Roblox M&A

Virtual Private Equity

Here is a fun story about the creator economy. A 19-year-old who made a soccer video game on Roblox with an anime vibe sold it a few months later for more than $3 million. Not to a big game studio like EA or Ubisoft, but to another Roblox game studio. Apparently this has become a legit business.

The old creator economy, the one that made YouTubers and TikTokers rich, was about monetizing influence. You build an audience, you sell them sponsored content, you get a cut of ad revenue. That's how MrBeast got rich. The new creator economy, at least on Roblox, seems to be about building and selling actual assets. These teenage developers aren't just influencers; they are founders, and they are getting acquired. Here is Bloomberg on the frenzy:

Like YouTube, Roblox started two decades ago as an online stage for young creators. Video-game lovers could use the service’s tools to develop inexpensive, low-resolution entertainment. Now, as the company grows toward 100 million active daily users, contributors are finding there’s money to be had in selling the games they’ve created, with buyers prepared to pay seven or even eight figures.

“We’ve seen a real shift in Roblox’s ecosystem,” said David Taylor, senior consultant at the video-game-analytics firm Naavik. In June, seven of the 15 highest-earning games on Roblox had been acquired from their original owners, according to his research.

What enabled this? A simple policy change. Until December 2024, Roblox officially forbade the sale of games between users. Then it changed its mind, and in doing so, it legitimized a secondary market and turned every popular game into a potential M&A target.

The market now has a familiar structure. On one side, you have young, often anonymous, developers who are incredibly good at making things that Roblox's massive audience wants to play. On the other, you have a new class of digital-native studios like Voldex Entertainment and Do Big Studios, which are essentially virtual private equity firms. They roll up hit games, professionalize their operations, and scale them. They strike licensing deals with the NFL. They conduct their business over Discord. They are buying low—sometimes for just one or two months of a game's revenue—and building portfolios. One deal for the game Welcome to Bloxburg was reportedly worth as much as $100 million.

This is all, of course, exactly what Roblox wants. As Voldex’s CEO, Alex Singer, said, “Roblox is very capitalist. The company wants creators to be economically successful.” And they are. The platform is on track to pay out over $1 billion to creators this year.

What’s fascinating is that while Meta and Apple spend fortunes trying to build a top-down vision of the metaverse, Roblox seems to have accidentally created a functioning, bottom-up digital economy by just letting teens do M&A.

Geopolitical Orbits

What do you do if your most important satellite internet provider is run by Elon Musk? Well, if you're Japan and the European Union, you start building your own. The two are teaming up on an expensive project to launch and operate hundreds of small satellites, creating a rival constellation because they are, it seems, worried about Musk. Nikkei Asia explains the strategic calculus:

U.S. President Donald Trump's "America First" policies have raised doubts about cooperation in the space sector. In the past, Musk threatened to cut off Ukraine's access to SpaceX's Starlink telecommunications system amid the ongoing Russian invasion.

Japan and many EU member states are allied with the U.S., but their reliance on Washington for information technologies related to security has highlighted vulnerabilities. Japan and the EU aim to work together in reducing dependence on the U.S. and developing their own industries.

The problem, for them, is that SpaceX has become too important. The company’s Starlink service, with its planned 40,000-satellite mega-constellation, is not just a commercial enterprise; it is a piece of critical global infrastructure. It is also controlled by one person who has shown a willingness to use it as a geopolitical lever. When you are a US ally and you watch the CEO of your primary satellite internet provider threaten to turn off service to another ally in the middle of a war, you might start thinking about building a backup.

But, well, this is easier said than done. SpaceX’s dominance is built on a massive head start and the revolutionary economics of its reusable rockets. Its Starship program, despite its recent string of spectacular explosions, aims to make launching things into space even cheaper. The scale is daunting: SpaceX has plans for over 40,000 satellites; China is aiming for 10,000. The joint Japan-EU plan is for a few hundred.

So this isn't really about creating a better Starlink. It's about creating a not-Starlink. It is a diversification strategy, a geopolitical hedge. It is a very expensive insurance policy against the whims of a single, powerful, and unpredictable CEO. Which, you know, makes sense.

The Scoreboard

• AI: Google hires Windsurf CEO Varun Mohan, others in $2.4 billion AI talent deal (CNBC)
• AI: OpenAI Delays the Release of Its Open Model, Again (TechCrunch)
• Semiconductor: Us Senators Warn Nvidia CEO About Upcoming China Trip (Reuters)
• Fintech: Lloyds in Talks to Buy Fintech Firm Curve for £120M, Sky Says (Bloomberg)