Roblox, NFT Arts, and Metaverse
In case you have not experienced Roblox, an online game platform in which you can adopt virtual pets and children, even be adopted, in Adopt Me!, or lead your long-dreaming virtual idyllic life in Brookhaven RP, your 5th-grade cousin might be the best go-to person to learn the ropes. The statistics indicate more than half of its users are under age 13 and 44% are females, who spent 2.6 hours playing and socializing per day on Roblox, twice as much as on TikTok. The popularity and future sales potential in its user demographics drove the company to go public in NYSE on Wednesday under the ticker “RBLX” via a direct listing. It allows existing shareholders and retail traders to trade immediately after opening, instead of forging new shares in exchange for fresh capital and paying a lion’s share of the raised fund to investment bankers.
Several online game platform counterparts, i.e. Unity and Minecraft, have prevailed for a decade, but Roblox was still able to find its crack in the niche market, thanks to its leverage on the gig economy. Think of Roblox as Uber in gaming, where developers get paid through Roblox’s revenue sharing program. At least $10,000 has been paid to more than 1,250 developers in 2020 through virtual sales in their Roblox games. Two twin brothers and Roblox developers, Ben and Matt Horton, produced their first game at age 13. Their games have been played more than 100 million times and each of them earns $139,200 per year that helps them to pay off their parents’ house. Roblox even mints its digital currency, Robux, to facilitate the payment on the platform. Hence, the current success of Roblox can be largely attributed to its passionate developers’ community, in that such economic incentives have never been seen in Unity and Minecraft for amateur developers. It is also unimaginable what if Roblox steps further to enable mining Robux on a blockchain, given the recent rally in the cryptocurrency market.
However, you would miss the point if you merely define Roblox as a gaming company. The reason why Wall Street values Roblox’s worth as $45.3 billion roots in its broader vision of building a metaverse, a universe of virtual interconnected worlds demonstrated by movies like The Matrix and Ready Player One. My childhood déjà vu, The Sims, gets us an initial taste of hanging out in a virtual space, but metaverse commits to bridge all parallel virtual universes. The pandemic in 2020 apparently has accelerated human’s advance towards a metaverse, in which presumably everyone stays in their pod and communicates via Neurallink. That is why, for metaverse advocates, their virtual lives outweigh their lives in the physical world, and, more importantly, they are willing to pay for better images and properties in the metaverse. Such demand created an eco-system for trading digital assets and drove the sizzlingly hot NFT artworks’ price to skyrocket.
The logic behind the non-fungible token (NFT) art is reasonable. Since the digital art piece can be effortlessly duplicated, the core value of artworks, scarcity, has to be re-established by blockchain, in which digital artists transfer the ownership to the buyers. The artworks can still be copied, but the entire transaction history could be tracked on the Ethereum blockchain with help from smart contracts. Many minds were blown the other day when a lady asked in a clubhouse room if her foot is an NFT and a gentleman responded how much she wanted to get paid, even after knowing Jack Dorsey is selling his first tweet as an NFT for at least $2.5 million.
NFT is not brand new at all. An early adopter can be dated back to an online game called Cryptokitty on Ethereum in 2017. Collectors paid hundreds of thousands of dollars to rare crypto-kitties largely on speculation. Though these cats are barely worth pennies nowadays, the NFT in form of artworks has made a massive comeback in the finance world. Broadly speaking, every matter in our world, physical or virtual, can be tokenized as an NFT on blockchain and sold on the market as long as the consensus of scarcity confers value. The human nature of vanity makes them indistinguishable to buy a $69-million Beeple’s NFT art or a 1963 Ferrari 250 GTO by $70 million. On that, you can very likely expect to decorate your virtual gallery with valuable NFT arts and make your friends jealous in a foreseeable future.
Though it might not be convincing if Roblox, or any company existing, is the one to create such metaverse, the slim possibility of being so has created unlimited space for imagination in this future multi-trillion-dollar total addressable market driven by a radical social revolution.