Roblox is coming for creators’ brand integration dollars.
Starting next year, Roblox will begin charging creators a fee to publish brand integrations inside their virtual experiences, with payments scaling based on the experiences’ user traffic and engagement. Over the past week, Roblox executives have met with a range of key stakeholders across the ecosystem of the company’s user-generated gaming content platform to inform them of the upcoming change, according to six sources who work within the space and are familiar with the conversations, all of whom requested anonymity to avoid damaging their business relationships with Roblox.
In an interview with GamesBeat, Roblox vice president of global brand partnerships and advertising Stephanie Latham framed the policy change as part of a broader announcement that the company has been working on for the past 18 months intended to clarify its definition of brand activity, expand access to ad formats and give creators more tools to work with brands. She said the goal of the updated policy is to take the responsibility off of creators to ensure that every encounter on Roblox is both transparent and age-appropriate.
“This really is not about revenue at all,” Latham said. “It’s about evolving our responsibility to our users, creators and brands. Brands are already part of everyday life on Roblox, and this is a strategic response to the increased commercial intent that we’re seeing every day on the platform.”
Roblox’s upcoming policy change represents a marked shift from the company’s past approach to brand integrations. Until now, Roblox has allowed creators and agencies to sign independent advertising deals and publish branded content without paying any additional fees to the platform. The updated policy also signals that Roblox has diverged significantly from other creator platforms like TikTok and YouTube in its approach to branded content — the equivalent of YouTube charging creators by the view to publish videos containing ad reads or sponsor logos.
Roblox creators who generate significant revenue through brand integrations are incensed about the company’s impending policy change. In their view, Roblox is taking additional money out of creators’ pockets without providing more value in return. Creators already give Roblox 30 percent of all revenue from in-game purchases, and have long viewed brand deals as a way to build incremental income without paying another tithe to the platform.
Latham told GamesBeat that Roblox’s updated brand integration policy is meant to create a “win win win flywheel” for all stakeholders in the ecosystem, because standardized policies help brands feel more comfortable spending their ad dollars on Roblox.
“By standardizing how we measure and label ads, we’re able to transform one-off deals into a scalable ecosystem for them, so creators can charge what they’re worth on the platform, and we, Roblox, handle the complexity of all the global compliance,” she said.
Legal questions
By launching a branded content tool that requires Roblox to be involved in all brand integrations published on the platform, Roblox risks making it difficult or impossible for creators to maintain fully independent relationships with advertisers — which could be interpreted as a violation of California’s Unfair Competition Law.
“If there’s essentially a ban on having an independent relationship with marketers, that definitely wouldn’t fly,” said Emmanuel Hurtado, an associate at the law firm Stubbs Alderton & Markiles, LLP, in an interview with GamesBeat. “What I could see Roblox pivoting to, if there was any concern about it, is that they could just have this portal and quote-unquote ‘incentivize’ developers to go through it by offering perks.” (Disclosure: GamesBeat has worked with Stubbs Alderton & Markiles, LLP, in the past.)
A Roblox spokesperson denied that the policy update would violate California’s Unfair Competition Law, framing the company’s updated brand integration process as “specific rules in place to ensure the safety of what shows up on our platform.”
“Safety is a priority on Roblox, and we are ensuring that promotional commercial content is properly disclosed to our users,” the spokesperson said in a statement emailed to GamesBeat. “In addition, we are moderating this content to ensure it is delivered to appropriate audiences, and providing additional services such as in-house aggregated ad measurement.”
Trust and safety are one way for Roblox to explain its upcoming policy update, given the potential improvements around the platform’s ad standardization and child safety that could result from its increased oversight on brand integrations. Roblox could argue that the money it receives from its branded content tool is necessary for the company to adequately staff its child safety and ad quality control teams, according to Ray Seilie, a lawyer at the legal firm Kinsella Holley Iser Kump Steinsapir LLP, in an interview with GamesBeat.
“This is a new policy that’s being rolled out through some verbal discussions with Roblox staff,” Seilie said. “The devil is always in the details, when it comes to evaluating a particular practice for anti-competitive effect.”
Legal implications notwithstanding, Roblox’s policy shift risks alienating creators and their brand partners — and pushing them to other user-generated content platforms like Fortnite. The situation is somewhat reminiscent of Twitch’s June 2023 update to its branded content guidelines to limit the size of in-stream logo displays and ban “burned in” video ads, which the livestreaming platform walked back the next day after an intense backlash from the Twitch community over the policy’s potential negative impact on creators’ income.
“For all they talk about being for their community, for their users, their developers — this just surely can’t be through that lens, because there’s no other platform that I know of that taxes deals that creators do directly with a brand,” said an anonymous industry stakeholder familiar with the upcoming policy change.
Capturing ad spend
Roblox’s upcoming policy change comes amid the company’s push to sell more of its homegrown ad products, including Portals, which appear inside Roblox worlds and can teleport users directly into branded experiences. Part of Roblox’s sales pitch to advertisers is that Portals are one of the best ways to guarantee traffic and engagement inside their branded experiences.
But creators integrating brands into their popular experiences with pre-existing traffic don’t need Portals to effectively guarantee a certain amount of engagement for their partners, making Roblox’s ad product unnecessary for some advertisers. Furthermore, branded worlds are a decreasingly popular marketing strategy on Roblox, with the number of brand integrations inside popular experiences superseding the number of brand-owned worlds on UGC platforms for the first time last year.
Thus far, Roblox has been relatively light on the details of its upcoming policy change in its conversations with companies in the space. Although it’s clear that Roblox plans to charge creators a fee for publishing brand integrations inside their experiences — and that this fee will scale based on engagement — the company has not yet revealed exactly how it plans to calculate this fee, nor when exactly it plans to officially roll it out.
Roblox is still in the process of determining the specific pricing structure or percentage cut it takes from brand integrations on its platform, with plans to continue meeting with creators to hash out the details. Since the new policy will not be implemented until 2027, Roblox does not intend to for it to affect any deals that are currently in progress through the current calendar year, per Latham.
“The spirit of bringing them all in to talk through it is to ensure, over the next couple of months, that we land on a place that does extract the most value for all,” she said.
Details notwithstanding, Roblox creators are on high alert after meeting with the platform’s staff this week — and they fear that smaller creators without the funding or revenue to absorb the extra fees will be negatively impacted first and foremost.
“Instead of building a more compelling ad product, Roblox is choosing to take money out of their own creators’ pockets in a move that will not only frustrate them and raise prices, but drive brands to Fortnite, Minecraft and similar platforms as a consequence,” said another anonymous UGC industry observer familiar with Roblox’s upcoming policy shift. “A 40-billion-dollar company risking the tens of millions of brand dollars in its ecosystem for a small blip on their P&L — penny wise pound foolish has never been such an understatement.”