Your children are making billions for these companies, and you're paying for it.
Free to play is never free, there's a premium on your kid's attention and gaming companies have found a way to unlock that value.
“More than 1 250 developers made at least $10 000 in 2020 through virtual sales in their Roblox games,” highlights CNBC in their roadmap charting the platform’s growth to a $30-billion company. That developer spend (money paid from Roblox to devs) represents a 200 percent increase from 2019 and represents only around 25 percent of what the company raked in through in-game purchases.
Roblox is a platform where players can find games to play. You can also upgrade your avatar using Robux, the in-game currency that costs actual money. There’s a monthly subscription plan that offers exclusive items and a Robux allowance. Developers earn Robux - which can be converted into cash - by creating items and games and then claim almost a third of the income the items generate.
RBLX entered the New York Stock Exchange with a suggested price of $45 and closed the day at $69,50, an impressive performance for the first direct listing of 2021. Goldman Sachs, Morgan Stanley and BofA Securities are advising the company on the listing.
For every Rand that Roblox earns on iOS and Android, 25 cents goes to Apple and Google. Robux and in-game purchases cost the same on all platforms, so the company is presumably taking the mobile app losses on the chin to not go the Fortnite route and get kicked out of the various app stores.
Epic Games has recently jumped onto the anti-Google train in Australia by initiating legal action against the search giant in that country’s federal court. Epic is arguing against the tax it needs to pay to Apple and Google for in-game purchases and launched its own marketplace. With around 90 percent of Android apps in Australia being downloaded from Google’s Play Store, Epic is also betting on a monopoly argument.
Fortnite is readying the sixth season of Chapter 2 that really saw the game find its stride out of the Mech chaos that closed out Chapter 1. The game can now be accused of catering to inexperienced players with the gold bar economy creating side quests and introducing more opportunities to get ahead, but it is a move that keeps the game accessible to new users.
Launching Fortnite Creative Mode was a masterstroke because the game is now breeding its next generation of developers on its own tools, similar to what Roblox is doing. Creative Mode is being updated to Unreal Engine 5 in 2021.
In many circles Minecraft is considered to be the natural competitor to Roblox, but Fortnite is competing for the same parent wallets and developing different revenue streams. Microsoft has built Minecraft into a powerhouse in the education space and grew its user base by 25 percent during the pandemic.
My read: My kids are on Minecraft and Lego City because I feel that those games don’t put as much of an emphasis on in-game purchases with crazy marketing drives. Roblox and Fortnite are free to play, so development costs need to be covered from other revenue streams.
Gaming is becoming more of a consumption activity and the true lesson being taught is how to use a credit card to buy progress instead of earning it. I remember having to run command code to play California Games back in the early 90s.
Consumer culture is pushed from a very young age and parents must be weary of the terms of the value transaction. I’m not comfortable with children’s content listing on the stock market.
Something you should know about:
Huawei is pushing forward with its smartphone strategy and will be unveiling the upcoming P50 shortly. P50 will be the company’s first device to launch with Harmony OS and not the Android-based EMUI software the company has built its brand on. On the hardware side we’re expecting a 1-inch camera sensor and a further evolution on the P-series design language, but the software is where things get interesting.
Huawei South Africa held a media session to introduce the new regional CEO and reaffirm its commitment to bringing premium mobile connectivity experiences to South Africans. Arstechnica described Harmony OS as having “no discernable difference” between it and Android which, once again, calls into question the brand’s honesty.
The local representatives were quick to point out that the new OS could come to our shores on a different device built by a different manufacturer before it reaches smartphones, which could signal the imminent arrival of Honor TVs. Honor was of course sold off to a consortium Shenzen Zhixin New Information Technology Co., Ltd.
A number that may only interest me:
The number of hours Sonos claims its new Roam portable wireless speaker can play music from a full charge. If you’re unfamiliar with Sonos, it’s an audio brand that specialises in connected speakers. The company is synonymous with multiroom audio, although Google sued the company for infringing on patents after Sonos first accused Google of the same. Roam syncs with the Sonos system over your home WiFi and can be used as a surround sound extension, plays audio over Bluetooth, connects to Google Assistant and Amazon’s Alexa, is water and dust resistant and is said to sound incredible. It’s almost too good to be true, but you can pre-order from takealot.com in April for R4 000.
A quote that seemed profound when I first heard/read it:
“I don’t do exams in my class because exams make for lazy teachers and students.” - Prof Bill Tucker
Context: I interviewed Prof Tucker, who is moving from UWC to University of Stellenbosch after 23 years of computer science lecturing, for a forthcoming issue of TECH magazine and he was commenting on the education system in South Africa. He relies on regular tests and quizzes which contribute to the final mark instead of concentrating on regurgitating information for one big exam at the end of the year. It’s a novel approach that has gained traction in a pandemic affected academic year.