Roblox, the $50bn online gaming company with a devoted pre-teen following, said it was rebuilding its platform in China after taking down its Chinese app last month.
The “LuoBuLeSi” app, which it launched in partnership with Chinese gaming giant Tencent, was taken down in December just five months after it was released.
On Friday, Roblox said it was making “necessary investments”, including to the way data is processed in its games, as a part of a “number of important transitory actions”. It said it would build another localised version of its platform. Tencent declined to comment.
Roblox’s attempt to crack into the Chinese market of 720m gamers formed one eye-catching part of its initial public offering prospectus for its New York stock exchange listing in March 2021.
The company secured a highly prized and difficult-to-obtain regulatory licence through its partnership with Tencent to roll out a China-specific version of the platform with stricter censorship rules for game developers and an emphasis on education rather than entertainment.
But its efforts so far have come up against stiff competition and regulatory barriers.
Gamers in China complained that they had no warning that Roblox was going to take down its app. “It’s outrageous, it just shut down in an instant with no warning,” said one gamer on Bilibili, a video-sharing website.
Analysts warned that Roblox’s user-generated content model — whereby players develop their own in-game content — presents a challenge for China’s strict content regulators.
But Chenyu Cui, a gaming analyst at the research company Omdia, said Roblox’s difficulties in China are also in part a result of it pitching itself as an educational tool, a strategy originally conceived to win favour from Chinese parents.
Cui said the regulations on education companies have been “much stricter” since Beijing’s move last July to curb the private tutoring sector.
Only a month later, Beijing moved to restrict young people to playing online games between 8pm and 9pm on Fridays, weekends and public holidays, delivering a further blow.
Cui said that Tencent and Roblox will have to apply for another licence if they plan to launch a new version of the platform, noting that they could be waiting until the end of the year due to a backlog of games waiting to receive regulatory approval.
Meanwhile, Roblox faces growing competition from Reworld, a Chinese platform that also hosts games made by its users on its platform. The rival platform has garnered investment from TikTok owner ByteDance, as it moves into gaming to challenge Tencent’s dominance in the industry.
Roblox’s share price has fallen 39 per cent since the China app went offline, while the company reported slowing growth in its global number of daily active users and time spent on the platform.