Welcome to a new episode of the opening bid podcast. I'm Yahoo Finance executive editor Brian Sai. Like I always say, this is the podcast that will make you a smarter investor, period. We're gonna have some fun on this podcast. Recent episodes we were talking about the economy. We're talking to some strategists. We were talking about potential bond market crisis. I wanna have a little fun. Uh, it's the summer, and to that end, I want to bring in Roblox CEO Dave Bazuki. Dave, good to see you. It has been, uh, quite a while. Your platform has come a long way since we last spoke, so good to see you.

Hey, it's great to be on the program, and I'm glad that you put us in the fun category. Yeah, I mean,

it's, it's gaming, but you guys do. I mean, you're in the market for fun, right? And right or wrong here.

Well, we're, we're in the gaming space right now, and the gaming market is huge. You know, we, we've shared that the gaming market's a $190 billion market, and we have the goal of having 10% of that run on our Roblox platform. And, you know, as you saw last.Quarter we made great progress in that direction.

Take us through some I love your earnings reports, Dave. You put out a lot of stats, a lot of figures. For those perhaps not as familiar as I am with your earnings calls, your financials, how big is Roblox right now?

Yeah, I, at first I, I'd like to welcome, uh, any of the retail investors who are Roblox fans as well. So welcome to this. Um, you know, we had, we had a huge quarter last quarter, our bookings were $1.2 billion in a three month period. That was up 31% year on year. Uh, there's last quarter we reported 97.8 million daily active users.On the platform, which is, which is enormous as well. And uh the platform's growing in all ages, you know, our older users now, we started as a younger platform, our over 13 users were growing 36%, uh, last quarter. So this is a really big platform and at the same time, we're still roughly 2.5 to 3% of the gaming market where we said we, we want to get to 10%.

Dave, of course we have a really big retail following here at Yahoo Finance is why we wake up every day to help retail investors understand this market. I mean, do you have a large retail following you think from an investor's standpoint over at Roblox?

Well, we, we know we have a large institutional long following, and I hang out with those long investors who are, you know, interested in Roblox, I believe, because the gaming space is so large and becauseMaking technical innovation where more of the gaming market can run on Roblox. Anecdotally on the retail side, my knowledge there is more anecdotal. Friends, neighbors, people I run into, say, hey, I'm invested in Roblox, but I don't know the size of the, the retail following.

So what Roblox is trying to do in its very simplest form is simulate reality at scale. How are you doing that?

When, when you think about the evolution really of how we communicate as people, we've gone all the way from the telegraph system to the phone system, to video communication that we use in the midst of COVID. Gaming has been a little ahead of the game for a bit. Gaming innovated 3D playing together, 3D connection, 3D communication, and we believe this is, is really an early sign of something really.Really big. We think people will ultimately use 3D connection, not just for playing, but for learning, for shopping together, for going to concerts together, even for, um, maybe someday the next time we get together, we'll have a 3D interview rather than a video interview. And at the same time, the technology is very early. Uh, there's an enormous runway for this type of technology right now.Many games are not available on Android, you know, there's different builds on Android from PC, from console. There there's many times when we play a game, we can't play it instantly. So we believe there's a huge technical opportunity in the gaming space to provide better technology and infrastructure. And we think a lot of, um, you know, we're working on that, and we're really excited that that's gonna drive our growth in the gaming segment. Why

doyou think?Why do you think me metaverse has largely been a bust, but then I look at what you're doing here at Roblox, Dave. I mean, your, your daily active users are Dow, as they say here over in the Internet Media land, almost 100 million. your watch time is up, your bookings are up double digits. What are you doing correctly?

Well, well, I wanna, I, I do wanna, uh, give a shout out to Meta for both their work on the quest, which is a VR headset, and also their work on their Ray-Bans, which is an AR, um, set of goggles that act or glasses that actually have a pale. So they're, they are pushing it and innovating there. On our end, you know, over the last couple of years, we've focused on a few really big things. We focus just on the raw scale and performance ofRobloxs. We've focused on the economics of our platform. Our creators are earning more and more and more. We have three creators on the platform who are now running at, uh, roughly a $50 million a year run rate. We have over 100 creators who are running at roughly a million dollars run rate. So the economics are getting better on Roblox for great new creations. Uh, it's, it's.Easier to find great new stuff on Roblox. Uh, right now, you know, Grow a Garden has come out of nowhere and been self-discovered on our platform. Last summer there was an amazing property called Dress to Impress that just went viral on Roblox. The Discovery is working better as well. So all of these things are, are coming together to fuel growth on our platform.

Do you think the metaverse ever lives up to its future potential, or is it being hamstrung?Because hardware is not where it needs to be yet.

Well, I would say, um, a, a fun thing in sci-fi is typically, if we can imagine it someday we are probably going to see it. And I, I remember when I was really young in the cartoons back then, for those of you that might not remember, when I was young, we, we had cartoons printed in books and magazines, and there was a Dick Tracy.Watch. And it was a watch where it seemed unbelievable. You could watch TV or use it to communicate. So I have a Dick Tracy watch. And I, I remember when I used to watch Star Trek, and, uh, they had this thing called a tricorder that could do things. And now I have a, I have a tricorder here. So I do feel, let's give it time. We are ultimately gonna see that hardware.That can support what you call the metaverse, what sci-fi writers have talked about, get better and better and better. We're already seeing that hardware get better. Um, the, the philosophy of Roblox is, we think 3D runs everywhere. It runs on phones, tablets, computers, consoles, yes, VR headsets, ultimately other devices as well. So I do think we're gonna getthere.

Are you wearing the Dick Tracy watch? I, I, I remember that.

Yeah, well, I think our smart watches today. OK,

I didn't know if you had an authentic Dick Tracy watch. I always wanted one of those growing up. Well,

I, I think I now that you say this, I'm gonna go and see if there's an official Dick Tracy watch face that I can put on my smartwatch.

Remember Dave, the, uh, I'm, I'm from the Knight Rider camp. Remember when Michael Knight would talk into his watch and the car would come.I guess we could do that with Teslas now, right?

Oh yeah, like if, um, basically, if it's not impossible by the laws of physics, what we see in past sci-fi or or past movies, we're gonna ultimately see that come to reality. The the the web, the internet was predicted, um.We sci-fi has predicted robots, sci-fi has predicted AI. We're in the midst of that as well. So, um, I, I do think we're gonna see ultimately the holodeck. We're ultimately going to see a more immersive, what we call metaverse. Why do you,

why do you think Roblox's platform has been so sticky? And by that I mean you go back to the history of, of gaming. I remember playing games on, on Meta. I remember with Farmville when that came out. I remember the console games I played as a as a kid.So there's always been these booms and bust period, but there, but there appears to be stickiness to what you're doing.

There, there is a lot of stickiness on Roblox. We, we've been doing this for over 15 years now. Every year, Roblox has grown. Every year, the quality of the creations on the platform has gotten better. And every year the studios that areare making, have gotten bigger and bigger and bigger. What what's interesting behind the scenes is the thousands and thousands of individual technology improvements we're constantly making on the platform. Creators can make an experience one time. Uh, now that experience will autotranslate into any language. That that experience will run on anyDevice. We're um behind the scenes. We have a very robust safety and civility and policy engine. This is allowing uh older people to play on the platform, and we're seeing a much bigger variety of content now. We are seeing licensed content, uh, for exa for example, NASCAR has gotten together with Driving Empire. Um, theNFL is now hosting NFL Universe. We see SpongeBob, uh, connected with Tower Defense. So we're starting to see more, more content that's appealing. So all of these things are, are really creating an ecosystem for better content, a wider range of people all around the world.

Quick Yahoo Finance, fun fact before we go off for a quick break. Shares of Roblox up 163%, uh, over the past year, trading at a record high. Hang with us, Dave. We'll be right back on opening bid.All right, welcome back to opening bid here at the NASDAQ in Times Square. Uh, at the top of the episode, I promised you some fun. I've been talking to a lot of economists talking about a lot of crises. Uh, I just want to have some fun. I mean, it's a summer, so we're gonna continue our conversation with Roblox CEO Dave Bezuki on the future of gaming. So you mentioned Dave, an interesting trend. I always thought Roblox, and you mentioned this in your annual report, not 9 kids 9 years and younger, 9 years old and younger are on the platform.But you're starting to, what appears to be aging up or getting some older kids or teens on the platform. Why is that starting to happen?

Well, as you mentioned, over 62% of our DAUs are now over 13. That was not true a long time ago. Gaming is universal. Gaming is fun for older people, for younger people, you know, someday I'll probably be um playing games when I'm, you know, 70, 80, 90 still, and what you

are Builderman, you are known as Builderman, right, Dave, correct?

That's right.So, so what, what we're seeing is more content that's appealing to older people come to the platform. Dress to Impress is a great example of this. It, it came on the scenes virally. Dress to Impress is a fashion game on Roblox, where, where we dress up and then we participate in a, in like a runway show. We vote on each other's outfits. The last summer, there were viral videos.of college students playing this in class. There were, you know, there was a, a meme of older people that traditionally were not on Roblox coming to the platform. So as we provide the technology foundation and the economics and the search and discovery, we're continuing to see more and more great content that is appealing to people who are over 13.

Are you playing a lot of this content? Do you have any time, do you find time to do any of this?

I wish I had more. Literally the other day, I was planning a 1 day Roblox playathon for myself cause it's, I, I have to schedule a full day just to go through the top 100 properties on the platform, otherwise I.You get wrapped up in engineering and other things. Well,

so what is to that end, I, I can't think of more companies on the pulse of AI, you know, I talked to a lot of companies doing enterprise AI and agents, but I see your business model, Dave, and I have to think, wow, why do we need, why are we going to need gaming coders, uh, in a year or two? I, I, I, I have to imagine AI eventually takes all these gigs.

I'm very optimistic and, and at Roblox, we see AI as a human acceleration technology, not a human replacement technology. And, and both within our company as well as in the creative community, we see it a little bit more akin to the transition from oil painting to Photoshop, where more people today can create graphics, more of what weencounter in the world has high quality 3D imagery than it would if all of us were using oil paints to build our power points. So the same thing we think is gonna happen in Roblox. I would highlight behind the scenes, we are running hundreds of AI models that we have developed, um, you know, behind the scenes for trust, for safety, for civility. We are now those starts.to bring forward some of those models that are more around creation. And in Q1, we announced generative 3D inside of Roblox, which is the first step in really, you know, you or I being creators. You, you or I could go in and create fashion by talking about it someday. You or I someday we believe we'll be able to make a game by describing it or sketching it. So we are, we are all in.In 3D, uh, generation as part of the platform, and we do think we're going to see new types of games. Uh, games traditionally have not had unlimited 3D generation available to them at any point in any time. We're gonna see this as part of, uh, games on Roblox, and that includes synthetic avatars, that includes people creating on the spot and a wide new range of gameplay types.

It seems like what you're doing is light years away from some of the more traditional gaming companies. I look at electronic arts take two. I'm not going to sit here and say they're not using AI, but they are, the way I think about traditional gaming publishers with publishing houses, lots of humans in there. I mean, AI has to, we really have to be on the cusp of fundamentally changing how we consume a video game, no.

I think there will be fun we we believe in one of our, our reasons for supporting the thesis that 10% of gaming will run on Roblox.is we do believe the technology innovations we're making, running a 3D cloud for gaming, having a low latency, high performance client on any device, joining any game instantly rather than downloading it, having the same game run on a low-end Android and a high-end gaming PC. We do think the market is, is ready for that type of innovation. I do think.I think there's still gonna be a lot of people involved in creating games. We, the larger studios on Roblox, I believe, are gonna be creating higher quality properties. Um, we don't, we see more of our internal engineers working on our AI platform and then being more efficient in the way that they write code, but we're not necessarily thinking our internal engineers are gonna be replaced or the creators on our platform.

A lot has been written in the past, Dave, about what Roblox is doing to protect children on the platform. Some of it has been critical of the company. Some of it has been, uh, complimentary of Roblox. What's the latest? What are the latest safeguards Roblox has in place to protect kids 9 years and under or even teenagers from consuming things they shouldn't be consuming?

We're, we're really glad we started as a younger person's platform, and that seems a little counterintuitive, but in doing that, we've, we've worked on some very, very difficult technical problems and made some amazing technology advances over the last 15 years to the point where today's safety is literally built into the platform.Every image on our platform, every piece of 3D content, every text communication on the platform goes through computer and AI augmented filtration. We are, we're literally shipping new safety advances every week, and we're forging ahead not just in the under 13, as you said, we think the new critical area is gonna be 13 through.17. And we think that is still a, a special age for young people, and there should be some, some very thoughtful technology around who they communicate and how they communicate. So over the next month or two, you'll see us, uh, bringing forward some new innovations in that 13 through 17 space to augment everything we've done throughout our safety platform.

Canyou share one or two of them, Dave?

Well, we think we're gonna have various general types of connections on the platform. So we, we think for people you know in real life, we may treat your ability to communicate a little differently, so stay tuned on that, but really our friend graph is gonna get much more intelligent.

Alright, the last couple of minutes of the uh podcast, Dave, we always love to get hot takes, so I wanted to get, I want to put two different questions to you. One,Not many leaders I get to talk to that have their brother on the board. Your brother Greg is on the Roblox board. Does he ever give you any crap? I mean, how is that interaction like been through the years?

Um, I, I actually feel having a brother, the job of having a brother on the board is the, the person who can give you unlimited crap. And so,In that sense, I feel it's, it's a huge advantage because he doesn't pull any punches and he keeps it real. So I, I think it's a, it's a huge benefit.

All right. And the next one is this. So I went to your annual report. I haven't seen something like this before, so I'll put this to you. It says halfway down it says, quote, We do not maintain.Key man life insurance for Dave Bezuki and do not believe any amount of key man insurance would allow us to recover from the full harm to our business if Dave Bezuki were to leave the company for any reason. That is a bold statement that not a lot of companies put it in. I mean, as a co-founder.How do you think about succession? I mean, given how important you have been to Roblox?

Well, first I'm flattered if that like means I'm irreplaceable or something. I haven't seen that line, so that's an interesting thing. So thank you for sharing it. I, I would, I would say I I love running Roblox and so there's a, there's a thoughtful long term, you know, balance, but right now we're all in here. I'm all into the company and I would say.Simultaneously, we have such an amazing executive team with, we, we literally, each of our groups are essentially trying to train CEOs of those groups and give them a lot of autonomy. So we have a very deep bench as well.

Big new hire in Naveen Chopra, uh, someone I know well, covering his entire career at Paramount. I mean, what do you think he is going to bring to the table? He has really has an interesting experience, a lot of time in media.

Well, first, I want uh my thanks go out to Mike Guthrie. We just had the most amazing, as you said, fun ride together when an IPO is just a little gleam in our eyes and also appreciative of Mike and the way he's handled this transition as he, he goes on to do personal and other things. Naveen is interesting and both from an ethical and just being a great person standpoint, it is.need to have a CFO who also studied computer science. And I don't know what that exactly means, but I think we're gonna have some fun with, with his background as he comes in and starts running finance

here. When I think big time CFO, I think about uh Naveen Chopra, and I also think about uh Roblox CEO Dave Bezuki, big time. Uh, good to see everything you're building there at Roblox. Good to hear about those safety protocols for children. I know it's always a key focus for you and your company and amongst.Dave Bezuki, we'll talk to you soon. Don't be a stranger.

Great seeing you. Thank you very much.

All right, uh, that's it for the latest episode of Yahoo Finds his opening bid podcast. Continue to hit us with all the likes and thumbs up on all the podcast platforms, YouTube. Love your comments. If you are curious about anything that Daveizuki just told me, hit me hit me up on X at Briansazi. Hit me at the comment sections. I'll answer all your questions because that's what I do every single day of my life. We'll talk to you soon.