“You’re becoming an ambassador for a brand,” Ben-Shabat said. “Your avatar can go between different games, and show up as a representative of Gucci, for example,” she said, noting that, “right now everyone wants to be an influencer.”

Avatars wearing brands from space to space has big potential, according to Niedermeier. Because, if the metaverse evolves in ways that are being forecast, avatars don’t have to stay within one world — they can potentially jump from platform to platform. “That’s one of the huge values to brands,” he said.

Additionally, virtual items can translate to real-world money. Last May, Gucci offered a limited-time, digital version of its Dionysus Bag with Bee through its Gucci Garden exhibition. The bag sold for around $6, but when people started flipping the product its price went up. One user paid around $4,115 for the digital purse, while the actual, real-life version of the bag sold for $3,400, according to reports.

So while brands are creating hype and brand awareness on the platform they could potentially be accelerating sales. And those digital purchases come with high margins because, as Niedermeier states, there’s “no holding costs. There’s no manufacturing costs. There’s no distribution costs.”

Creating and consuming, simultaneously

While companies with name recognition are building out Roblox as a channel, everyday users are also generating income from selling digital items. The developer community earned $538.3 million in 2021, exceeding the company’s goal of $500 million.

Roblox was launched as a way for people of all ages to generate their own worlds, as a “co-experience platform.”

There are reports as to how some young creators have experienced wild financial success through Roblox, and others on how it eludes them.

The thing to note, though, is that users are both creating and consuming content through Roblox. Brands should understand that co-creation is foundational to how a generation of young people are approaching a digital experience. And that may set the tone for future marketing.

“This is tapping into something that is so fundamental for Generation Z, which is their creativity,” said Ben-Shabat. “This is a very creative generation. They grew up with access to digital tools that no generation has before them.”

Having an audience co-create digitally may give retailers a deeper understanding to how products may operate in reality, and inform real-world product design, according to Niedermeier. “They can crowdsource products without having to actually produce them. It just exists in this virtual world, which then could translate into — at some point — into real-world products.”

The potential challenges

While creating an experience that is tailored to a young audience may appeal to brands, it does come with some potential drawbacks. Namely, what’s the best way to navigate a space that is primarily used by kids?

Roblox is aware of the potential complications, and enclosed language in its S-1 filing to address it. Namely that the Children’s Online Privacy Protection Act applies to its operations, as it imposes requirements on operators of websites that are directed to children under the age of 13.

Retailers need to keep in mind that, while Roblox is predominantly a platform for kids, it also is a multi-generational social community, according to Mark Geden, head of strategic planning at Tribal Worldwide London. It “contains all the peer pressures, low levels of moderation and risks of predatory activity that can be found elsewhere,” he said in emailed comments, noting that it presents a degree of inherent brand safety risks.

Other experts agree about moving forward, but with care.

“I think retailers should be moving with some caution, and largely because the platform is dominated by minors and children,” Niedermeier said. But, he says, those brands that are “at the cutting edge and want to stay at the cutting edge are not coincidentally the first ones getting into this space.”

Roblox addressed some of those concerns in a letter to shareholders released Tuesday. “[W]e must maintain the community’s trust. And to do that, our platform must be safe and civil. Since our founding, safety and civility have been at the foundation of everything we do and we will continue to invest substantial resources to improve on this key priority.”

The company is also making moves to expand its engagement with older users. It named attracting users in older age demographics as one of its “key objectives.” CEO Baszucki in the company’s recent earnings call noted that in January its 17- through 24-year-old segment grew 51% year over year, stating that it was “a wonderful validation of our vision to bring people of all ages together on our platform.”

While co-creation is fundamental to the platform, it does mean that retailers have to give up some brand control as users expect for interactions to be collaborative.

But, that may be part of the larger future of how brands decide to market to their future customers anyway. Especially with a generation that holds community, creation and competition in high regard, according to Ben-Shabat.

Roblox “shows a very strong understanding of who this generation is, because it plays on all these elements,” she said. “This is going to the heart of the psychology of this generation.”

Finally, there is always the risk that users simply decide to abandon the platform because one that is more compelling arrives on the scene. Roblox understands that risk, stating that because a majority of users are under the age of 13, the demographic “may be less brand loyal and more likely to follow trends, including viral trends, than other demographics.” Young people are ripe to change means of entertainment rapidly.

Yet, tens of millions of active, daily users on the platform means Roblox currently has a significant place in many users’ lives.

“It’s the Wild West,” Niedermeier said. “And these things are going to continue to be moving targets. This is for the edgy marketers who have the stomach to roll with these changes.”