Roblox China was once full of promise. Since its localized platform, which is a joint effort with Tencent, abruptly halted operation nearly two years ago, the company has been quiet about its standing in the world’s second-biggest gaming market. Until now.
TechCrunch has exclusively learned that Roblox China, also called LuoBu (罗布乐思), initiated a round of layoffs in October. A spokesperson for Roblox confirmed to TechCrunch that 15 roles, which comprised a “small number” of Roblox China’s teams in the U.S. and its headquarters in Shenzhen, were affected.
The decision was made after an “evaluation of the operational structure in support of LuoBu,” said the spokesperson. “Those employees whose roles were impacted have been informed. These actions are specific to LuoBu and its unique business and operational needs. No other teams within LuoBu or at Roblox are impacted.”
Roblox gave no further information on which roles were cut. Roblox China’s headcount is in the range of “100-499” according to its listing on Boss Zhipin, a major recruiting site in China.
The new layoffs arrived not long after Roblox’s significant reduction in its talent acquisition team, which marked the children-oriented gaming giant’s shift of focus from expansion to its bottom line.
TechCrunch has also reached out to Tencent, which runs the LuoBu joint venture with Roblox, for comment on the layoff.
In 2019, Tencent and Roblox established a joint venture in China in which Roblox would hold a 51% controlling stake, a rare instance where the foreign entity was granted the majority share. The goal was to build a localized version of Roblox’s gaming platform, which is known for its user-programmed games, while Tencent would provide the necessary gaming license for its foreign partner to operate in China.
The challenge of running any platform that thrives on user-generated content in China is to ensure the content is in line with Beijing’s censorship rules and cross-border data regulations. Those stipulations can be nebulous and cumbersome. So when LuoBuLeSi, the Chinese version of Roblox, suddenly paused service in December 2021, its well-informed users weren’t all that surprised.
Roblox was candid about its unique challenge in China at the time: “We always knew that building a compelling platform in China is an iterative process, and we are thankful for the support of LuoBuLeSi users and our global developer community.”
There is no sign that Roblox is giving up on its China dream. Commenting on the new layoff, its spokesperson said: “We remain committed to our long-term vision and plan for the LuoBu platform in China.”
Roblox isn’t the only one facing hurdles in the Chinese gaming market. Blizzard Activision, the California-based gaming publisher behind World of Warcraft and Overwatch, began to roll back operations in China in January after its 14-year license with its local partner NetEase expired. At the time, the gaming giant said it would be looking for a new publishing partner.