WEBVTT - Roblox CEO Dave Baszucki Talks Slashing Forecast & Stock Selloff

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, roadblocks is paying a

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<v Speaker 1>price for children's safety. It's not prompted after the company

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<v Speaker 1>credits for your bookings forecast. Making clear though that that

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<v Speaker 1>new age verification and child safety features that they've embedded,

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<v Speaker 1>they're creating some friction for user growth. CEO David Zooki

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<v Speaker 1>joins us now, and you made really bold statements in

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<v Speaker 1>the investor letter saying this is worth it. This is

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<v Speaker 1>worth it long term because it's building a safer global

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<v Speaker 1>standard of safety. Talk us through when you will see

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<v Speaker 1>actually that friction die down.

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<v Speaker 2>Hey, great to be here at highlighting coming off a

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<v Speaker 2>great quarter forty three percent year on your bookings growth,

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<v Speaker 2>bookings of one point seven billion dollars more than twice.

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<v Speaker 2>What we've shared with investors is our long term growth trajectory.

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<v Speaker 2>And yes, we've highlighted our commitment to setting the global

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<v Speaker 2>standard for healthy, safe, age appropriate digital engagement. We have

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<v Speaker 2>rolled out age check all around the world this quarter.

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<v Speaker 2>We now have over sixty five percent of US users

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<v Speaker 2>who we have age checked. But we did highlight in

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<v Speaker 2>our earnings call there is some short term friction from

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<v Speaker 2>communication and other factors. We believe though this is worth it.

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<v Speaker 2>We are well on our path to ten percent or

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<v Speaker 2>more of the global gaming market and more of that

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<v Speaker 2>of us, and we want to bring along all of

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<v Speaker 2>our under sixteen users as well as the over sixteen

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<v Speaker 2>who are growing very rapidly.

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<v Speaker 1>How about bringing along the industry, Dave, Because you're a

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<v Speaker 1>first adoptor here of this technology that can help age verify.

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<v Speaker 1>Do you think others in gaming will have to do this?

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<v Speaker 1>Do you think others will experience such friction as you

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<v Speaker 1>come out of it.

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<v Speaker 2>I want to highlight if you go to our corporate

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<v Speaker 2>site and read our values, one is take the long

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<v Speaker 2>view and the others respect the community. We've continuously innovated

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<v Speaker 2>on safety since we started in the company, and as

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<v Speaker 2>the technology got good enough to age check, we've leaned

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<v Speaker 2>into it. This is an addition, of course, to our

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<v Speaker 2>industry leading text filtering, the fact that we don't allow

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<v Speaker 2>image sharing on the platform. This has allowed us to

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<v Speaker 2>do several things. In addition to age checking, We're going

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<v Speaker 2>to be introducing kids accounts and select accounts. We're able

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<v Speaker 2>to do this within our same app because we are

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<v Speaker 2>age checking. Also because we're age checking, we can now

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<v Speaker 2>identify the eighteen and up players on our platform, and

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<v Speaker 2>we've introduced some interesting economics for them. So we do

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<v Speaker 2>think we're setting the industry standard and we have this

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<v Speaker 2>commitment to what we call the global standard.

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<v Speaker 3>Dave, good Morning. You came on the program three weeks

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<v Speaker 3>ago and I asked you if you would kindly model

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<v Speaker 3>for us at that moment when you were announcing the

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<v Speaker 3>new policy and new platform changes with safety in mind,

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<v Speaker 3>how that would impact user behavior. And that's kind of

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<v Speaker 3>played out in the earnings print, right, Just explain that

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<v Speaker 3>the interaction between the policy that you put in place

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<v Speaker 3>and why it would impact user metrics and behaviors to

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<v Speaker 3>the platform.

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<v Speaker 2>Well, I want to highlight we're using age checked and

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<v Speaker 2>we're asking our users to age check if they want

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<v Speaker 2>to use the communication functionality on roadblocks. So in Australia

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<v Speaker 2>we're over seventy percent age checked, in the US over

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<v Speaker 2>sixty five percent. But that does highlight there could be

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<v Speaker 2>roughly thirty five percent of our users in the US

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<v Speaker 2>who currently are not communicating on our platform. We believe

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<v Speaker 2>that can contribute to some short term friction. In addition,

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<v Speaker 2>as we go along on our eight in an over segment,

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<v Speaker 2>we've shared that more and more, we're using our recommendation

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<v Speaker 2>algorithms to support long term retention on the platform more

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<v Speaker 2>than shorter term monetization. These both have contributed to short

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<v Speaker 2>term friction.

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<v Speaker 3>Dave, let's talk about Roadblocks's future and Roadbox Reality. This

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<v Speaker 3>seems like a big play, a big upgrade from Roadbox Studio.

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<v Speaker 3>We talk all the time to Unity. I am very

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<v Speaker 3>into unreal engine right and how that impacts my experience

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<v Speaker 3>in the games that I play. This presents an opportunity

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<v Speaker 3>for you to do work with some of the big

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<v Speaker 3>budget developers. Could you just explain the pathway to that well.

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<v Speaker 2>I want to highlight two separate levels of this. We

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<v Speaker 2>have continued to release over the last quarter and will

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<v Speaker 2>continue functionality that is very unique to Roadblocks. Roadblocks is

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<v Speaker 2>a game engine, a client, a cloud, and together we're

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<v Speaker 2>committed to publishing once and having whatever you publish work

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<v Speaker 2>both super high quality on a gaming PC, but also

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<v Speaker 2>perform very well on a two gigabyte Android phone. Those

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<v Speaker 2>are very different configurations. We want to support both with

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<v Speaker 2>the same build as well as when our creators build

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<v Speaker 2>on Roadblocks, they go around the world. The future for

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<v Speaker 2>us is a hybrid architecture, and what we want to

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<v Speaker 2>do is make it easy for creators to create experiences

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<v Speaker 2>that are ultimately multiplayer and photorealistic and do it very

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<v Speaker 2>easily by powering it with AI. So we have combined

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<v Speaker 2>really a hybrid architecture we're starting to show it off

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<v Speaker 2>that combines our multiplayer synchronization with cutting edge real time

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<v Speaker 2>video world models. We believe this is the ultimate hybrid

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<v Speaker 2>architecture to democratize photorealistic multiplayer I like that about.

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<v Speaker 1>The democratization and making sort of the building of games

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<v Speaker 1>open to many. How do you think about the pricing

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<v Speaker 1>structure briefly, Dave.

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<v Speaker 2>We've said initially roadblocks. Reality will not be free. I mean,

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<v Speaker 2>real time video AI modeling in the cloud is expensive.

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<v Speaker 2>But just like with the rest of the AI world,

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<v Speaker 2>these prices are going to come down and down. I

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<v Speaker 2>want to highlight this is complemented really with our vision

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<v Speaker 2>for creation, and if we look at what's happening in

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<v Speaker 2>the coding space over the last six months, more and

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<v Speaker 2>more software engineers are literally having AI run overnight doing

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<v Speaker 2>multiple iterations to help build software. Gaming is much more complex.

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<v Speaker 2>It involves software, three D assets, NPCs, real time operations,

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<v Speaker 2>terrain geometry. We're really pursuing that same vision that agentic

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<v Speaker 2>multiple iteration AI work. With Roadblock Studio, we started introducing

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<v Speaker 2>things as innovative as using NPCs to help test software,

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<v Speaker 2>and we believe we're uniquely poised to help creators build

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<v Speaker 2>more quickly, higher quality, and more diverse experiences.

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<v Speaker 3>David Zuki, CEO of Roadblocks, thank you very much