Roblox loses $150 Million during Silicon Valley Bank collapse

Roblox has lost roughly 5% of its total reserves stored in the Silicon Valley Bank during the regulator’s crash. The company disclosed in an SEC filing that the gaming platform owned about $150 million of those funds.

The platform has been a huge success lately, having around 60 million daily active users, half of whom are teenagers and children under 13 years of age. Those who use the platform can build various games and play those created by others.

---

Roblox funds dip after Silicon Valley Bank crash

News of Roblox losing its funds arrived recently this month after Silicon Valley Bank was abruptly shut down. In the midst of a severe crisis that caused the 40-year-old financial institution's stocks to drop more than 60%, regulators shut it down.

One of the numerous software businesses impacted by the consequences of SVB's shutdown last week is Roblox, which is now asking the government for assistance in accessing funding.

This isn't the first time that the company has faced such a financial dip. It reportedly lost over $300 million in the last quarter of 2022, and over $900 million overall last year despite witnessing massive growth in its user base.

---

Roblox to receive lost funds in SVB from US government

Following the failure of Silicon Valley Bank, Roblox is expected to receive compensation of $150 million. The US Federal Reserve previously promised to support all SVB clients, including multibillion-dollar firms courting controversy like Roblox Corporation.

Although the government normally has a maximum on bailouts set at $250,000, the Federal Reserve will compensate the company's $150 million loss.

In a statement by the SEC, the platform wouldn't be badly affected by the recent turmoil, they concluded:

“Regardless of the ultimate outcome and the timing, this situation will have no impact on the day to day operations of the company.”

---

Officials stated at the 2017 Roblox Developers Conference that the platform's developers, numbering over 1.7 million as of 2017, earned at least $30 million in 2017. In November 2019, the iOS version of the platform surpassed $1 billion in lifetime sales. It will earn $1.5 billion in June 2020 and $2 billion in October 2020, ranking it as the second-highest-earning iOS app.

Meanwhile, the top games had over 10 million active monthly players as of May 2020. At least 20 games have received more than one billion plays as of August 2020, while around 5,000 have received over one million. With sales of $2.29 billion, it overtook Tencent's PUBG and Honor of Kings to become the third-highest-grossing game of 2020.

The platform is free, and in-game purchases are made using a virtual currency called Robux. About 164 million people use the platform every month as of August 2020, including more than half of all US kids under the age of 16.

The platform lets users create, buy, and sell virtual goods used to customize the virtual figures they use as their platform avatars. Several people work full-time designing products, with the highest-paid designers earning over $100,000 annually from item sales. Only users with a Premium membership are able to trade or sell items with a limited edition status.