Roblox, an online gaming firm, filed a petition with the US Securities and Exchange Commission last week with the intent of selling its stocks to the public. In other words, Roblox wishes to go public, and hence it has filed for an IPO.
A major point that has been expressed in detail in the complete IPO description is that it wishes to enter China.
Previously, all gaming organizations entering China have had to establish a tie-up with a native game publishing organization, which would take up running the country’s game. The same procedure was followed by Riot Games, Supercell, Epic Games, Activision Blizzard, Ubisoft, Nintendo, and many gaming firms who desired to establish their business in China. To satisfy this protocol, Roblox partnered with Tencent in 2019, which has been established as the biggest video game firm in its global earnings, as stated in Newzoo.
In the partnership deal existing between Roblox and Tencent, the former holds about 51% share, while Songhua, a subsidiary of Tencent, has about 49% share in the complete deal. The IPO filing brochure mentions the fact very specifically that Tencent is looking out on setting up a native Roblox version so that it can be operated within China.
Roblox permits users across the world to create new games and, at the same time, play those games that have been made by someone else.
What attracts youths to the Roblox platform is how they are allowed to create games and content. However, the Chinese government is not very much in favor of content generated by the users. These regulations rise out because anything getting going public on the internet should be investigated thoroughly, especially game-related information. With such strict rules in place, games that are created by any random user may find it a little difficult to enter China.
Wenfang Yang, who has been associated with the gaming industry for many years now, feels that games created by global users may never be able to arrive in China, just like the Animal Crossing game.
On the other hand, Roblox feels that it is good enough to enter China and establish its presence within the country, provided Tencent can tackle all kinds of legal obstacles coming in the way. It remains to be seen what steps would be implemented by Roblox to ensure that this process’s content would not create any issues for the Chinese government in approving the same. It is worth mentioning here that Tencent’s late record has not been very good in Chinese authorities’ sight as the company has come under the scanner for generating “addictive” and “harmful” game sources.
Furthermore, Roblox needs to ascertain that the quality of the game content should be supreme, irrespective of the system that would be put up. The gaming company also states that it has sufficient user safety measures put up in place. All these factors would ensure that there is no kind of flaw in the game code. Roblox seems to be extremely confident of getting approval from the Chinese government.
Loubo, the native platform for Roblox in China, plans to create a very strong gaming group in the country, which would help the company generate premium gaming content.
Undoubtedly, the biggest gaming market is globally in China. Hence, it is quite understandable that Roblox looks to entering and establishing its gaming network within the country. Tencent is well-known for making good game-creators from the users involved in social networking. And the fact that Roblox is focused on bringing in a lot of creativity may go down pretty well with Beijing, which has asked tech organizations to boost up their creativity factor, which has been fulfilled by Tencent.
The Roblox website for China (dubbed in Chinese) reveals that the organization is in talks with a few schools to encourage and inculcate learning.
However, going by the current state of relations existing between the US and China looks like Tencent is at the center of attraction. In September, Bloomberg reported that the CFIUS, the Foreign Investment committee based in the US, has been looking into how gaming data is generated within Tencent.
So far, Roblox has not stated anything with regards to any of this as it has filed its IPO.