Roblox pays app stores 23% in fees for each dollar spent on the platform

Roblox remains a popular online gaming platform globally, with the ecosystem bringing in significant revenues channeled toward different segments. One notable area that accounts for the enormous amount of money spent on Roblox is the app store and payment processor fees that are partly limiting the funds that can be passed to other core entities such as developers. 

In this line, data acquired by Finbold indicates that as of March 2023, the global estimated utilization of each dollar spent on Roblox at 24.5% was channeled towards developer exchange responsible for building an engaging experience on the ecosystem. The second share, at 23.3%, represents allocation catering for the App store and payment processing fees, while platform hosting and support ranks third at 22.4%. 

Other areas receiving a significant share of the allocation include platform investment, which ranks fourth at 15.7%, while Roblox accounts for 9%. Elsewhere, developer engagement-based payouts have the least share at 5.1%. 

Why app store fees are dominating money spent on Roblox

Although the highest share of the money spent on Roblox goes to developer exchange, it’s interesting those app store fees represent the second highest share of the estimates due to various factors. One of the main reasons is that Roblox operates a highly complex platform where developers can create and monetize their games and experiences within the ecosystem. The platform handles all the payment processing for these developers, which incurs transaction fees that are passed on to Roblox.

Roblox also distributes its platform through multiple app stores, such as Apple’s App Store and Google Play Store, which charge fees for every transaction that takes place on their platforms. These fees can be as high as 30% of the transaction value, which can significantly impact Roblox’s bottom line.

In this context, App store fees account for a significant portion of the money spent since a large percentage of Roblox’s user base accesses the platform through mobile devices. This means that a substantial portion of the revenue generated on the platform comes from in-app purchases made through the App Store or Google Play Store.

In addition, Roblox has experienced explosive growth in recent years, which has led to a corresponding increase in the amount of money paid to app stores and payment processors. As Roblox continues to expand its user base and developer community, it is likely that these fees will continue to increase. The growth is highlighted by a previous Finbold report indicating that in 2022, Roblox topped 200 million downloads globally while dominating the gaming segment for devices such as iPhone in the United States. 

It is worth noting that Roblox offers multiple ways people spend money, including purchasing accessories and clothes for avatars in the marketplace. Spending on in-experience offers such as special abilities and accessories.

However, there are also benefits to using app stores and payment processors, such as increased visibility and credibility, which can lead to more users and higher revenues. Moreover, app stores and payment processors provide a secure and reliable way to handle transactions, essential for an online platform like Roblox in the wake of growing competition.

Improving the Roblox platform 

Indeed, with the gaming space experiencing increased competition, Roblox is also spending a heavy share of money on the platform to constantly develop and improve features to enhance its users’ gaming experience. This includes expanding its server infrastructure, improving game moderation and safety, and developing new tools and features for game developers.

Despite the high share in app store fees, Roblox has been able to maintain its position as one of the most successful gaming platforms in the world. However, the company has also been vocal about its desire to reduce the fees it pays to app stores and payment processors, which would enable it to pass on savings to developers and potentially attract even more creators to its platform. 

Notably, the proposal is a reaction to the company’s previous criticisms over its model of distributing money spent on the ecosystem, given that there has been a conflict between mobile giants and developers on communication issues regarding the fee structure.