[only_as_i_fall]

>Second, there’s the matter of how extensively Robux (Roblox’s in-app currency) are used to navigate the creator economy. Roblox creators are paid first by receiving a cut of Robux that comes from the sale, which they can use to purchase other Roblox experiences, in-game assets, cosmetics, etc. That means once a developer enters the Robux economy, their money is all spent inside the Roblox system until they’re able to withdraw it. ... But to withdraw it, they need to have raked in roughly $1,000 worth of Robux.

This part seems pretty indefensible. Like yeah to a certain extent all online content platforms have a gate like this, but I've never heard of one that high. YouTube e will pay you as soon as you make something like $20 iirc. And the fact that they pay you in their gated currency which they then allow you to spend but only within their system seems like am obvious self-serving money grab.

[rtkwe]

> But to withdraw it, they need to have raked in roughly $1,000 worth of Robux.

It's even worse than that. They sell robux at one rate and cash them out for developers at a very different rate. That $1,000 worth of Robux becomes $350 when you go to extract it. So they're taking cuts twice, once on the actual sale and again whenever you try to turn it into real money instead of their scrip.

[elliekelly]

> That $1,000 worth of Robux becomes $350 when you go to extract it.

Knowing nothing at all about Robux I’m not sure I follow. When you say “$1,000 worth of Robux” here you mean $1,000 USD, right? And not 1,000 units of Robux?

So if I’m a developer on the platform and I’ve earned however many Robux equal $1,000 USD and I initiate a transfer then my actual cash receipts will be ~$350 USD? Am I understanding that correctly? Because that seems nuts. Especially when they’re targeting kids as their primary “developers”.

[Fargren]

Yes, you understand correctly. The minimum amount to withdraw is an amount that would cost 1000 USD to buy. When withdrawing that amount, you would get 350 USD

[elliekelly]

Ah, thank you. One follow-up question: if I don’t cash out my $1,000 USD worth of Robux can I spend them in game at their full $1,000 USD value?

[Raymonf]

Yes, you can spend it in-game at the full value.

I'm not sure if this has been mentioned yet, but it's also important to note that not all Robux is equal. There's more information at https://en.help.roblox.com/hc/en-us/articles/115005718246 under section 3.B.

[robocat]

3.B “Minimum of 100,000 earned Robux in your account. In order to protect against money laundering and comply with applicable law, we limit all Cash Outs to "earned" Robux. Robux are considered "earned" if you receive them by receiving payments from a bona fide third party transaction through the Services for (a) virtual items (such as clothing for an avatar) that you created or (b) virtual things in your game or for your game or experience. This means that Robux acquired in other ways (e.g., receiving Robux as part of a membership plan or referral bonus, a purchase of Robux or gift card, or trading/selling virtual goods that you did not create) are not considered "earned". We will determine how much you are eligible to Cash Out by totaling the amount of Robux earned (over the lifetime of the account) and subtracting the amounts previously paid out to you through DevEx;”

Also note that there is a comment in the video that you need to be careful how you spend your Robux for buying development, because if you are not then a cut gets taken, which maybe relates to 3B for the person you are paying?

[Arrath]

Wow, that is pretty awful.

[rtkwe]

> my actual cash receipts will be ~$350 USD?

Yes, ignoring any tax requirements because I'm not a tax attorney. You have to have 100k Robux (Rb) to initiate a withdrawl, that 100k Rb costs 1000 USD (ignoring any bulk deals they may run) to buy if you just purchased it from Roblox, but when you sell it to Roblox for USD you get 350 USD. So depending on how you look at it it is worth either 1k or 350 USD. The article was using 1k as the frame and it's what it would cost you to get that much buying directly so to me that's the most accurate.

[jedberg]

I believe it is like Forex but with a really bad spread. You can buy Robux for $X USD, but when you sell robux you only get $.35X USD.

[humanlion87]

That is insane. How are they even getting away with such a scheme? Did they start out at a 1:1 ratio and change it once network effects and lock-in happened.

[Moru]

They get away with it because it's all kids that doesn't know any better.

[Kiro]

In literally all other games I know of the ratio is 1:0 since you can't cash out their in-game currency at all. Do you have any of example of a game or a platform where you can sell the in-game currency for the purchase price?

[rnotaro]

Secondlife have a fair spread and is player to player.

They take 3.5% of fee when you are transfering it to USD. (Sellers)

Buyers are charged charged a 7.50% transaction fee with a minimum of US$ 1.49 and a maximum of US$ 9.99 per transaction

------ The current spread on Lindex (SL Forex) is :

BUY: L$242 / US$1.00 (L$14,816 Remaining) SELL: L$249 / US$1.00 (L$29,411 remaining)

[Talanes]

The closest I can think of are systems like Eve, where players can trade in-game currency for game time tokens purchased by other players. 1:1 ratio, but the real money is proxied by game time so that no one can actually remove cash.

[stickfigure]

Can you transfer it? If so, seems like it would be hard to prevent secondary markets from forming.

[rtkwe]

No, they don't have a way to move anything other than games. Probably specifically to avoid the chance of a secondary market forming. Trying to police real world trading is hard so they just cut off the chance for it entirely.

https://en.help.roblox.com/hc/en-us/articles/203313090-Can-I...

[rtkwe]

I was wrong there is a trading system this is just about moving items between accounts. Some places implement balanced trade requirements to get around RWT.

[robocat]

Section 3.F of Terms of Abuse:

“the following will make you ineligible for a Cash Out:” “attempting to exchange Robux for real currency other than through DevEx”

https://en.help.roblox.com/hc/en-us/articles/115005718246

[kenjackson]

You can sort of transfer it via trading. There is a black market that exists, but it is FULL of scammers.

[all2]

They need a stable-coin.

[pjc50]

Sounds like they already have one.

[all2]

I was thinking something more stable than "buy for X and sell for X/10". Probably something not controlled by Roblox at all (USDC or DAI?). That would be giving up a lot of control, but it would solve the problems they're giving the kiddos.

[rtkwe]

Yeah Roblox doesn't want that. They want to be able to take a cut every chance they get and also to encourage people to just keep their money in Roblox to keep it moving through purchases so they can keep taking 75% cuts instead of the /only/ 65% they taken when someone cashes out.

[ashtonkem]

Classic case of trying to use technology to fix a regulatory issue. You can’t use technology to fix the fact that Roblox wants to extract value from its creators twice. Either they’d create a crypto currency with the same exploitive structure, or you’d have to fight to legally force them to pay out fairly using whatever crypto they settle on. And by the time you’ve done the latter, you could’ve just forced them to pay in USD.

[kortilla]

They can already solve that problem, it’s literally a rate they program. They don’t need a shitcoin to do that.

[midwestemo]

> YouTube will pay you as soon as you make something like $20 iirc.

Isn't it $100?

https://support.google.com/youtube/answer/1709871?hl=en

[kibwen]

On Twitch it's also $100.

[the_jeremy]

Used to be lower.

[code_duck]

When? This was the level I failed to meet for AdWords when I had a blog around 2007. What Google or other companies were doing in 2005 is so long ago that it’s hardly relevant.

[tapland]

Not for youtube. I made a video and got stuck at $85 or so which has been sitting there. And the gate to get any ad revenue at all has been raised so I'd have to get pretty serious to get the hours watched to earn the remaining $15

[y2bd]

In California (I assume other states have similar) the trick is to wait long enough such that it becomes unclaimed property. At that point, Google will surrender your 85 dollars to the state government and you can fill out some paperwork to collect it.

Source: happened to me via a Minecraft channel I used to run over a decade ago and essentially abandoned around 2013.

[ashtonkem]

I wonder if the old regulations around company scrip and stores might be used to legally undermine such tactics.

It doesn’t matter if you’re creating digital experiences, you must pay people with money, not company tokens.

[lotsofpulp]

You would first have to establish these kids were employed by Roblox, and I would predict that to be a very uphill battle.

It would be hard to argue Roblox is paying anyone in exchange for work.

[ashtonkem]

It’s long time that we eliminate the employee and contractor distinction for worker protections. Even if these kids don’t rate for benefits, they should still have the same protections that a full time employee has around being paid on time in cash.

[donmcronald]

There’s probably a long tail where a tiny fraction of devs make more than that. Free labor!

[alex_munroe]

By the same logic, YCombinator is "exploiting our free labor" through Hacker News. People write thoughtful comments, get nothing in return, and YC benefits from free publicity. Same for facebook posts, instagram, reddit, and every business that benefits from community and network effects.

Same for every video game that allows mods, custom levels, and so on. The only difference is that Minecraft users make no money at all for their efforts. How terrible! Poor children!

Either that, or people just enjoy being creative, making things is fun, and it's okay for kids to just enjoy making things and sharing them with each other, even if (oh, gasp!) the business that built the engine benefits from it. And being able to make any money from this at all is just a nice bonus.

[darknavi]

> The only difference is that Minecraft users make no money at all for their efforts.

Minecraft dev. here, not strictly true. We have a pretty bustling marketplace full of paid and free content (maps, skins, etc.) but the process to release such content right now is pretty hands-on and not suitable for non-adults.

[dtagames]

I beg to differ. HN is free because the contributors and audience provide a significant input funnel for founders, employees, and investors who directly participate in the YC economy. It's a recruitment and promotional tool for all three groups.

However, YC does not charge people to play HN in the way that Roblox charges for that game. No one is counting my minutes on HN and sending someone a payment, or a bill. There is no direct monetization of my UGC.

Mod.io is a gaming add-on (for mods) that also has no in-platform direct monetization of UGC assets. Of course, the games that use mod.io do it because having UGC at all brings the right kind of players and those players do pay.

So it is possible to make money, have UGC, and not be exploitative. I don't think Roblox can say that's where they are right now.

[duxup]

Most of these kids are just sharing games with their friends... like posting a video to youtube.

Free content maybe, but not free labor exactly IMO.

[kevingadd]

It's labor regardless of how much money you make off of it, though I think maybe you mean that they're little games that aren't the result of much effort?

[duxup]

Is YouTube getting free labor when I upload a video?

I feel like the exchange there is not about labor...

[ATsch]

Yes it is. That is what they make their money off of, the difference between what they earn off of the labor of the video creators and the money they pay out. If nobody uploaded videos, youtube could not sell attention just like if no steelworkers arrived, the steel mill can not sell steel. That applies to all social media/user generated content platforms.

Now, you might argue that this does not feel like labor because it's more voluntary than labor usually is. Which is totally correct and exactly why this industry is so lucrative.

[dtagames]

Not sure why you were downvoted but you're right. YouTube, in a total inversion of the TV business model, doesn't pay creators for anything until after it's been monetized -- and then they take a cut first. The cut is so early in the process that millions of videos are monetized and the creators are not even aware, much less paid.

This is the reverse of the Hollywood TV model where you paid creators first and then tried to monetize the content you owned. It's certainly still labor to create it. The only things that have changed are the ownership, licensing, and payment stream.

[duxup]

I feel like that really distorts my relationship / expectations with YouTube and just turns just about anything into 'labor'.

[majormajor]

The threshold to cash out seems high, but the percentage cut is curious, and I'm not convinced "exploitative" is the right word. It's a high cut, but is there anything else that makes it anywhere as close to make a game and share it with your friends? It seems to be in an entirely different league as any of the app stores or PC game development, so a higher cut there would make sense.

The "it's just for fun!" argument does cut both ways - then why introduce real money into the ecosystem at all? - but has an obvious "because real money is needed to make the product and ecosystem exist" answer. Is taking this much real money necessary? That seems like a much harder question. You could say it's a bit like college sports - playing a game with your friends and there's some institution that's taking all the money, and then, yes, if Roblox is rolling in huge profits and distributing a penance, they deserve some pressure on that.

[MrStonedOne]

from what i can tell, its 30% at transaction time, then 65% at withdrawal time.

That is not necessary.

[ShroudedNight]

Roblox taking a 151/200 AKA 75.5% total cut matches what I've heard from friends in the games industry.

[peoplefromibiza]

I don't honestly know about Roblox, but I've read that YouTube (to name one of the most popular UGC platforms) keeps 45% of the advertising revenues.

Looking at the numbers they made around $46 billion in the past three years.

Do we know how much of those 46 billions went to creators?

YouTube videos are also very different from video games, one can easily make 30 YouTube videos in 30 days, video games require weeks (if not more), it's easier to give up.

The incentive is very different.

Paying for low effort content posted frequently rewards consistency, YouTube needs their creators to keep making fresh content, not their best content, new is enough.

Video games not so much, they have to be at least appealing and a higher threshold could be better to keep creators focused on finishing their work and/or maintain an higher quality of the product, instead of cashing out quickly by making very cheap games just for the 50 dollars of payout.

[Anaminus]

Worth noting that, since the currency can also come from a handful of other sources (e.g. trading cosmetics), each cash-out is manually reviewed to ensure that the currency only comes from approved sources (sale of assets, games, products). Because of this, reducing the minimum payout does not scale, and at some point becomes infeasible. The article and video, of course, both fail to mention this.

Maybe throwing more manpower at the problem will let them reduce the minimum rate. Or they could work on altering their infrastructure to support a more automated system, possibly eliminating the minimum rate entirely.

[roblabla]

> Because of this, reducing the minimum payout does not scale, and at some point becomes infeasible.

Err, wat? This check could trivially be automated, and in fact I'd be very surprised if it wasn't already. All they have to do is maintain a separate (hidden) counter of "cashout-able" currency in their account, which only increases when the money comes from an eligible source (and decreasing so that it never goes above the visible "real" currency).

If Roblox claims this is a manual check, well, that's very probably just a bullshit lie.

[Anaminus]

What I can say is that, when the payout program started, all payout requests did go through a manual process (the minimum rate was the same then, by the way). Later on, there is evidence of account "snapshots", which is used to track income made before and after Roblox bumped the exchange rate up [1], which is described with some detail [2]. So it's not unlikely that there are other kinds of counters keeping track of income sources. Even so, there is still evidence for some sort of manual processing, at least up to last December [3].

[1]: https://devforum.roblox.com/t/the-robux-exchange-rate-and-mo... [2]: https://devforum.roblox.com/t/the-robux-exchange-rate-and-mo... [3]: https://devforum.roblox.com/t/holiday-schedule-for-the-devex...

[code_duck]

I had a blog or two that used Google AdWords circa 2008. I got very close to the $100 limit but never reached it - so Google just kept my $90. I wonder how many people and how much revenue that applies to.

[interwho]

I had the same issue, Google escheated the money to the state of Delaware (where they're incorporated) after a few years though. Consider checking Delaware's unclaimed property site, you may find your money there.

[tomnipotent]

> But to withdraw it, they need to have raked in roughly $1,000 worth of Robux

You can thank modern accrual accounting for this.

Roblox will be allowed to move money from liability to revenue based on a schedule using some sort of historical trends supporting the method. The higher the threshold, the higher their liability but also the more money that goes back to them long-term.

[spir]

These kinds of non-level playing fields are what the ethereum community hopes to replace with open protocols and non-custodial property rights.

[lupire]

But, as we see with NFT, it doesn't work.

[rib3ye]

It's obvious that the company is trying to create clear distinctions between hobbyists and professional devs. A low cash-out threshold seems like bait, where as a higher threshold discourages would-bes from thinking it will be easy money and filling the catalog with garbage.

Though I do concede... the catalog is filled with a lot of garbage.

[Stevvo]

Roblox is not comparable to YouTube.

When you make a video and upload it to YouTube, that creation is entirely the result of your own hard work and ingenuity. YouTube doesn't need to exist for your video to exist.

When you make a game in Roblox, you are combining some amount of hard work and ingenuity of your own with a larger amount of hard work and ingenuity by Roblox Creation.

If you want to keep all the money, then you need to do all of the work.

[FemmeAndroid]

> If you want to keep all the money, then you need to do all of the work.

The person you're responding to isn't even talking about the cut. It's the threshold at which you may take money out of the ecosystem. Both YouTube and Roblox take a cut, but with Roblox, even after the cut, you need to have made a substantial amount of money before you can see a penny of it.

[endisneigh]

By your logic unless Roblox corporation created computers they shouldn’t keep all the money, either.

I’m not sure why anyone would defend a dollar amount above $1. If you have money in you should be able to get it out immediately IMO.

[jerf]

I expect it'll need to be higher than $1 because there's going to be some legal matters to deal with around paying the legally-minor creators any amount of money.

To be honest, when I think about it that way, you're not going to get that far under $1000 no matter what you do. There's tax forms at the very least, and probably extra stuff to do with dealing with minors, plus generalized legal risk of being sued or investigated anyhow... we need to be dealing with more than a few bucks here before it's worth Roblox's time & risk. Some of this is the cost of protecting minors, too.

[endisneigh]

I don’t see why the amount matters. It’s a solved problem. All of it can be aggregated and forms can be sent once at the end of the year. It’s not like this stuff has to be manually dealt with. Computers deal with virtually everything.

[jameshart]

You’re definitely undervaluing the raw video encoding, transmission and delivery framework YouTube brings to bear there. Sure, you made a video. But that’s not the same as having a player that works in multiple browsers, support for multiple streaming bitrates and codecs, optimized global distribution and caching.. and that’s all before we get to the discoverability, hosting and channel management features.

[Talanes]

But with a video you have the portability to take your content somewhere other than Youtube for the supporting infrastructure. Your Roblox game is much less portable.

[jacobr1]

> When you make a video and upload it to YouTube, that creation is entirely the result of your own hard work and ingenuity. YouTube doesn't need to exist for your video to exist.

YT probably does need to exist for many creators to get the kind of distribution that enables them to monetize their content including the operationally managing the scale of the site, the brand they've built and the ad network. A highly viewed piece of content is generally much more valuable than unseen content. Which isn't to say you can't monetize video outside of YT, just the YT is providing a very valuable service and it isn't clear to me that is qualitatively of less value than what Roblox provides its content creators.

[ashtonkem]

Also, YT content creators and the YT algorithm are clearly affecting each other in complex ways. The content created for YT is tailored to succeed on YT, and would obviously fail on any other platform with a different recommendation engine and community.

[ashtonkem]

I mean, it’s not like YouTube content creators made YouTube, by your logic YT shouldn’t be paying its content creators either.

In reality the relationship between these platforms and the creators is a necessary and mutually beneficial relationship. The exchange in value between these parties should be in a format useful to both sides: cash.

[fshbbdssbbgdd]

I’d guess that more engineer-hours have gone into making YouTube what is than Roblox. At least, if someone’s going to express a strong claim about that, they ought to supply some numbers and not just an assertion.