-experience: people doing things together in synchronous 3D spaces. I think people call that the metaverse now, but it’s always been what we focus on. A lot of people called us a game company, for years. We kind of bristled at that. We accepted it, but it’s not really what we were ever about. It’s creating a shared digital space for people to do things together.

We’re all in, though. I think it’s inevitable. A larger and larger percentage of people’s time is going to be spent doing things with other people in the digital space. It’s just inevitable. We’ve seen that over the years. It’s just going to accelerate.

GamesBeat: David Baszucki has also said that you’re creating a platform. You’re creating the infrastructure, but it’s your users that are creating the metaverse.

Donato: Fair enough. None of the content on our platform is produced by Roblox. All the experiences, all the gear, all the avatars, anything that you can buy is produced by the people, our creators. That forces us–one thing that we’ve been very passionate about as a community-driven company, as a platform, we’re only successful if your community is successful. We need to figure out how to incentivize them and make them successful with the tools we provide.

GamesBeat: What is the business model that’s gotten you to where you are, and what do you think will matter more as we head forward?

Donato: Right now our business model is based entirely on microtransactions. It’s thematic to a lot of web3 types of principles, even though it’s not on the blockchain. We have our own currency. People buy that and can spend it on gear and any new experiences on our platform. Once they buy that gear they take it with them from experience to experience. The creators on our platform not only create an experience, but they can mint items. Those can be sold and traded. We simply float that economy. We sell the currency and take a cut of transactions on our platform. That’s worked quite well for us. Years ago we had advertising, and we eventually pulled the advertising down from our platform because the microtransaction model is so effective.

GamesBeat: How big or small are the teams working on Roblox experiences?

Craig Donato of Roblox talks with Dean Takahashi at Stanford.

Donato: The top creators have teams of 40 or 50 people. It’s a long tail. You have smaller teams of two or three, all the way down. What’s fascinating, though, and I alluded to this earlier, is that it’s a fluid community. We have a community where creators come in. We have creators who are designers, artists, musicians, and businesspeople. They dynamically form teams in our community. As studios, they produce an experience and then can reform into other teams. It’s an evolving landscape in terms of how those creators come together to create things. As I said, there are super big studios making multiple millions of dollars a month, down to people who are doing it as a hobby.

GamesBeat: How do you look at the metaverse as a singular ambition that one company can achieve versus this collective ambition?

Donato: I think it’ll be a bit of both. We talked a lot in the last session about interoperability. That’s something that tends to happen as markets get more mature. Right now we’re building all the scaffolding and infrastructure that needs to go around it. We’re absolutely game for interoperability. It’s not really the issue right now. It’s figuring out how to get everything to work together. Right now, at least in the immediate future, there will probably be multiple metaverse platforms that will then interoperate. Those boundaries will get increasingly blurry over time.

GamesBeat: It feels like you’re in a leadership position such that maybe you wouldn’t want an open metaverse.

Donato: Ultimately you want to create the biggest pie possible.

GamesBeat: As far as how far away we are from these things, like a real-time metaverse, something with low latency, instantaneous movement from one world to another–how far away is that?

Donato: It feels like it’s here. I agree with the last speaker. It’s not a technological problem. People can instantly jump from world to world in Roblox with their friends, carrying their gear together in 3D spaces. It’s pretty synchronous. We’ve done a lot to help with network latency. A lot of technology exists.

GamesBeat: You can’t jump from Roblox to Fortnite yet, though.

Donato: Not quite yet. Again, there are things like interoperability. But experiences will get more and more immersive. That’s where we’re at right now.

Sonic the Hedgehog is coming to Roblox.Sonic the Hedgehog has come to Roblox.

GamesBeat: We’re seeing so much investment in this space. One estimate said about $3 billion went into blockchain game startups last year. Right now blockchain games founders are bringing in more than half of the VC money that’s going into games. You’re not totally supporting blockchain yourselves, though. Do you want that VC money going into that ecosystem?

Donato: Philosophically, taking blockchain as an implementation detail out of the picture, we believe in decentralized creator communities. Ultimately we believe the metaverse as a phenomenon will be a community-driven phenomenon, a bottom-up phenomenon. We want to do whatever we can to enable that. In the future, do I expect us to be enabling things like NFTs? Absolutely. I don’t see why we wouldn’t do it. It’s a matter of, when is that–given the million things we need to do, how important is that? Is it super important right now? Not so much. It would be kind of buzzy if we did it. But in terms of product functionality for our users, we’ll see. But we’re not philosophically opposed to it at all, to the extent that it creates more value, that it lets creators come together in more interesting ways to provide value to users.

GamesBeat: Some hardcore gamers have reacted poorly to things like Ubisoft’s implementation of NFTs in Ghost Recon: Breakpoint. Different companies have stopped doing them or walked their NFT plans back. I can’t tell right now whether gamers absolutely hate blockchain forever, or once they try it, they might like it. In your userbase, do you detect any particular leanings on the subject?

Donato: We find that people like to buy things. They like to be able to retain them and take them from experience to experience. We find that people like to trade things. For example, some of the bags Gucci sold, virtual representations of their physical bags, they sold for more than the actual bag. Weird things happen. Trading, buying, holding inventory, collectibles, all that stuff is very powerful. We see a lot of demand on our platform. Some of the items on our platforms cost $50-60-70,000. It’s kind of crazy. But yeah, I think it will happen.

GamesBeat: We’ve started seeing a lot of brands coming to Roblox. How do you view your relationships with brands compared to your relationships with users and user-generated content?

Donato: We think of brands as creators on our platform. They have the same roles as everyone else. Ultimately we’re focused on a number of different verticals: fashion, music and video entertainment, sports, and education. A number of verticals. Part of the work there was trying to figure out how experiences in those verticals become transformational in the metaverse.

As part of that, figuring things out with brands that are big in those areas and trying to do some experiments with them, thinking about how their brand could be represented in our platform–let’s take Nike for an example. Nike is an interesting company in that they’re very much a leader in experiential retail. You go to those superstores in New York and they’re very much built around, “How do I want consumers to engage with my brand in an experiential way?” How could that work in the metaverse? What could that mean? Another example would be Vans. We had a chance to work with them. What, to them, would be an experiential way to interact with them? They started as a skate company. We went to their founders, and they created an experiential 3D skatepark.

It’s been fascinating to see all this unfold. Fashion brands are trying to figure out what it means to be fashionable in the metaverse. Education is one that’s near and dear to my heart. We work with a company called First Robotics that does robot competitions. Robot kits cost about a thousand bucks. They’re in the most affluent school districts. But they’re creating a virtual version of these robot kits that’s free. Any kid anywhere can learn to program a robot. Or how do we look at history? What if kids could not only study Rosa Parks, but they could be Rosa Parks on the bus that day? Or play the role of the bus driver or someone in the back of the bus?

How do we leverage these technologies to make them transformational? It’s similar to what we talked about with the concerts. How do we think about the way music is consumed? In the metaverse, what’s the experience such that it will be 10 times better than doing it in the real world? That’s the path we’re on, figuring out how vertical by vertical, to unlock this.

GamesBeat: The metaverse is considered a success, maybe if you need to have everything else represented there as well as games.

Donato: The metaverse is always about shared experience, about doing things with other people in the digital space. You need context. If you just put people in a blank room they’ll stand there and stare at each other. You need some sort of context to do something together. The most common way that happens today is in the gaming space. A lot of games on Roblox are just shared context. You’re on a desert island and you work together to survive a disaster. That’s one of our more popular games. Or building an amusement park together. They’re just shared context that enables people to interact together and have a good time. All of those things–you can quickly move beyond it, but our job is to enable creators to produce these shared experiences, these contexts for a shared experience.

24kGoldn is doing a concert experience in Roblox.24kGoldn is doing a concert experience in Roblox.

GamesBeat: Does it ever get complicated for you to work with brands? Because you can’t necessarily turn right around and make the things that they want to make. You have to match them up with developers.

Donato: Right. But ultimately how this is going to evolve in a lot of ways for brands is that this is almost going to seem for a lot of them like the next generation of social media. Years ago, in the early 2010s, brands would have to think about being on Instagram. They took a lot of pictures, built teams, and started figuring out the algorithms. Now they have social teams in-house. The same thing is happening on the metaverse side. Ad agencies and others are building infrastructure.

It requires a different set of competencies to figure out live operations and produce interactive content. A lot of that comes from the game industry. But we’re seeing brands try to figure this out. How do they create an interface that allows them to have an interactive experience with their fans or their customers? That will open up all sorts of experiences for retail engagement and other things. We’re just seeing this happen right now. If you read Ad Age and things like that, this is the topic. How do they figure out how to do this at scale?

GamesBeat: At scale, how do you keep up with the developers who might be disrespecting brands in their games? People who might be degrading the brands around them. You don’t necessarily control the user-generated content from developers completely. They can create what they want, post what they want, and sometimes they’re not so respectful of brands.

Donato: If you look at the example of the early days of YouTube, there was liberal use of intellectual prpperty. When Squid Game came out and got hot, we saw a ton of Squid Game experiences on Roblox. It’s up to Netflix to decide what to do about that. Do they want to shut that down, or do they think it’s a great way for them to engage with their fans? They decided it was a great way to engage their fans, but it’s up to brands to understand what’s the appropriate way for people to use their IP in the metaverse. The last speaker talked about this. We work with a lot of brands, and the idea of creators taking their IP and using it is often a show of fandom. But it’s ultimately up to them to decide.

GamesBeat: Do you think we’ve hit the right balance yet as far as allowing users to do more?

Donato: I think we’re just in the early phases. Enabling brands to automate the way people can use their IP in new ways is just getting started. For example, when we launched the Scooby-Doo movie, or Warner Bros. did, one of our most popular games is Adopt Me, where you adopt pets. Scooby became one of those pets you could adopt. All these sorts of things, enabling that to happen at scale across multiple experiences are in the not-so-distant future.

GamesBeat: How do you balance the core market of kids and the expanding market elsewhere?

Donato: A couple of things I would say to go along with the last answer. What I would say is the metaverse is more generational than a lot of people suspect. I believe that there’s something called the metaverse generation, which is people in business school and younger, approximately. It’s people that grew up with interactive online gaming. I remember when my kids were younger and the iPad came out. I’d show them a magazine and they’d look at it and say, “It’s broken, right?”

Kids that grew up with interactive online gaming, based on our research, view reality differently than we do. I think of myself as a colonist of the metaverse, one of the old people. We see digital and physical reality as distinct from each other, and we see digital as less than physical. But this younger generation sees them as not only equal but as not separate. They live their lives both at the same time. They view it differently. They naturally socialize. They understand how to get around, and understand the social norms. They just see it differently.

For us, a lot of what we try to do is view the metaverse through their eyes. One of the reasons the metaverse idea took off during COVID is because older folks had to learn this. My son is 18. COVID was kind of a bummer for him, but not much of a disruption. So much of his life was already digital. It’s been a blessing that we started off as a kids’ platform. About half of our users are under 13.

Roblox is helping The Brit Awards throw a big party and musical experience.Roblox helped The Brit Awards throw a big party and musical experience.

What it’s also forced us to understand is–that there are two facets to a metaverse experience. One is that it’s highly immersive. Your mind’s eye goes into the experience. It feels like you’re inside it. And there’s a tremendous amount in the press today about how we’ll make it more immersive with VR. But I would say that’s not gating the adoption of the metaverse. Everything I can see is that all the people on Roblox feel like they’re in the experience already. It’s going to get better, but that’s not gating it. The second aspect of metaverse experiences is that they’re social. You do this with other people. This is the area that we’re furthest behind on.

The internet isn’t very human. You can have all sorts of rules, but that’s not dictating my behavior. If I don’t get up here and take all of my clothes off, it’s not because I’m worried the police will arrest me. There are social norms that dictate my behavior. There’s reputational impact. All this social signaling. That all impacts my behavior. Humans are social animals. When we’re talking to someone, looking them in the eye, and they’re nodding their head–we need to figure out how to bring those social signals to the metaverse. Otherwise, it’s going to be a bad, toxic place.

A lot of the work we’re focusing on and doing research on is how we can enable that to happen. For example, one thing we’ll be launching in the not-so-distant future is figuring out how to use a webcam to map the facial expressions of a person on their avatar. I can make a tree look a lot better. I can make the leaves much higher in their resolution. But it turns out that humans spend most of their time looking at people’s faces, the expressions in their eyes. I’m a lot less likely to be toxic to you if, when I say something, I can see that I hurt your feelings. It’s just human instinct. I don’t hear a lot about that, but I’d say that’s the area where we think–VR and AR are hot now, but those aren’t gating factors.

GamesBeat: How much faith do you put in AI? Is it going to be the answer to some of these topics like scale or monitoring things that need to be monitored?

Donato: There are three things we do to keep the community safe. First, we deploy an increasing amount of machine learning to track everything everybody is doing. It’s not only everything everyone is doing, but everything everyone is building. I can build a world on Roblox, and then I can put a timer on it. In two weeks I can make bad stuff happen. We need to make sure that we’re scanning not just what the assets are, but what the code can do. The ability to do moderation of user-generated content that’s problematic is incredibly complex. A tremendous amount of work goes into machine learning.

The second thing is we invest in a lot of humans. We have 1,500 employees, and we employ 5,000 moderators, just to review content. And the last, back to what we were talking about earlier, is how do you enable the community to self-moderate? If I’m in an experience and I don’t like what you’re doing, I can mute you. I can block you, so I never have to be part of a game server with you. Or I can report you.

We did a study a year ago where we asked our users, “Have you ever been bullied, and if you were, who did you report it to?” Parents were at like 17, which makes sense because nobody wants to get kicked off if that’s the primary way you socialize. Number one was Roblox, which was okay. The number two person was the bully. And that’s because they have the power. I can block them or mute them. But they confronted the bully. That was the number two thing. Again, it’s directionally good. There’s still a lot more work we can do. But figuring out what those constructs are for people to moderate, to be empowered to moderate their own behaviors, that’s the third leg of the stool.

GamesBeat: The metaverse sounds like a lot of content. I talked to Brendan Greene, who’s trying to build a brand-new world. He was saying that there’s a balance between his own game team’s design, user-generated content, and AI. But we’re talking about so much content that it’s impossible to fully author it ourselves. How do we get there?

Donato: One of the innovations that Roblox did is there was a relentless focus on removing the barriers to creating content on our platform. Not only did we give the tools away, but we hosted the content for free. We provide customer support. We translate it into five different languages. We automatically port it to all available platforms. It’s everything a 16-year-old needs to produce a game played by other people. Not just build it, but operate it at scale. And then our business model is such that we just take a cut of the back end. There’s no up-front cost. It’s all free.

Moreover, the publishing model is one where you can publish incrementally. If you look at a traditional game, you have to build the entire game. Then you need to market it. Then you see if you have a product-market fit. The up-front costs are huge compared to the approach where you let people throw something out there, see how everyone reacts, iterate, and then once it starts to go, you figure out ways to allow people to monetize it. Last year we launched something called engagement-based payouts. For creators who are early in their process and haven’t figured out monetization yet, how do we enable them to make money such that they can continue to fund development? It’s a tremendous amount of work to think about how we can remove all barriers to putting content on our platform.

We have people that build experiences on our platform. We have people who build tools for other creators that work on our platform. We have people who build assets. It’s a very complex creator ecosystem that we’ve spent the last 15 years building.

Alo Yoga's wellness experience in Roblox.Alo Yoga’s wellness experience in Roblox.

GamesBeat: Epic’s court battle with Apple raised the challenge of what’s a fair revenue share between platforms and creators. How do you think that’s going to evolve going forward?

Donato: Ultimately your revenue share will have to be justified by the value you provide. We’ll have to see. I don’t know if I want to make a statement on what I think of everyone’s revenue share, but you have to feel comfortable that you’re charging the right amount.

Question: You just mentioned a 16-year-old Roblox player. I’m sure you have plenty of 16-year-old Roblox players and tons of games that appeal to that market. But when I view your brand and please correct me if I’m wrong, it comes off as more of a kids’ brand, a kids’ game. How do you age up, if you feel like you need to, the perception of that brand?

Donato: Our fastest-growing age cohort is 17 to 24. That segment is growing the fastest. Roblox doesn’t really do traditional marketing. We grew entirely through organic network effects. One network effect is the UGC network effect. The more creators we have producing content, the more audience that attracts. The more audience is here, the more they build content. It’s this virtual loop. That’s paired with the social network effect. The number one way people come to Roblox is they’re invited to play because it’s more fun to play with your friends. Those things work in unison.

We then figure out–in terms of how we expand globally as well as age up, it’s through refining those loops to expand our audience. We make sure that as older users come to our platform, they’re being shown content that’s tailored for them. Creators suddenly realize that they can try to compete with everyone else producing content for 12-year-olds, or they can move to produce content for 18-year-olds, of which we have 20 or 30 million. They produce that, and that creates a feedback loop. Those people create the social network effect. Older people invite their friends. That’s happening. We watch those network effects. We watch those loops and try to steer them to create the business outcomes we want.

Question: You mentioned a lot about communication and how you want to model people’s facial expressions. How do you plan to do that in terms of tooling, since you’re already in a lower-poly environment, compared to something like Unreal Engine?

Donato: It’s becoming more and more realistic each day. We recently launched a new avatar system. We’ve been rolling out slowly, but we’ve introduced things like layered clothing, which requires huge skeletons. There’s a way of designing things that enable–there’s a couple of reasons. One is that it enables much more fidelity. You can have your character, your avatar look like anything you want. It could be Shrek or a classic Roblox figure. It can be anything you want. The second is it enables us to have what we think of as infinite combinatoriality, making sure that if I’m a creator and I build a jacket, that jacket can fit any size avatar. Then you can put a vest on top of a jacket and it all fits together.

This is important because there are different principles we have. We want the things we release–we think everybody should have a unique avatar. We want to make sure that all the pieces can be put together in unique ways. We’ve invested a lot into just making not only the faces work but in terms of the characters, really enabling anyone to embody who they are as an individual.

Question: The metaverse is a big trend, and also things like secondhand sales and creative upcycling. Do you see that as part of the metaverse in the future?

Donato: You can buy unique items, and people do trade them. It’s a part of what already happens on our platform. Gucci stuff gets traded pretty frequently. We work with a number of brands like Ralph Lauren and others. But on any given day I think something like 27 percent of people on the platform are updating their avatar. People change their avatars multiple times per week.

Question: One thing I’ve seen with a lot of new web3 and metaverse projects is that they’re run in the web browser. What do you think about running these things in the browser versus as a stand-alone client?

Donato: We have a client, a very thin client that you can download. Our games, for the most part, are streaming dynamically. We use a mixed client-server architecture. But you’re not downloading a big client. We’re streaming in parts dynamically. So you can very easily play Roblox on an iPhone 4, all the way up to an Oculus headset. We’re looking at framerates and everything dynamically depending on the type of device you have. That’s where the bar sits, is what I would say.

Roblox’s most popular games.

Question: Do you know what percentage of your users are on desktop versus mobile?

Donato: About half is mobile, and it varies from country to country. In Latin America, it’s a bit higher. But about half our use is on phones and other mobile devices.

Question: Do you have any numbers on how many VR users you have so far?

Donato: It’s a pretty small group. It’s very nascent. Some of the bigger VR experiences actually mix modes. There’s one experience where, if you’re on the VR headset, you’re a god, and all the other people running around are on 2D screens. That’s a lot of fun. But it’s pretty nascent right now.

Question: Given your background in social media, how do you see the combination of digitizing real-life communities versus creating entirely new communities online and the implications of that for things like cooperation and trust?

Donato: I’ll go back to something I said earlier about internet natives. I, as an old person, don’t think of someone I met entirely online–I don’t think of them as a friend. But that generation does. My son has people he considers his friends that he met playing Fortnite and Roblox. He knows them in and out. They hang out on Discord and all these sorts of things.

The notion of what community is, it’s starting to expand. Certainly, physical community does matter, but the lines are getting increasingly blurry depending on where people spend their time and where they socialize. For that generation, an increasingly large percentage of their social time is spent online, which is not necessarily bound by physical barriers. It’s going to get increasingly blurry, is what I would say.

Question: We heard a bit about how Unreal has influenced film production and some upcoming metaverse platforms. Machinima is already a familiar genre of user-generated content. How does Roblox think about user-generated content and the Roblox creator generation as regards things like scripted content in the style of film and TV?

Donato: We haven’t spent a ton of time on that. There are tons of people producing YouTube videos. That’s pretty big there. I’d say our focus is probably on the other end. How do we lower the bar to becoming a creator? Again, one of our principles is that we think the metaverse will be a community-driven phenomenon. We want to make sure that anyone can be a creator. Anyone should be able to design their own clothing, and build their own things. There’s a pretty high bar to creating an interactive experience, but as people get down to the level of producing gear, we want to make that easier and easier. Our focus is on not professional content, but on making a larger and larger percentage of our userbase also creators?

Question: Right now brands are building immersive worlds for the high-touch development experience. Is there an opportunity to introduce lower-touch things like digital billboards or other ways for brands to get in?

Donato: Generally brands do not start by building an interactive experience. The path they typically follow, and this is true of Gucci and others, is that they start by producing gear. In the case of a brand like the NFL, they start out by giving out helmets and football outfits. A lot of them then figure out how to integrate with existing experiences, like the Scooby-Doo example I mentioned earlier. And then the third step is a temporary or ephemeral experience. It doesn’t have a huge amount of depth, but it’s promotional in nature. Chipotle did it by giving away burritos for Halloween. Boo-ritos, you know? It was a short little thing. That’s pretty easy to build. It’s not expensive to build something with that kind of shelf life. And then they start to get serious about how they can build a persistent presence in the metaverse.

A lot of people go through that path. Occasionally, when we see them trying to skip a step, it doesn’t always work well. It’s a unique medium and they need to figure it out. We encourage people to kind of crawl, walk, and run, rather than trying to just jump in and run.

The Brit Awards will feature Pink Pantheress inside Roblox.The Brit Awards featured Pink Pantheress inside Roblox.

GamesBeat: Is that how you tell the difference between brands and native game developers on Roblox?

Donato: We typically–right now we matchmake brands to creators to help them figure out what works on our platform.

Question: How much of what is on Roblox would you say is a game, and how much would you say is more like a hangout?

Donato: Our head of developer relations, before he became our head of developer relations, he worked at Zynga and ran a development studio. He said, “I’m going to build a game on Roblox and I’m going to crush it, because I know everything about building games.” He showed us his plans, and we said, “Well, you need to have some other things. You need to have a lobby for people to hang out.” He said, “No, no, I know what I’m doing.” But it’s both. You need to have elements that enable people to come together and have a shared experience, but you also need to give them a place to hang out. It’s a bit of both.

I would say that if you’re thinking about a game is a place where you’re competing to win, very few Roblox experiences are like that. They’re almost all cooperative, shared experiences. You wake up in prison and you have to figure out how to break out, but you can choose if you’re a guard or a prisoner. But then once you’re that, you’re working together to try and achieve an end.

Question: What are some of the other opportunities or challenges facing brands in the metaverse over the long term, beyond treating it as a marketing vehicle?

Donato: It will vary based on the vertical. For fashion, again–my son’s ears are buzzing. I remember when my son was in high school. He spent more on his clothing for his avatars than he did on real-world clothing. His mom wasn’t happy about that. But that was what he was focused on. That’s where he was socializing with his friends. In the case of retail and fashion, thinking about it as a primary thing is one thing. For some brands, it’s potential exposure. For brands that might be in the sporting field or entertainment field, though, it’s thinking about how watching entertainment can be transformed. What if I could watch a football game, but I watch it from the point of view of any player on the field? How do we think about what’s possible, and then how do we enable that to happen? Vertical by vertical we need to think about what the use case is.

A lot of it right now is marketing. But I can imagine that in the not-so-distant future, retail will be revolutionized by the metaverse. Sometimes I don’t want to buy something on Amazon. I go to a store because I want to pick it up and I want to see it. I want to find out if it fits me. A lot of that will be things we can do in the metaverse. We can create avatars that have the same proportions as your body. We can allow you to look inside a product, take it apart, put it back together again, and understand it in ways you can’t on a flat website. As those things happen we’ll see the more direct response. We’re just in the very early phases of what the medium can do. But it needs to be conceptualized by each vertical.

The Roblox EDC front view.The Roblox EDC front view.

Question: Are there specific verticals or use cases where you see the cost of being able to provide an experience in the metaverse outweighing the desire to build in the space? Are there cases where it’s still best to just have that use case in the real world?

Donato: On our platform, it’s not that expensive to build, at least if you’re talking about an entry-level experience. That hasn’t been the gating factor. For $50,000, $100,000, $150,000, you can build a reasonable experience and see how it goes and start to learn more about it. It hasn’t been a cost thing. It’s more about figuring out what the right experience should be and how to engage an audience in the appropriate way. In the case of sports, there are startups that provide telemetry data already for things like the position of every player on the field and feed from cameras on their heads. People are going to come up with novel ways to attack these things. It’ll be interesting to see how it all unfolds.

GamesBeat: I’ve never been at a conference with so many questions. I guess the Stanford people are smart.

Donato: I think so.

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