And as well, they could be places that we could direct brands for their immersive experiences, too. And inevitably, that’s going to be higher margin for us and that’s going to support the strategy to continue to walk margins up. So we have a point of view and an emerging strategy on it, but we’re also just being thoughtful about the balance sheet and have prioritized for now the importance of getting to breakeven this year. The other opportunity with direct-to-consumer is I really believe that, as we help brands build out that omnichannel strategy across multiple immersive entertainment platforms like the Robloxes and Fortnites of the world, we then have the chance to kind of hit now point four on the brand journey, which is really about, “Okay, it’s time to take a look at your website as well.” And when we start to become the enterprise solution to transform their owned e-commerce solution, I think that’s how we can get into new revenue streams like tech licensing that I mentioned but also why not get a piece of some of the consumer monetization, the royalty.
We’ve even explored things like, if every time I know that I’m driving somebody to download the Chipotle app or a food ordering app on their phone, we could structure our contracts differently to have us be paid for that performance not just for the service that we provided and pulling off that immersive engagement experience but maybe we start to build in some metrics on the back end that provide additional compensation. And again, those could start to look like consumer monetization as well. So it’s on our mind that there’s a lot of opportunity there. We’re just trying to be really smart about it because, frankly, we’ve seen some others in the space throw tons of money at consumer monetization and it has not paid off.
Scott Buck: Great, that’s helpful. I appreciate the time guys. Thank you very much.
Ann Hand: Thank you.
Operator: Thank you. Our next question comes from Howard Halpern with Taglich Brothers. Please go ahead and unmute yourself.
Howard Halpern: Hi and congratulations. Great quarter. Great year.
Ann Hand: Thank you, Howard.
Howard Halpern: In terms, you talked about the Lunchables campaign and what you had to build for it. So building on that, how easy will it be to repeat a campaign like that or take parts of it into new campaigns that will provide probably some gross margin leverage going forward?
Ann Hand: Yes, if I could point people back to my remarks, what I would want to aside from the size of overall deals, I would want to point everyone back to the themes that I made on productization because that’s essential and that’s something that others don’t really do outside of Roblox themselves, right? I mean we aren’t just a game studio building one-off experiences that then kind of get thrown away after the campaign. What we’re doing is we’re looking at those experiences, those custom experiences that we’re building, and then we’re seeing repeatable elements of them that we can build out as the product and sell over and over and over again. So think about it, we’ve done fashion runways and fashion experiences with H&M, Crocs, Oshkosh.
So we learned a lot in those campaigns. And so building out a fashion runway that we can easily re-skin and deploy very quickly and go out and sell to 50 different fashion brands out there is a big idea. It’s a big idea because it gives them an easier entry point, a little more reasonable of a price and a quicker activation time. Instead of taking two months to build your personalized, what feels very custom bespoke runway experience, we can have that out of the gate in a couple of weeks. But also, too because we’ve done that upfront development, it does mean that those products inevitably have higher margins. So they look more like product margins. If you look at where are — there’s really two places our margins come down a bit when you look at it across a weighted basis.
First is sometimes we’ll take on work that really is not very high margin because it’s important because we want to be that one-stop shop. So a good example is if a brand says, “I want you to build an experience. I want to buy some of your media products. But also, would you work with a couple of influencers?” So we’ll do influence our marketing. But we know that it’s going to be about a 20% margin. But it’s really just to say, instead of giving us $800,000, give us the full $1 million. And in that way, we win because it’s just easy. There’s just one company that’s managing the whole program. And of course, in the race to grab top line, in the early days, we wanted that even if it came at a lower margin. The other place is when we are using outside devs to create bespoke experiences for us because we have limits in our game studio or we haven’t productized enough that we can do them more as turnkey programs.
And so those can have anywhere from 25% to 30% margin. When we start to build products, those will start to come in at 50%, 60% margin. So the more we productize, the more we really aren’t again, just a game studio or a good, old-fashioned digital ad agency, we are a product company and a product company that can scale because of that productized catalog that can bring brands in quicker, get campaigns deployed faster and at higher margins. And so the pop-up products that I’ve mentioned, also the whole notion that we can stitch or bolt on a loyalty rewards component, so we can say to that brand, “Hey, we’re not just done by creating a quick productized experience for you, we want to bolt that rewards loyalty program on and show that we can not only create games and incentives and loyalty inside the experience to keep people coming back and playing more but that we can drive it to really matter where it matters most, which is your real-life P&L for your brand.” And so again, the productized notion of pop-ups or drag-and-drop modules and the loyalty rewards, I think are two of the biggest things we are doing this year that changed the business model, the margin profile and the speed with which we can grow top line.
