Roblox, which went public in March having reached a $45 billion company valuation, has been making a lot of noise in the music business in recent months.
The kids’ gaming phenomenon secured an eight-figure investment from Warner Music Group as part of a $520m funding round in January, and has also served as a large-scale virtual concert platform for superstar artists like Lil Nas X and Zara Larsson.
Now, the company, whose Average Daily Active Users (DAUs) rose to 43 million in May, has inked a strategic partnership with Sony Music Entertainment (SME).
This new agreement comes just two weeks after Roblox inked a deal with BMG, but also comes just a month after it was hit with a $200 million-plus copyright infringement lawsuit from music publishers in the US.
Spearheaded by the National Music Publishers’ Association, the suit was backed by indie and major publishers such as Concord, Downtown, Kobalt, Hipgnosis, Reservoir, and Universal Music Publishing. Roblox responded the following day, noting its “surprise and disappointment” at being sued.
Under the agreement with SME announced today (July 6), Roblox and Sony Music say that they will work together to develop “innovative music experiences for the Roblox community”.
These opportunities, according to the companies, will “offer a range of new commercial opportunities for Sony Music artists to reach new audiences and generate new revenue streams around virtual entertainment”.
The agreement builds on an existing relationship between the two companies that includes previous collaborations such as Lil Nas X’s hit virtual performance on Roblox in November 2020 and more recently the Zara Larsson Launch Party on Roblox in May 2021.
Over 36 million people watched Lil Nas X perform the first-ever live virtual concert on Roblox, which included the debut of his song, Holiday.
In addition, the concert venue included virtual merchandise sales, mini-games, a scavenger hunt, an exclusive behind the scenes interview with Lil Nas X, and other interactive activities.
Zara Larsson’s launch party, meanwhile, attracted over four million visits, the highest recorded visits for a launch party on Roblox to date.
The Dance Party took place in and around a virtual rendering of Zara’s Swedish lake house and featured mini games, interactive challenges, and exclusive virtual merchandise sales.
According to Roblox’s key metrics published for May 2021, the platform’s daily active users (DAU) were 43m, up 28% year-over-year and down 1% from 43.3m in April 2021.
Hours engaged on Roblox in May were 3.2 billion, up 9% year-over-year and up 1% from 3.2bn in April 2021.
The company’s revenue is estimated to be between $149m – $151m, up 123% – 126% year-over-year.
“With this new agreement, we look forward to expanding our successful partnership with the Roblox team to further unlock commercial opportunities at the intersection of music and gaming.”
Dennis Kooker, Sony Music Entertainment
Dennis Kooker, President, Global Digital Business and U.S. Sales, Sony Music Entertainment, said: “Sony Music artists have been at the forefront of engaging the millions of music fans in Roblox’s massive user community with forward-looking initiatives like Lil Nas X’s industry-first virtual performance on the platform, and Zara Larsson’s recent listening party event.
“With this new agreement, we look forward to expanding our successful partnership with the Roblox team to further unlock commercial opportunities at the intersection of music and gaming.
“Immersive online environments represent a meaningful opportunity for reaching a growing number of fans who want to use virtual communities to enjoy shared music experiences.”
“Sony Music has been a fantastic partner and I am pleased to deepen and lengthen our relationship.”
Jon Vlassopulos, Roblox
Jon Vlassopulos, Vice President and Global Head of Music, Roblox, added: “Sony Music has been a fantastic partner and I am pleased to deepen and lengthen our relationship.
“They truly understand the massive opportunity that the metaverse presents for their artists and we are committed to helping them unlock new creative and commercial opportunities on Roblox.
“We are just scratching the surface of what Roblox can deliver to the music industry and to music fans around the world.”Music Business Worldwide