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How Roblox and the metaverse are boosting businesses
Brand Protection
5 mins

How Roblox and the metaverse are boosting businesses

Table of Contents:

    The emergence of the metaverse was 2021’s biggest and most publicized technological announcement. 

    Ever since Facebook rebranded to Meta and announced its plans to create a social metaverse, other digital platforms began developing their versions of immersive online worlds.

    While these corporations are currently working on distinct metaverse initiatives, other companies have already succeeded in creating massively successful virtual communities. The popularity of  Roblox is a proof-of-concept of how the metaverse will work and how brands and businesses will benefit from it.

    In this guide, we explain:

    • What the Roblox metaverse is
    • How Brands use and make money on Roblox
    • Copyright infringement on Roblox
    • How Red Points can help businesses protect their brand on Roblox

    What is Roblox?

    Roblox is a popular online gaming platform that allows users to play and create games of their own. Roblox is not a game itself rather, it is a place where people can play games developed by gaming companies and other people.

    What sets Roblox apart from other gaming platforms is its game-creation feature. Unlike other distribution platforms, users can create (and earn revenue from) games on Roblox. 

    The Roblox Corporation does not take credit for the games developed on their platforms, and the IP rights to these games belong to their respective developers. There are over 40 million games on Roblox, and Roblox community game developers earned over $500 million on Roblox in 2021.

    How does Roblox make money?

    Roblox generates revenue by :

    •  Selling its virtual currency (Robux) to users
    •  Collecting monthly membership fees for access to Roblox Premium
    •  Collecting commission fees from successful developer transactions

    The primary revenue driver for Roblox is the platform’s proprietary currency (Robux).

    On the platform, it is possible to earn and spend Robux and convert your virtual coins into real-world fiat money.

    While most Roblox games are free to play, optional extras such as additional levels or game armor may be purchased for a small fee.

    For users, the best way to purchase Robux safely is through the official Roblox website and on its official app on other game consoles and operating systems.

    Creators can earn Robux by:

    • Selling games and upgrades
    • Paid participation systems
    • Developer-to-developer content and tool sales
    • Using the Avatar Market to market goods to customers

    Roblox gives the game’s creators 70% of the revenue from each sale and keeps the remaining 30% of the total as profit. However, for items that are sold in the Avatar Marketplace, creators get 30% of the sale while Roblox keeps the other 70%.

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    How brands make money on Roblox

    While the final details and specifics of what the metaverse is, aren’t quite settled yet, it is generally agreed by all that the metaverse will be a virtual interoperable online world where people will be able to socialize, learn and work using online avatars.

    Roblox has, right from inception, aimed to create an immersive social community for its users consistent across all its games (which it calls ‘experiences’).

    Roblox players have an online “avatar” that can move freely between various games on the platform. Roblox users can update and accessorize their avatars with new clothes, hair, and other fashion items. These fashion items are often bought using Roblox’s internal currency (Robux), and it is a major source of revenue for brands who sell their virtual merchandise (or ‘verch’) on the platform.

    Virtual merchandises are hugely popular on Roblox, and the platform has a growing number of brands and companies offering virtual products and creating experiences.

    Roblox generates revenue from user-generated content by facilitating the exchange of Robux (the platform’s virtual currency) for physical goods (purchased by users with real money) through in-game stores and the Avatar Market.

    In addition to selling virtual items, the three main ways brands are currently getting involved in Roblox are:

    • Adding themselves to already-existing experiences :

    Brands are leveraging their already established reputation to create online experiences that closely resemble existing Roblox games. In December 2021, Virtual Brand Group, a metaverse creative company, partnered with Forever 21 (owned by Authentic Brands Group) to build a fashion retail experience on Roblox.

    Created for Roblox users, fashion influencers, and creative world builders, players can buy and sell Forever 21 accessories and clothing, hire NPCs as employees, and customize their store as they compete to become the top shop.

    The experience has been frequented by many top Roblox influencers and has made millions of virtual Forever 21 fashion sales.

    • Creating limited virtual items and experiences :   

    During Chipotle’s 2021 Boorito Halloween event, the restaurant chain created its first virtual storefront on the gaming platform Roblox.

    The Halloween corn maze contained digital costumes and Roblox products. Chipotle rewarded the first 30,000 players who completed the maze and visited the in-game restaurant with a total of one million dollars worth of free burritos. 

    • Building branded worlds: 

    Nikeland was a pioneer in mainstream metaverse commerce. In its first two months online, the Roblox-based virtual world was visited by 7 million users from 224 countries.

    It did this by drawing on the experience of RTKFT, a metaverse agency that Nike had recently bought, in order to provide a gaming experience that was branded with the Nike name and, more importantly, gave consumers the ability to purchase virtual products from Nike itself.

    Nike’s digital earnings are 26% of its entire brand revenue, thanks in part to metaverse experiences.

    Roblox plans to expand its already-impressive metaverse offering by offering 3D immersive ads, bridging the gap between reputable brands and developers, and introducing other new features. The community has evolved into more than just an online hangout; it now offers resources for in-platform developers to turn their passion into a paying profession.

    Examples of infringement on Roblox 

    As previously stated, developers have full creative and intellectual property rights over any game they create on Roblox.  Roblox, as a platform, is bound under copyright laws. That means any game flagged under DMCA rights as a copyright violation must be removed.

    Roblox takes copyright infringement seriously. The platform has a team of over 2,000 moderators worldwide who review content uploaded to the platform and manually check anything flagged as inappropriate. Nevertheless, there are incidences where Roblox has been both the victim and possible culprit of copyright violations.

    In June 2022, game developer Christopher Boomer filed a DMCA subpoena application against Roblox for alleged copyright infringement.

    According to the application, certain Roblox creators pirated multiple popular games he developed and uploaded them to the Roblox platform.

    Although Roblox is currently contesting the DMCA request due to its “unreasonably broad requests,” it is instructive to note that Roblox has taken down some of the games mentioned in the subpoena.

    Roblox has also been on the receiving end of copyright infringement itself. In Aug 2022, Roblox filed a suit against doll maker Wowee Group Ltd, a Hong Kong-based toy company in Aug 2022 for unauthorized imitation of its Roblox avatars.   

    According to the suit, Roblox claims WowWee violated its terms of service and misappropriated the Roblox trademark to advertise My Avastars dolls. It also claimed that WowWee collaborated with a Roblox developer to sell codes that could be redeemed for virtual versions of the infringing dolls for use only on Roblox.

    In the complaint, Roblox describes itself as a platform where “experiences” (including games, events, and virtual locations) can be developed by third parties. Users can use their custom avatars to represent themselves in any experience they wish to explore on Roblox. 

    However, the terms of service for Roblox state that its intellectual property cannot be used outside of its platform without the company’s authorization.

    How can businesses protect their brand on Roblox?

    The above-mentioned cases provide insight into how intellectual property rights will be viewed in the ever-expanding world of the metaverse. These cases also show that, despite technological advancements, online piracy remains a problem, even in the metaverse. 

    Creators still bear the ultimate responsibility of copyrighting and protecting their content.

    For online brands and businesses looking to enter the Roblox metaverse, brand protection is critical and cannot be neglected.

    Request a demo to learn how to protect your business and its brand with Red Points’ Brand Protection software!

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