All posts in “Software”

3 lessons from Roblox’s growth to gaming dominance

Our recently published EC-1 on Roblox recounts the origin story and growth prospects of the company. But there’s one more piece to the story: what Roblox’s impact will be on gaming and the broader startup industry, if the company manages to multiply its current 90 million users.

roblox maus 1

Sources: TechCrunch, VentureBeat, Roblox

We’ve distilled three key ideas out of the EC-1 — lessons that may apply not only to game developers and gaming entrepreneurs, but also to the broader startup industry.

Lesson 1: UGC is a missed opportunity in games

Roblox has shown that user-generated content (UGC) is a missed opportunity for much of the game industry. The company aspires, in a way, to be the YouTube of games. And it is succeeding, with 2 million experiences to date.

The game industry generally has two problems with UGC. One is the games themselves: AAA games today are too complex, and lack the flexibility and simplicity needed for robust UGC. Roblox shows that a simpler look and feel is a valid alternative to today’s super-sized, beautiful AAA games. (Minecraft proved much the same.)

The other problem is the greater complexity of making games than, say, videos or music. Roblox solved this problem by building its own game engine, which is designed solely to output Roblox-style experiences.

But increasingly, engines like Unity are capable of accomplishing similar feats: games are getting easier to build. It’s now possible that savvy entrepreneurs could build a platform like Roblox, without building an entire game engine.

Lesson 2: New opportunities in gaming are still coming

The game industry is infamously cyclical. New platforms emerge, become promising, then grow overcrowded and competitive. Usually, this cycle relates to hardware (the iPhone, virtual reality helmets, game consoles like the Nintendo Switch) or massive changes in consumer behavior (the emergence of Facebook, the early growth of the internet). But Roblox, a pure software play, shows that exceptions could exist.

It’s still early days. Roblox reported that it paid out $30 million to game developers in 2017, doubling to $60 million in 2018. Since Roblox keeps 65 percent of revenue from its games, that means it made around $230 million total in 2018. Its top 10 developers made about $2.5 million each. Seven of its games have also entered a “billion plays” club:

Adopt Me, a newer game, hit 440,000 concurrent users in June, a new record for the platform.

When a new platform appears, it’s usually found by amateur developers first. That’s certainly the case with Roblox: its successes are being created almost exclusively by first-time game developers in their teens and twenties. At some point, professional developers are likely to conclude they can do at least as well. The current market is particularly exciting because many games are fairly simple and lightweight — recent breakout hits like Camping 2 and Weight Lifting Simulator 3 are significantly smaller than comparable games on other platforms.

For entrepreneurs interested in creating new platforms or portals Roblox’s success as a combined game engine and self-contained platform also shows that opportunities still exist — if you have the patience to wait for them to mature.

Lesson 3: Patience can create amazing growth cycles

It took Roblox 15 years to grow to its current point. But most of that growth is recent: as seen in the chart above, Roblox experienced 10x growth in about 3 years, from 9 million users in February 2016 to 90 million in April 2019.

So what went into the decade or so during which Roblox was a much smaller platform? As we tell it in the origin story: a great deal of work, and very little paid acquisition.

In its early years, Roblox did buy users, to seed a user base while it worked on an impossibly large vision that included a game engine, platform, social features, a creator community, and its own games. But after a few years, it stopped buying users.

All of its growth since has been organic. That’s from two main sources: word of mouth, and YouTube users who watch one of the many Roblox streamers. Of course, any company can try to do the same. But Roblox had the patience to build a unique product — one which took years of work to even reach partial completion.

The key to it all was long-term adherence to a long-term goal: the creation of a new category, which it calls “human coexperience”. Today, Roblox still can’t be called part of a new category; it’s a game platform. But with more years of work, it may eventually get there.

For more on the Roblox story, see Part 1: The Origin Story, and Part 2: The Business Plan.

Waze now shows road toll prices along your driving route

Navigation app Waze is making getting to where you’re going even easier – or at least more transparent. A new feature rolling out today will show you any tolls along your route, including the actual amount you’re going to pay, across both the U.S. and Canada.

This is above and beyond what you’ll get in most navigation apps, where you might get a visual or text indicator that there is a toll on one of the roads in your path (and you can opt to avoid them if possible) but you won’t know what you’re actually paying. With Waze, you’ll get the amount – sourced from its community of user drivers, rather than direct from the official toll road operators, however, but Waze’s crowd-sourced navigation data often has a leg up on the official source in other cases.

Waze will show you the toll prices up front, too, before the navigation actually gets under way, which is great because that’s when you actually have the opportunity to do something about it, whether it’s scrounging seat cushion change or just choosing to drive a different way.

This will be rolling out beginning today, so keep an eye out if you’re trying to get somewhere in the U.S. or Canada.

Twitter returns after an hour-long outage

After an hour of sweet freedom, the world has been returned to the grasp of Twitter.

At about 2:50 pm ET, the desktop and mobile site were down, displaying a “Something is technically wrong” error. The app was also not working. The site returned at about 3:45 pm ET, but took a few minutes to regain full functionality.

Twitter’s status page said little more than it was an “active incident.” A spokesperson for Twitter confirmed the outage but referred us to the status page.

After the site returned, Twitter said it was because of an “internal configuration change,” which it has since rolled back.

It’s not the first time Twitter’s had a hiccup in the past few weeks. The social media giant was hit by a direct message outage earlier this month. In fact, between June and July, most of the major internet companies had some form of outage, knocking themselves or other sites offline in the process.

Please tweet about how it was down and how it’s hard to tweet about how Twitter’s down when it is itself down, and the irony therein.

We’ll patiently wait to hear from Twitter about the cause of the outage.

Devin Coldewey contributed.

Opera founded startup OPay raises $50M for mobile finance in Nigeria

OPay, an Africa-focused mobile payments startup founded by Norwegian browser company Opera, has raised $50 million in funding.

Lead investors include Sequoia China, IDG Capital and Source Code Capital. Opera also joined the round in the payments venture it created.

OPay will use the capital (which wasn’t given a stage designation) primarily to grow its digital finance business in Nigeria — Africa’s most populous nation and largest economy.

OPay will also support Opera’s growing commercial network in Nigeria, which includes motorcycle ride-hail app ORide and OFood delivery service.

Opera founded OPay in 2018 on the popularity of its internet search engine. Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.

Opera Opay NigeriaOn the payments side, OPay in Nigeria has scaled to 40,000 active agents and $5 million in transaction volume in 10 months.

The $50 million investment in OPay is more than just another big round in Africa. It has significance for the continent’s tech ecosystem on multiple levels.

To start, OPay’s raise tracks greater influence in African tech from China — whose engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities. OPay founder Opera was acquired in 2016 for $600 million by a consortium of Chinese investors, led by current Opera CEO Yahui Zhou.

The majority of the investment for OPay’s raise comes from Chinese funds and sources, including Source Code Capital, Sequoia China and GSR Ventures. There’s not a lot of statistical data on the value of Chinese VC investment in Africa, but a large portion of $50 million to a fintech venture stands out.

OPay’s VC haul also has significance vis-à-vis digital-finance in Nigeria. In tandem with other trends, it could support the shift of Nigeria surpassing Kenya as Africa’s digital payments leader. For years Kenya has outpaced Nigeria in P2P digital payments volumes and digital financial inclusion, largely due to the rapid adoption of mobile-money products, such as Safaricom’s M-Pesa.

Some of this is due in part to Nigeria’s Central Bank limiting the ability of non-banks (including telcos) to offer mobile payment services. The CBN eased many of those restrictions earlier this year. This opens the door for mobile operators like MTN, with the largest phone network in Nigeria, to offer mobile-money products. In addition to fintech regulatory improvements, there’s been a gradual increase in VC flowing to Nigerian payment ventures.

The country’s leading digital payment company, Paga, raised $10 million in 2018 to further expand its customer base that now tallies 13 million. OPay’s $50 million-backed commitment to grow mobile money in Nigeria should provide another big boost to digital-finance adoption across the country’s 190 million people.

And not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa. Part of the $50 million investment includes diversifying country and product offerings. “Geographic expansion of OPay and other services is a key part of our plans,” Opera CEO Yahui Zhou told TechCrunch via email.

This could place OPay and its Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent. It also could mean competition between Opera and Africa’s largest multi-service internet company, e-commerce unicorn Jumia.  

UnitedMasters releases iPhone app for DIY cross-service music distribution

Alphabet-backed UnitedMasters, the music label distribution startup and record label alternative that offers artists 100 percent ownership of everything they create, launched its iPhone app today.

The iPhone app works like the service they used to offer only via the web, giving artists the chance to upload their own tracks (from iCloud, Dropbox or directly from text messages), then distribute them to a full range of streaming music platforms, including Spotify, Apple Music, Tidal and more. In exchange for this distribution, as well as analytics on how your music is performing, UnitedMasters takes a 10% share on revenue generated by tracks it distributes, but artists retain full ownership of the content they create.

UnitedMasters also works with brand partners, including Bose, the NBA and AT&T, to place tracks in marketing use across the brand’s properties and distributed content. Music creators are paid out via PayPal once they connect their accounts, and they can also tie-in their social accounts for connecting their overall online presence with their music.

UnitedMasters

Using the app, artists can create entire releases by uploading not only music tracks but also high-quality cover art, and by entering information like whether any producers participated in the music creation, and whether the tracks contain any explicit lyrics. You can also specific an exact desired release date, and UnitedArtists will do its best to distribute across services on that day, pending content approvals.

UnitedMasters was founded by former Interscope Records president Steve Stoute, and also has funding from Andreessen Horwitz and 20th Century Fox. It’s aiming to serve a new generation of artists who are disenfranchised by the traditional label model, but seeking distribution through the services where listeners actually spend their time, and using the iPhone as manage the entire process definitely fits with serving that customer base.