Roblox CEO: 'We're being very, very careful in China'

Roblox's (RBLX) approach to China is characterized by some optimism and an abundance of caution.

The US online gaming company in 2019 announced a strategic partnership with China-based tech giant Tencent (TCEHY), though Roblox paused service in China in 2022.

"We're being very, very careful in China," Roblox CEO David Baszucki said in a session at the 2023 Code Conference in Dana Point, Calif. "The dynamics in China right now have gotten to the point where, rather than envisioning a fully connected-type network, you have to imagine an autonomous network. In a sense, we're modernizing our infrastructure to the point where we can literally print a copy of Roblox in China and bring it to market there."

Baszucki's comments track with what survey results suggest is a widespread sentiment — that US companies are less optimistic about their prospects in China.

A recent study by the American Chamber of Commerce in Shanghai found that US businesses who are optimistic about their five-year outlook in China fell to 52%, a record low, as the country faces geopolitical tensions, economic hurdles, tariffs, and issues in the real estate market.

Still, Baszucki added that the company continues to be very involved in China and is working on the infrastructure to support Tencent there, which he noted "continues to be an amazing partner."

Roblox is in the midst of a growth push, and the company's strategy aims to attract older users, which Baszucki touted.

"We've actually stopped using the term 'aging up' right now," he said. "We have a very substantial over-17 user base. ... It's surprising, the amount of older people that play [Roblox]."

China, as one of the largest markets in the world, is undoubtedly part of that growth strategy.

But Baszucki didn't discount that the geopolitical relationship between China and the US could get more complicated.

"As you look at any other platform or any other social media company, you could look back at the last three to four years and you'd see ... less and less information going back and forth between the US and China," he said.

If things were to deteriorate further, he added, it could potentially get to a point where "the future will be very hopeless."

Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.

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