Translation: User Explosion
It’s time for a riddle. What has its own currency, no borders, and a daily population larger than the UK?
Hint: the population skews young.
No, this isn’t some new DAO from the crypto kids. It’s Roblox.
For those who don’t know, Roblox is a gaming platform. To put it very simply, developers can build miniature games inside of Roblox, which any Roblox user can play. And users are free to explore the world of Roblox games, spend “Robux”, or just hang out and chat.
And to say that it’s popular it like saying Lebron can jump. Accurate, but insufficient. There are players from 180 countries on Roblox, and 70M players show up every day to spend time on the platform.
But the metric worth focusing on for today’s deep dive is this – every day, there are ~2.4B messages sent between players on the platform.
With that in mind, it becomes pretty clear that Roblox is more than just a gaming platform… it’s a community. And this week, Roblox made the community very happy.
What’s the news?
Roblox launched real time translation for those 2.4B daily messages, and it works for 17 languages already. For the brave, Duolingo-inspired users who want to check out the original text… you technically can… but otherwise, you’ll see all messages in your native tongue. Pretty awesome.
To make it work, Roblox is using LLM’s in a ‘mixture of experts architecture’. Basically, it takes the best LLM for English, for German, etc. and let’s each ‘expert’ weigh-in when needed. That way, Roblox doesn’t have to train one huge model (to rule them all), and the translations are apparently very good.
Why would Roblox care about this? Is this just an AI-inspired gimmick?
Well, I should preface all this by saying that the AI water is definitely warm, and Roblox (just like everyone else) seems excited to jump in.
But I think there’s a lot more to it.
Here’s Zhen Fang, Roblox’s Head of International, to help me tee it up:
“Our early experiments with this new automated chat translation technology showed a very positive impact on time spent, chat engagement, and session quality, so we are very excited to roll it out to further enhance and expand our community’s daily communication.” (source)
In different words, she’s basically pointing to network effects, where the value of a platform changes when more people are using it.
For example, Facebook is more valuable to a user when more of that user’s friends and family are on it, because they can share more photos, post more “happy birthday!” notes, etc. – that’s a positive network effect.
Roblox’s situation is a little bit more complex, and they even have some negative network effects in play. Let’s talk through them.
Users
User-to-user, positive effect – This is the major one. As of their 2022 Annual report, Roblox’s users were 23% US & Canada, 27% Europe, 23% Asia Pacific, and 26% Rest of World. (Note: I’m also frustrated by the rounding causing those not to add to 100%, but we will get through it together!) With live translation, those geographic silos – and the language barriers they carry – start to fade away. You can chat more, play more, and build more community. Effectively, it has the same impact as dumping a bunch of new users into the platform. Except actually, they’re better than new users, because they already know how to build and play. That’s a positive network effect, which makes Roblox even more attractive for the next prospective user.
Developer-to-user, positive effect – Also, because developers can make use of chat features in their games, users can access even more entertainment. Again, this makes Roblox more attractive to new users.
Developers
User-to-developer, positive effect – Developers are celebrating too! They now get to sell their games to an even larger user base (contributing to stronger network effects on their own games! A mini-version of this larger dynamic). Awesome!
Developer-to-developer, negative effect – On the other hand, competition among developers will likely increase, which is a version of a negative network effect. You have to be an even better developer, because you’re competing with a global talent pool, not just the developers who live in your region or speak your same language.
Taken together, the positive effects win out, so users and developers will benefit, and Roblox benefits by proxy. But for Roblox, that’s not even the best part.
The Cherry On Top
One thing that should be obvious, and that is splattered all over Roblox’s shareholder letters, is that they are nothing without their developers, who build the games for users. At the end of the day, Roblox (the platform) is just a box of tools for developers to use to make games, which users can go play.
Think about how hard it would be to dream-up and build the 40M(!) games that have been created by developers so far. Would Roblox be able to absorb those costs and stomach the risk of games flopping? Probably not. It’s way better, and more efficient, to let others build them!
The sweetest part… the cherry on top for Roblox… is that adding live translation is still aligned with that hands-off, “give them the tools” strategy. This is just another tool in the toolbox for developers.
Plus, lots of new companies are springing up because of AI, and lots of old companies are contorting themselves, injecting AI to look younger and more modern… But this, on the other hand, is an authentic use case that solves customer problems and creates platform value. Love to see it.
With all that said, Roblox isn’t the only company realizing that translation is a quick way to effectively increase your user base…
Where else are we seeing this same trend?
I feel like I’m shopping for a car or something, because now that I’ve pointed it out (even for myself), I’m seeing it everywhere!
Netflix famously curates international content, and it has trained us to love subtitles
Meta released a text-to-text translator model, which I’m sure they’ll use to translate their Facebook and Instagram posts
Google is beating Meta to the punch, and has already deployed their “Universal Speech Model” to translate 100 languages into captions on YouTube (source)
These are all moves toward breaking down language barriers and improving engagement on their platforms, but I think these entertainment examples are also part of a larger trend… the fluidity of borders in general.
Sure, there will still be friction from geopolitical issues, timezones, and cultural differences that slow this down, but in the long term I think “speaking the same language” or appearing to, will push most companies back towards globalization.
So then, alongside borderless payments (crypto), we will have borderless work (remote, work-from-anywhere), and borderless play/entertainment… what else is left?
Bonus Bullets
Quote of the Week
If you're offered a seat on a rocket ship, don't ask what seat.
— Sheryl Sandberg
Quick News Reactions
Self-driving Apple car delay – It was only a few weeks ago I wrote about GM’s Cruise backing away from self driving, and this seems like a continuation of that risk-averse trend. Sadly, the startups will need to to the hard work to get us there, just in time for Apple, GM, and others to jump-in and capture a bunch of the value. Oh well.
Sports Package – ESPN is joining forces with Fox and Warner for a sports streaming bundle, but it will also be available to Max, Hulu, and Disney+ subscribers. I can’t tell whether this is brilliant or desperate, a last gasp at bundling when the un-bundling of cable assets is almost entirely complete.
The Next TikTok? — The CEO of Douyin (the Chinese predecessor to TikTok, before it blew up in the US) is moving to a new role inside of Bytedance. She’ll be leading a company called CapCut — an AI video editing tool. Some reports framed it as a demotion, but my wild speculation is that they want her to spearhead the AI tech that might turn TikTok from a user-generated content (UGC) platform to an AIGC one.
Overall Economy
This is the Weekly Economic Index published by the Dallas Fed. It’s made up of 10 different data sources from consumer to labor to production, and it’s designed to closely track US GDP
Tech Equities & Bitcoin
The Nasdaq (blue) closely tracks tech equities, and I added the S&P 500 (green) and Bitcoin (orange) for comparison.
Tech Jobs Update
Here are a few things I’m paying attention to this week.
Big Tech Job Posts: LinkedIn has 9,439 (+8% WoW) US-based jobs for a group of 20 large firms (the ones I typically write about — Google, Apple, Netflix, etc.).
Layoffs from 2022-2024: (Source: Layoffs.FYI). Note that this is showing in-progress numbers for the current month.
Nice analysis! What becomes borderless next? Living. Only a matter of time before crypto currency combines with ownership/access to real world places. I'm reminded of an excellent chapter in Utopia for Realists where the author argues about how much value and innovation capture there would be by relaxing geopolitical borders.