Roblox To Rebuild China App After Pulling Plug

Image credit: Roblox

Roblox says it will construct new version of China version of platform after removing it from app stores as it faces regulatory crackdown on gaming sector

Online gaming company Roblox said it is to rebuild the Chinese version of its platform after taking it offline last month.

The company’s “LuoBuLeSi” app was removed in December, only five months after it was released in partnership with a subsidiary of Chinese gaming giant Tencent.

Roblox said it was making “necessary investments”, including to the way data is processed in its games, as part of a “number of important transitory actions”.

It said it would build another localised version of the platform.

China ambitions

Tencent declined to comment.

The app and its importance in expanding into the Chinese market of 720 million gamers was extensively discussed in Roblox’s initial public offering prospectus for its blockbuster New York Stock Exchange offering in March 2021.

The company secured a difficult-to-obtain regulatory licence through the Tencent partnership to rollout a China-specific version of the platform with stricter censorship rules for game developers and an emphasis on education rather than entertainment.

But the company has continued to face intense competitive and regulatory hurdles in China.

Chinese gamers said they had no warning that Roblox was planning to take down its app and were unaware that it was considered a test version.

The sectors in which Roblox is engaged – gaming and education – have faced increased regulation over the past year as part of a broader tech-industry crackdown in China.

Regulatory crackdown

In July regulators curbed the private tutoring sector, and a month later imposed sharp restrictions on online games for young people, limiting the activity to 8pm to 9pm on Fridays, weekends and public holidays.

Roblox and Tencent may be required to obtain a new licence for a revamped version of the platform, a process that could take until the end of the year due to a backlog of games waiting for regulatory approval.

Roblox faces local competition from Reworld, a Chinese platform with investment from TikTok owner ByteDance.

Both companies offer virtual environments populated by user-created games.

Such virtual environments, also known collectively as the “metaverse”, have recently seen increased interest and investment, with Facebook going so far as to change its name to Meta.

Slowing growth

Like some other tech firms, Roblox has benefited from restrictions imposed by the Covid-19 pandemic, but has more recently reported slowing growth in its number of daily active users and time spent on the platform.

Such factors have contributed to a 40 percent drop in its share price over the past month.