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Snap, Newborn Town, Reworld, Match Group - Who Will Be the Next 'Roblox'

HONG KONG, CHINA / ACCESSWIRE / July 20, 2021 / In this March, Roblox (RBLX.NYSE) went public on NYSE and was hailed "the first Metaverse stock". On the first day of trading, Roblox topped a market cap of USD$45 billion, outpacing the combined market cap of two established game developers - Ubisoft (UBI.PA) and Take-Two Interactive (TTWO.NASDAQ). It is not surprising that Metaverse has become a hot spot for capital markets in 2021.

Metaverse is a concept that developed from the rise of the internet, virtual worlds, and technology such as augmented reality. It refers to a perceived and iterated collective virtual shared space. Metaverse related business blends reality with virtuality, such as immersive experience brought by AR/VR, along with social media business with high degree of interaction and freedom.

Bloomberg recently estimated the metaverse's market size at USD$800 billion. More and more big names are also focusing on metaverse-related investment. For instance, Roundhill Investment and Matthew Ball, a famous investor, have recently joint-hands to set up Metaverse ETF. These are just some examples to indicate that metaverse has moved from science fiction to reality. It is now a new form of internet economy, and its market potential is being tapped.

In the wave of Metaverse, internet giants continue to be the usual players and already have active planning, while other companies such as Snap (SNAP.NYSE), Newborn Town (9911.HK), Reworld (a Chinese developer with investors such as ByteDance) and Match Group (MTCH.NASDAQ) are attracting more attentions from public, thanks to their metaverse elements and interacting scenarios already built in their products.

What is Roblox's success logic?

Roblox launched a game to realize the metaverse. Manuel Bronstein, Chief Product Officer of Roblox, positioned the Company as an "immersive creation engine" that incorporates games, creation, and social network. In this sense, Roblox is not just a game but a whole new world full of possibilities. In the metaverse built by Roblox, users are not only game players but also creators. They can also meet new friends or invite friends from real-life to join their game. Roblox also upgraded the social networking aspects of its metaverse by introducing private spaces. Players can now throw parties and have fun like they'd do off the internet.

The metaverse is a collective virtual shared space, enhanced by physical reality and always online. The boundary between virtual and reality is blurred, and this allowed deeper links between online and offline through social networking and user generated content (UGC). In terms of its growth pace, Roblox is now the world's largest gaming UGC platform with DAU (Daily Active User) of 42.1 million, a year-on-year growth rate of 79%. Among the users, 70% of them are Gen-Z aged from 5 to 24. They spent 153 minutes daily on average, a year-on-year growth of 11%, and sent about 61 messages per day, compared to 50 on WhatsApp.

Obviously, Roblox's capability to realize the flywheel effect made possible by its immersive social attributes and the Gen-Z-dominated UGC ecology has been its key to success.

Who will be the next "Roblox"?

Following Roblox's path of success, it is believed that the following four unicorns are most likely to be the next metaverse center.

1. Snap Inc. (SNAP.NYSE)

Snap Inc. (SNAP.NYSE) has a unique position in the social networking arena, most notably in finding its way to a mass of young users by creating a brand-new social networking experience through the "burn after reading" function with the camera as its entry point. The youth compose the core users of Snap. 36% of the total users of Snapchat, the featured social networking APP of Snap, are aged 18 to 24.

Data released by Snap Inc. in May shows that Snapchat's monthly active users (MAU) have reached 500 million. Without any doubt, its huge traffic has added weight to its access to the field of metaverse. Meanwhile, the UGC capability of Snapchat cannot be underestimated, considering that more than 60% of its users are creating new contents on Snapchat every day. Building up on their stable, young users and the strong, open UGC platform, Snapchat keeps innovating and is currently striving to combine social networking and their efforts to break the line between virtual and reality through functions such as Snap Map and AR filters.

2. Newborn Town Inc. (9911.HK)

Newborn Town Inc. (9911. HK) is an internet company targeting the global market and now has accumulated billions of users around the world. Benefiting from its development of different video and audio social APPs, Newborn Town has already built a scalable social networking ecosystem. By dissecting users' preferences under virtual scenarios, the company has been creating a variety of efficient user scenarios combining games, e-commerce and other applications based on users' needs. In terms of its business planning, Newborn Town has the ability to provide users with more high-frequency interactions, higher sense of participation, and more immersive metaverse experiences.

According to the company's newly released data, as of June 30, 2021, Newborn Town has accumulated 254 million downloads for their social networking applications and 209 million downloads for games. With its global market coverage, popularity among young user groups, strong social-networking features, UGC attributes in products and layout in mid-core to hard-core games, Newborn Town has gained the admission to metaverse.

3. Reworld (Completed Series-B Funding)

In this April, Chinese mobile game company Reworld got nearly RMB100 million of strategic investment from Bytedance. The move was regarded as one of ByteDance's core steps towards metaverse. According to the official website of Reworld, the company was founded in 2018, and its main product is the game of the same name. Reworld the game is described as a youth UGC platform that recreates a realistic virtual reality experience through a physical engine.

It may be said that the paths of Reworld and Roblox coincide as both aim to create user immersive experiences in virtual space through games. However, one should beware of the fact that currently most of Reworld's players are from China, where the game market is highly competitive. It means that the market share for Reworld may be limited. Whether the company can win players over gaming giants like Tencent and NetEase becomes the key of the company's future development.

4. Match Group (MTCH.NASDAQ)

Match Group (MTCH.NASDAQ) is the world's largest online dating group with multiple online dating products like Tinder, Hinge, and Its users are located in more than 190 countries and regions.

Match Group expands its product portfolio through both self-development and acquisition. In February, Match Group made its largest acquisition by buying South Korean video social company, Hyperconnect. The acquisition aimed to increase Match Group's capability of enabling more diversified UGC, thereby creating the necessary conditions for immersive social networking.

Match Group is now in the leading position in the global open social networking arena. Backed by its huge user volume, Match Group is one of the companies with the most potential in social metaverse. However, so far we haven't seen any more moves on games or virtual scenarios building from the company. Whether Match Group will expand its layout in metaverse remains to be observed.

The success of Roblox unveils the metaverse era, and gaming is but one of many ways of presenting and experiencing metaverse. With the deepening of metaverse exploration, continuous technological breakthroughs and greater involvement and participation of capital, the promising potential of metaverse economy is worth looking forward to. We expect to see more metaverse-focused companies bringing new life experiences to the mass in the near future.

About Nanjing Sunglow Culture Development Co., Ltd.

Nanjing Sunglow Culture Development Co., Ltd. is a new media platform established by a number of professional financial media experts. It is committed to serving the global Internet economy participants, observing the wave of booming economy from the perspective of globalization, and providing valuable industry analysis, corporate interpretation and character stories.

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SOURCE: Nanjing Sunglow Culture Development Co., Ltd.

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