Roblox Corp. jumped after the gaming company announced plans to introduce ads into the virtual worlds created on its platform next year.
Adding immersive ads has been a “dream” for Roblox for 15 years, Chief Executive Officer Dave Baszucki said at the company’s developers’ conference on Friday. Roblox has had lucrative partnerships with the likes of Ralph Lauren, Chipotle and other top companies to offer users branded games, virtual concerts and items. But the plan is to go even further, for players to be able to interact with advertisements inside of games, including ones that function as portals, taking gamers to branded zones, Baszucki said.
The shares rose 8.77% to $45.53 on Friday in New York.
Roblox has been talking about introducing advertising for months as a way to boost revenue from games that are largely free to play. The company generates income through the sale of in-game currency, called Robux, and takes a cut from money spent within games on user-generated content. But introducing advertising on Roblox has been controversial because most of its users are younger than 18. In April, advertising watchdog Truth In Advertising sent a complaint to the US Federal Trade Commission arguing that “Roblox has failed to establish any meaningful guardrails to ensure compliance with truth in advertising laws.”
Baszucki emphasized that initial ad partnerships will be selective.
In other online immersive worlds, like Decentraland, branded spaces are relatively unpopular. However, in the popular game Fortnite, integrations such as branded costumes from popular names like Walt Disney Co.’s Marvel have been a hit.