Roblox: The "Metaverse" crypto always longed for
GC ALPHA 82
MARKET TALK
ROBLOX: THE ACTUAL “METAVERSE”
CT is being obsessed with game development on Roblox. Is this a bottom signal? Last week, Threadguy sparked the conversation about the gaming platform when his clip about the earnings of top developers went viral. So we’re talking about Roblox today and how it (somewhat) relates to crypto
If you’re not familiar with Roblox, here are some of its key stats from Q2 2025:
111.8M DAUs / 27.4B of hours played / $1.08B in revenue / ARPPU of $20.48
$1B+ in creator payouts in the whole of 2025, with the top 100 developers making ~$7M a year
Of course, mobile still trumps these numbers, but for a single platform, not a device category, the numbers are very impressive
It’s the largest and fastest-growing game platform in the world. Much larger than Fortnite, and even Steam
Gen Z is increasingly spending more time in Roblox, 144 min per day on average (more than YouTube and TikTok). There’s also this preconceived notion of “Roblox is only for kids”. However, its largest audience is in the 17 - 24-year-old category (players are aging with the platform)
Roblox is not “just a game”, but a digital playground and social space for these people (i.e., it’s not just gaming, but hanging out w/ friends). In a sense, replacing the physical places to meet friends that previous generations used to go to
So, how does this connect back to crypto? The Metaverse. Roblox has essentially achieved what crypto (or even Meta) never could. The game has an immense item economy with trading and items being central to it. Roblox has almost infinite content. There are millions of players online every day, and these players are increasingly “replacing” their real lives with identities that live online
All achieved without having anything to do with NFTs or tokens. Despite this, the CEO of Roblox did share that they would potentially add NFTs to the platform at some point in the future, back in November 2023
2+ years later, and nothing changed in this regard, so I think it is unlikely Roblox will ever integrate such features. Especially because of its user base and the fact that it will likely hurt their monetization
That’s not to say Roblox (devs) hasn’t introduced “soft gambling” to many kids through lootboxes, randomized rewards, betting, slots, etc., to monetize
Some of the metaverses that spun out of our little industry did achieve valuations close to Roblox (in terms of FDV), worth ~$52B, during the peak of 2021, like the Sandbox and Decentraland. However, as we know now, these companies were incredibly inflated
They were (and still largely are) empty worlds, without content, and unsurpisingly without players. So, even though the industry could offer a fairer revenue share system than Roblox, there’s simply no incentive for developers to build if there are no players and there’s no revenue
Similar to VR, which lacks good software, because there aren’t enough users for it, so developers aren’t incentivized enough to build on the platform
For context, post-fees (transaction fees and Robux to fiat conversions), developers only make 15 - 30% of player spend in revenue
While this discourse definitely led to more awareness of Roblox and the opportunities, it’s unlikely the average CT bro will be able to vibecode or build a successful experience on there
It’s a niche culture, which requires devs to be entrenched in the game to be successful. The barrier to entry is low, but the competition is incredibly fierce
What we might see is more crypto IPs porting over their experiences to the platform, like Sappy Seals, who’s found some success there:
Wab (founder of Sappy Seals): “We have kids becoming seal maxis through our Roblox games who then buy our plushies who then make posts on our forum about how much they love Sappy.”
INTERVIEW WITH ETHAN FROM AGV
A couple of months ago, we interviewed Ethan, a venture associate at Arbitrum Gaming Ventures (AGV), to talk about his views on crypto gaming. After finally getting through our backlog of interviews, we published our talk last week
Ethan has been in venture capital (in gaming) for the past couple of years, which gained him a unique perspective on this market, different from that of the typical gaming founder
Here are my favorite quotes and takeaways from our conversation:
AGV’s thesis of funding breakthroughs:
“…people would often equate a breakthrough with either achieving some very high player count or some revenue numbers […] these are components of it, but ultimately it’s about being able to change player behavior…”
Axie wasn’t only a breakthrough because of its astronomical valuation. It changed the behavior of players by turning gaming into a job (P2E). This can also be seen through the influences Axie has to this day (good and bad)
“The best products that came out of Web3 were able to blend fun and financials altogether very seamlessly […] My hope is…that would be in a manner where the blockchain is pretty much invisible, but an essential layer that traditional games could not do…”
The future of any crypto consumer product is “abstracting the abstraction”
Shifts in the market (today vs. 2 years ago):
“Before, a lot of the belief was that: let’s take our time to validate the product, and do a lot of internal testing before bringing it up. It seems that now, a lot of the mentality has been: ship fast, test very quickly, and iterate very quickly, so the moment they see signs of PMF, they’re doubling down. And the moment they’re not, they’re cutting it very quickly…”
Simply said, the industry moved from planning for success to discovering success by putting ideas to the test earlier on
Venture money drying up in crypto gaming:
“When you have billions of dollars invested and no big exits or success stories, it takes time for interest to return. […} my belief is when it’s kind of like peak fear, peak FUD, and when excitement has disappeared, that’s often when the best opportunities present themselves”
In short, VC cycles are downstream of sentiment cycles (i.e., if crypto gaming sees another bull cycle, we’ll likely see VC funding return as well)
“Gaming as a whole is still a fraction of people’s digital time. Of the top 200 mobile apps, just 18 are games. But if you look at the top 10,000 apps by DAU, nearly a quarter of those, 23%, are games”
From this perspective, gaming looks “small” at the top, but hides great strength (potential) in its long tail. Roblox proved that aggregating this tail can pull time away from social and video apps
What keeps you excited about this industry?
“Web3 always rewards novel ideas. And right now, when capital is scarce, if you’re a team that’s able to ship, this time allows you to focus on quality…”
I.e., during downcycles, scarcity filters for the best ideas, and actual innovation stands out fast
Macro challenges that blockchain can solve:
“When developers see […] hey, I’m building a product, and I’m building it on Web3, I can “make more money”. Because there’s more margin, it’s more efficient, it’s cheaper, I think that has to be the focus that blockchain can solve for gaming…”
What blockchain can solve, in Ethan’s example, reducing costs and improving margins, is maybe “boring”. However, use cases like these that improve existing models (like Bitcoin rewards) are probably the ones that have the most staying power
I encourage you to watch the interview with Ethan, because it’s a perspective we don’t get to see too often. Next week we’ll have on Arto, so stay tuned for that conversation
ON THE RISE
Pocket Knights was picked to launch as a Startale Superstar app on Soneium
Nifty Gateway announced that it’s shutting down on February 23
Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR + I will hold some of the assets mentioned in this newsletter.
Spot on. The metaverse isn't coming, it's already here and paying real mony.