The Code Conference wrapped up a few days back, and we\u2019re bringing you the last of our interviews from the event. My friend and colleague, Verge<\/em> deputy editor Alex Heath, sat down to chat with Roblox CEO David Baszucki live onstage.<\/p>\n<\/div>\n Earlier this year, Roblox announced grand plans to build an audience of adults. You probably think of Roblox<\/em> as a kid thing \u2014 we reported in 2020 that half of all US kids under 16 had played it \u2014 but the last time David and Alex chatted, the company had big plans to change all that, and Alex asked how all of that was going.<\/p>\n<\/div>\n Listen to Decoder<\/em>, a show hosted by The Verge<\/em>\u2019s Nilay Patel about big ideas \u2014 and other problems.\u00a0Subscribe\u00a0here<\/a>!<\/p>\n<\/div>\n<\/div>\n<\/div>\n Roblox<\/em> is determined to be a platform, even more than a product \u2014 something users can develop games and experiences within. It sounds quite a lot like a metaverse idea, but you\u2019ll hear David say he doesn\u2019t particularly like using that term.\u00a0<\/p>\n<\/div>\n And of course, it was the Code Conference, so David and Alex talked about AI, which was a real theme of our show. David said support for AI is woven all through Roblox\u2019s business, starting with largely invisible functions like efficiency, translation, and safety. But he also sees a lot of opportunity for generative AI to help content creators on the Roblox<\/em> platform in the not-so-distant future.\u00a0<\/p>\n<\/div>\n Okay, this is a good one. David Baszucki, CEO of Roblox, live onstage at Code with Alex Heath. Here we go.\u00a0<\/p>\n<\/div>\n This transcript has been lightly edited for length and clarity.<\/em><\/p>\n<\/div>\n Please welcome to the stage the founder and CEO of Roblox, David Baszucki. <\/strong><\/p>\n<\/div>\n Thanks for doing this, Dave. You are fresh off of your annual developer conference, just two weeks ago in San Francisco. I watched the <\/strong>opening keynotes<\/strong><\/a>. It seemed like the biggest crowd reaction you got was PlayStation support actually. So I guess my first question is, what took so long?<\/strong><\/p>\n<\/div>\n It\u2019s a great question, and thank you for having me here. We\u2019ve put so much focus on mobile quality over the last couple years. It\u2019s our hugest market. We started as a PC product, went to Mac, and the vision of connecting people around the world on every platform has always been the vision. Mobile, we got into really good shape, Xbox in good shape, and then we started rolling out new platforms. As you can imagine, the creator community loves PlayStation because all of their existing creations are going to work there. So for all of these creators that are making a living and making new businesses, it\u2019s just an immediate expansion of their business.<\/p>\n<\/div>\n Was there anything unique about PlayStation from an economics or business partnership perspective that took time, or was it all technical?<\/strong><\/p>\n<\/div>\n Nothing too unique. I think every platform has been very thoughtful in when they start to allow social cross-platform everywhere. I think five or 10 years ago, when we started this notion, Xbox and PlayStation were arguably a little more walled garden-ish, but that vision of connecting and communicating in a 3D space no matter where you are with the best user interface, the best camera, the best motion, whether it\u2019s a phone or a console, I think has really come to bear right now.<\/p>\n<\/div>\n There\u2019s a lot of product, big-picture stuff I want to get into \u2014 AI, etc. First, though, I want to touch quickly on <\/strong>the layoffs<\/strong><\/a> that you guys recently did in your recruiting division.<\/strong><\/p>\n<\/div>\n I think you had not done layoffs during the pandemic, am I correct?<\/strong><\/p>\n<\/div>\n We actually are continuing to hire. We\u2019ve never done layoffs. One thing I think you can see, though, is probably in Q1 of 2023, we were growing our headcount at 50 percent a year, which is very rapid, and that requires a very, very large recruiting team. We\u2019ve committed and we\u2019ve shared the notion that over next year, our bookings are going to grow faster than our headcount, so our headcount growth is probably not going to be 50 percent next year.<\/p>\n<\/div>\n So that doesn\u2019t say anything bigger about the state of your business?<\/strong><\/p>\n<\/div>\n No, absolutely not. I think we\u2019ve done this amazing job of just continuing to grow steadily through all of this over the last two years.<\/p>\n<\/div>\n Let\u2019s talk about aging up the platform. So you have been making this big push to get people above 17 on the platform with exclusive experiences. You\u2019re verifying identity with ID. It\u2019s relatively new. You\u2019re only, I think, a couple months in or so. How\u2019s it going? Actually, I made a new Roblox<\/em> account from scratch.<\/strong><\/p>\n<\/div>\n I did it purposefully to see the experience, so this is about two hours ago. And the front page for me after I put my age and everything, was still a lot of games that, frankly, I\u2019m not going to play. Kids games. So it seems like you\u2019re still kind of lagging on that content that would get someone like me on the platform.<\/strong><\/p>\n<\/div>\n The fastest-growing segment on the platform is users aged 17 to 24, growing north of 33 percent year on year<\/p>\n<\/div>\n<\/div>\n I think that\u2019s a leading indicator. If we roll back the clock four, five, six, seven years when we were much smaller pre-public<\/a>, that vision of creating an immersive platform that connects people around the world, that allows them to socialize, do things together, we even saw back then this has to be in every country. This has to be in all ages. So we started with the notion that this is going to be a platform for six-year-olds and 60-year-olds. The most recent earnings report, we shared that 17 through 24 is the fastest-growing segment on the platform, growing I think north of 33 percent year on year. So we\u2019ve actually stopped using the term \u201caging up\u201d right now. We have a very substantial over-17 user base. The thing you were experiencing is we have started allowing our creators, when you\u2019re validated with your photo ID and we know for sure you\u2019re 17, to start easing into some of those more mature experiences that you might consider kind of grown-up experience.<\/p>\n<\/div>\n I\u2019ve seen some trailers, like there was one you guys showed at RDC a couple of weeks ago that looked like Grand Theft Auto <\/em>in Roblox<\/em>. I mean, the graphics were very impressive. It\u2019s not the blocky kind of thing that you think of with Roblox<\/em>, and so I can see where it\u2019s going. But I guess right now when you\u2019re telling me that that demographic is growing the fastest, what are they doing on the platform? Because I don\u2019t see the experiences that \u2014<\/strong><\/p>\n<\/div>\n It\u2019s surprising the amount of older people that play just a wide range of experiences and come to socialize. I was in Canada hanging out with some third cousin at a family reunion, a 24-year-old guy who works on the railroad as an engineer, and he said, \u201cYeah, I\u2019m really excited to meet you because all of the mechanics at CN Railroad [Canadian National Railway] are playing Roblox<\/em>.\u201d And I said, \u201cWhat is going on? That\u2019s too good to be true.\u201d And they\u2019re like, \u201cYeah, we\u2019re playing Jailbreak,<\/em> and we\u2019re playing some of these experiences.\u201d So they are playing these experiences. The level of social, the level of immersion, the level of being together with your friends no matter where they are is somewhat universal. So that\u2019s doing surprisingly well for us.<\/p>\n<\/div>\n This is kind of a big-picture question, but I\u2019m curious about what you want to be. I think there\u2019s this interesting gap between where Roblox<\/em> is today, what it\u2019s been historically, and how you talk about the company.<\/strong><\/p>\n<\/div>\n In my mind, you could easily be content to just go after the entire gaming market. I mean, it\u2019s bigger than the music and the movie industry combined. But you seem more focused on building a next-generation almost social network. You talk about this as a communications platform. Why go that direction? Is the gaming industry not big enough?<\/strong><\/p>\n<\/div>\n \u201cOur belief is, this type of technology is bigger than gaming\u201d<\/p>\n<\/div>\n<\/div>\n I think that\u2019s a great question. I mean, we\u2019ve shared publicly that our goal would be to get to a billion daily active people on the platform. And I think our vision of what we\u2019re working on goes really almost to the future of communication. It goes to the evolution of the mail system, to the telegraph system, to the phone system, to, as we saw in covid, the video system. We just think inevitably there\u2019s a generation beyond that, which is immersive 3D communication, whether it\u2019s playing together, whether it\u2019s trying to graduate from high school together during the midst of covid, whether it\u2019s a simulation of our Roblox office inside Roblox<\/em>. We go and have a simulation of our office, and we come together for serendipitous events, whether it\u2019s going to a concert. So our belief is, this type of technology is bigger than gaming. Gaming is a part of it, side-by-side concerts and working together, so I think we\u2019ve evolved to a utility vision of this type of platform.<\/p>\n<\/div>\n I think you made a prediction at RDC a couple of weeks ago about dating. You think people are <\/strong>going to be dating<\/strong><\/a> in Roblox<\/em>.<\/strong><\/p>\n<\/div>\n It was really fun when we made this prediction because we were very careful on that slide. And then you saw the 17-plus people ID validated in 17-plus experiences.<\/p>\n<\/div>\n So parents don\u2019t have a heart attack.<\/strong><\/p>\n<\/div>\n Yeah, yeah, yeah, given our history of safety and civility and the focus on that. But ultimately, what\u2019s really interesting about the dating market, there\u2019s probably a third of the population that won\u2019t go on Bumble or Tinder or Hinge or whatever just because of awkwardness. In an immersive 3D avatar-type communication where you can be Shrek and I can be whoever I want to be, there\u2019s actually a certain way to… I\u2019ll be Donald Duck.<\/p>\n<\/div>\n There\u2019s actually a little bit of a breakdown of the friction, of the fear of a video call, so I actually do believe that\u2019ll happen. I do believe someday someone will build a dating app on Roblox<\/em>. It\u2019ll be very safe. It\u2019ll be for 17-and-up people, and it\u2019ll be an interesting way for people to connect.<\/p>\n<\/div>\n Talk to me about this advertising push you guys are also making and how it connects to the changing demographics of the user base. Are they related? And how big do you see the ads business becoming?<\/strong><\/p>\n<\/div>\n I think it\u2019s really interesting. The amount of engagement is north of 5 billion hours per month on the platform, and more and more of that is north of 17-year-old engagement. And when we think about what advertising is, a lot of it is fandom. It\u2019s seeing a poster of something I like, maybe historically seeing something in a newspaper. More recently seeing something as a web banner, and then more recently seeing something as a very native natural video segment or something like that. But we do believe there\u2019s something beyond that, which is the 3D experience. For example, if we\u2019re in a retail store together and we\u2019re shopping and we can remember what\u2019s on the shelf and how it looks, whether it\u2019s shoes or makeup or whatever, and we do think that\u2019s going to be a very, very powerful experience for brands.<\/p>\n<\/div>\n We already have hundreds of brands on the platform. I was just seeing the most revised Gucci experience, which is radically amazing. It\u2019s a simulation of their runway show. And in those experiences, there\u2019s both brand recognition, which is maybe harder to measure. There starts to be the acquisition of virtual goods: Gucci purses and those kinds of things. And then, ultimately, there\u2019ll be at some point, not yet really announced or promised, physical shopping as well. That kind of shopping with your friend is a very social, fun experience.<\/p>\n<\/div>\n How big do you see the ads business being? Is it something that could potentially be as big as your core business today?<\/strong><\/p>\n<\/div>\n \u201cOur CFO\u2019s friend was … walking by a Vans store, and younger people wanted to go in there because they were familiar with that from Vans World on Roblox<\/em>.\u201d<\/p>\n<\/div>\n<\/div>\n It\u2019s interestingly big. We\u2019re in a great position because we generate a really good business without advertising. So it gives us an opportunity to layer this in for older people in a very civil way, in a very careful way. But I think it\u2019s arguably undetermined how big it is. We will see based on the power of the memories that people have in their brands. Anecdotally, our CFO\u2019s friend was in Santa Monica and walking by a Vans store, and younger people wanted to go in there because they were familiar with that from Vans World on Roblox<\/em>. So building digital memories and connecting with brands that are fun and exciting and then merging that with the physical world is new, uncharted territory.<\/p>\n<\/div>\n On the topic of growth, this is something I haven\u2019t heard you talk about since you went public. A big part of your growth narrative when you went public, it was mentioned many times in the prospectus, for example, was this joint venture you had with Tencent in China. And less than a year after you went public, it got shut down without explanation.<\/strong><\/p>\n<\/div>\n I saw that your head of China is now your head of Japan. <\/strong><\/p>\n<\/div>\n Where are you with China?<\/strong><\/p>\n<\/div>\n Tencent continues to be an amazing partner. We\u2019re being very, very careful in China. The dynamics in China right now have gone to the point where, rather than envisioning a fully connected-type network, we have to imagine an autonomous network. We\u2019re, in a sense, modernizing our infrastructure to the point where we can literally print a copy of Roblox<\/em> in China and bring it to market there. So we continue to be very involved in China. We\u2019re optimistic about it. We have a great partnership with Tencent, but we\u2019re working on the infrastructure to support that.<\/p>\n<\/div>\n What does that mean, \u201can autonomous version\u201d of Roblox<\/em>?<\/strong><\/p>\n<\/div>\n I think as you would look at any other platform or any other social media-type company, we would look back over the last three to four years and see less and less information going back and forth between the US and China to the point where I think the future will be very little goes back, for example, in a China situation.<\/p>\n<\/div>\n So you haven\u2019t given up on China?<\/strong><\/p>\n<\/div>\n Okay, interesting. So you recently put Roblox<\/em> on the Meta Quest headset, and it\u2019s not officially in the store yet, but you got 1 million installs in five days, and it was just in a beta where you have to go find it. You can\u2019t just go download it from the store.<\/strong><\/p>\n<\/div>\n That\u2019s right, that\u2019s right.<\/p>\n<\/div>\n Where do you see VR going as it relates to Roblox<\/em>? There\u2019s the Vision Pro. Have you tried the Vision Pro?<\/strong><\/p>\n<\/div>\n I have not tried a Vision Pro.<\/p>\n<\/div>\n You\u2019ve <\/strong>got to try it<\/strong><\/a>. Will you guys be on Vision Pro? Are you a big believer in this headset wave that\u2019s coming?<\/strong><\/p>\n<\/div>\n I\u2019m a big believer, long term, that the most immersive form of 3D experience will be VR-type experience. There\u2019s some great sci-fi around what the far-off future of VR is. I think our vision is, because we are a platform and because we work so hard on\u2026 young creator shows up, builds something on Roblox<\/em>, pushes a button, runs on any device, is auto-translated into any language, possibly that can build a business on top of that, there\u2019s a huge benefit to being very, very good on all devices and tracking the growth of devices. So we can contribute to the growth of Meta Quest, and I\u2019m excited about that. If someday there are 500,000 or 500 million VR headsets, Roblox<\/em> will be a huge part of it, but I think we\u2019re not in the position of predicting the growth of any hardware device.<\/p>\n<\/div>\n What about AR? So not fully immersive, but <\/strong>AR glasses<\/strong><\/a>.<\/strong><\/p>\n<\/div>\n AR is also super interesting, right? Is the future going to be mixed reality? Is the future going to be lighter weight, less overlaid type stuff? Is the future ultimately going to be some of the vision of some of the companies that have been started? Someday, I think I wrote a blog post about it 10 years ago, we will have full overlay, whether it\u2019s contact lenses, and it\u2019ll be lightweight and all of that. I think AR is very interesting when we think about immersive 3D communication because there\u2019s communication where we\u2019re simulating this world and we\u2019re sitting here together. There\u2019s also communication where grandma and grandpa are sitting at the kitchen table, and I think AR starts to support that vision of some people are on VR devices, some people are on AR devices. You can either put grandma and grandpa in the chair, or you can go to the favorite family destination. So I think it\u2019s very interesting.<\/p>\n<\/div>\n We\u2019re going to have time for Q&A in a few minutes, so get your questions ready. We\u2019ll have time for three or four questions.<\/strong><\/p>\n<\/div>\n You and I, a few months ago when we did the <\/strong>interview for Decoder<\/em><\/strong><\/a>, we talked a lot about AI and this kind of analogy to… I don\u2019t know if people have seen the last season of Westworld<\/em>. The main character has this job where she just goes in and talks to a computer and creates virtual worlds as a narrator. And you said you see that happening on Roblox<\/em> in the not-too-distant future. You all talked a little bit more about this at RDC a couple of weeks ago. Where does generative AI intersect with what Roblox<\/em> does?<\/strong><\/p>\n<\/div>\n I think one way to think about this is three big AI clouds that are accelerating creation and supporting the platform. One of these clouds has been there for two or three years, no one knows it. Safety, automatic translation, moderation, efficiency, we\u2019ve been working on that for two or three years, and we probably have 70 AI pipelines to drive the efficiency of the business and the quality of the business.<\/p>\n<\/div>\n The middle cloud, which I think is a lot of energy right now \u2014 generative \u2014 how easy is it to make creation happen for everyone? Vision on Roblox<\/em> would be in addition to, say, competing on Project Runway<\/em> and using digital scissors and a digital sewing machine, we would also use prompts. I\u2019d like a blue shirt, buttons this color, and AI will start to generate that.<\/p>\n<\/div>\n So AI generative is very interesting for avatars, for clothing, for 3D experiences to really bring creation to everyone, and we\u2019re deep in on that. We\u2019ve already shipped AI code generation to help creators create. We\u2019ve shipped AI material generation. I think having a company with amazing… A lot of user data flowing can help support and train those types of models.<\/p>\n<\/div>\n \u201cThere\u2019s a third cloud way out there, which is starting to imagine having a virtual doppelganger … that\u2019s the more sci-fi future.\u201d<\/p>\n<\/div>\n<\/div>\n There\u2019s a third cloud way out there, which is starting to imagine having a virtual doppelganger, for example. If you wanted someone to take your place, if you wanted someone to meet me for five minutes before our meeting to just kind of figure things out, I think that\u2019s the way-off-far future. And it\u2019s not just generative AI, but it\u2019s generative AI that might look and act like you in a virtual space. So that\u2019s the more sci-fi future.<\/p>\n<\/div>\n So that\u2019s an AI trained on my Roblox<\/em> persona and data to be like me?<\/strong><\/p>\n<\/div>\n That\u2019s right. If you so choose and you so want that, then that could be an opportunity.<\/p>\n<\/div>\n Alex Heath: Dave is very good at these Q&As. He does them a lot at his conferences.<\/strong><\/p>\n<\/div>\n David Baszucki:<\/strong> I don\u2019t. Oh, I do them with developers.<\/p>\n<\/div>\n AH: Yeah, I\u2019m just saying give him good questions. Give him hard questions.\u00a0\u00a0<\/strong><\/p>\n<\/div>\n Cathy Hackl: Hi Alex and David. Cathy Hackl. I\u2019m a tech and gaming executive at Journey, a Roblox<\/em> player, and the mother of an 11-year-old Roblox<\/em> developer that makes about a hundred dollars a month from his builds.<\/strong><\/p>\n<\/div>\n CH: So, yay. Yeah. During RDC, you gave one of your predictions. You said a top fashion designer will be discovered on Roblox<\/em> without having any experience in physical fashion. What is the role of fashion in the future of Roblox<\/em> and direct-to-avatar?<\/strong><\/p>\n<\/div>\n DB:<\/strong> It\u2019s huge, right? Karlie [Kloss] is on our platform<\/a>. Parsons [School of] Design did a partnership<\/a> with us. At RDC, we saw a couple of the gowns that had been done in concert with some of the students there. They were absolutely amazing. So one could imagine reducing the friction of creativity for a fashion designer to ultimately virtual design \u2014 and then, ultimately, AI-supported design.\u00a0<\/p>\n<\/div>\n It\u2019s interesting to imagine this as a prototype environment for fashion. You can try a lot of things more quickly than building the physical. You can get crowd feedback. There will someday be experiences where early designs are voted on. We\u2019ve had things like that in a more simplistic way, and then you can imagine almost predicting what types of designs from top designers would be welcomed. So I think it\u2019s really big. Thank you.<\/p>\n<\/div>\n Neil Shankar: Hi, my name is Neil Shankar. I\u2019m a content creator. I have always thought of Roblox<\/em> as largely a metaverse company. In fact, my introduction to the metaverse concepts was from a <\/strong>series of essays<\/strong><\/a> that Matthew Ball wrote a few years ago that Roblox<\/em> was largely the center of. Recently, I\u2019ve become aware of a brand marketing push, I believe by your sports division, to distance yourselves from metaverse connotations. Can you please tell us about that?<\/strong><\/p>\n<\/div>\n DB:<\/strong> I wouldn\u2019t say that\u2019s a distancing. We have evolved the terminology we\u2019ve used. We\u2019ve always used the term \u201chuman co-experience\u201d or \u201cbringing people together.\u201d The metaverse context, as we know, was coined with the book Snow Crash<\/em> a long time ago. And it\u2019s interesting. It\u2019s gone and ebbed through various flows. But I guess we imagine this more as a communication and connection platform. We\u2019ve never really used the term metaverse a lot, and I think going forward, we\u2019ll probably always think of ourselves as a communication and connection platform.<\/p>\n<\/div>\n Alex Kruglov: Hi, my name is Alex Kruglov. I run a startup called pop.in, which is also in the social gaming space but for a much older user base. I\u2019m curious: when you think about 24 hours in a day and you talk about the future that you see with a billion daily actives and all kinds of time spent not just playing games but anything from dating to shopping and so on, what are people not going to be doing and switching? Clay Christensen has this concept of <\/strong>jobs to be done<\/strong><\/a>. Who are they firing? What jobs are they firing in order to be on Roblox<\/em>?\u00a0<\/strong><\/p>\n<\/div>\n I asked this from the point of view of a parent of three kids, the middle of whom \u2014 for all intents and purposes, it\u2019s crack when it comes to Roblox<\/em>. It\u2019s highly, highly regulated by her parents.<\/strong><\/p>\n<\/div>\n AH: Yeah, how dystopian is this going to be?<\/strong><\/p>\n<\/div>\n DB:<\/strong> Yeah. We\u2019re actually very optimistic. And I think we\u2019re optimistic because, in the specter of social media, there\u2019s a wide range of things that people do on social media. Some consume a lot of short video content and trigger dopamine. Some are \u201ccompare my life with your life and accelerate FOMO.\u201d Some are hopefully similar to the feeling of, \u201cWell, my kid\u2019s on the phone with their friends. They\u2019re connecting, inventing, hanging out.\u201d So I\u2019m actually somewhat optimistic that the future of our direction is bringing people together when they can\u2019t be in real life.<\/p>\n<\/div>\n Casey Newton: Hi. Casey Newton from Platformer<\/em>. When I look at Roblox<\/em>, I see something that looks a lot like an app store that increasingly looks like it wants to be an operating system, which to me, would seem to put it on a kind of collision course with an iOS or an Android or maybe even the Oculus Store. So I wonder how you think about that and how you think you can get to that billion daily active people without owning your own hardware.<\/strong><\/p>\n<\/div>\n DB:<\/strong> One thing to think about when we imagine millions of creators and we can go to ancient Egypt or we can go to our office or whatever in immersive 3D is that content cannot all be shipped to the device. It\u2019s just impossible to have that much content. So that content needs to come to the device in a very unique architecture where there\u2019s very low latency, there\u2019s a lot of local 3D simulation, but at the same time, on the cloud, that content needs to load and connect very fast. And I think this architectural inevitability of a 3D connection platform where we can go everywhere instantly is maybe what you\u2019re thinking about or referring to. I would say, Apple, these platforms, are very aware of this inevitable architecture for 3D and are actually very big supporters of it.\u00a0<\/p>\n<\/div>\nAudience Q&A<\/h3>\n<\/p>\n