The days after the publication of quarterly results follow one another and are not alike for Roblox. Nearly three months after having soared 30% on the stock market, the American video game firm is preparing for a sobering morning on Wall Street since its price plunged more than 15% in pre-market trading on Wednesday. Why such a hangover in perspective? Up 20% year-on-year, the group’s quarterly income stood at a level below market expectations, at $770 million.
Same causes, same effects with the number of daily active players, an indicator closely scrutinized by Wall Street. This amounted to 49.5 million people at the end of December, a jump of 33% compared to the same period last year. But investors expected Roblox to break through the symbolic 50 million barrier. ” In absolute terms, our figures have continued to grow but our growth rates have declined ,” acknowledged David Baszucki, the group’s boss.
The reason ? Roblox is a so-called “sandbox” video game – i.e. a title where the “gamer” has no specific objective but where he can roam freely in persistent universes created by other players – very popular with children and young adolescents. Mechanically, the return to normal life for the latter, whether at school or sports activities on the weekend, means that Roblox’s audience is growing less quickly than during periods of confinement or strong health restrictions which enameled these last two years.
Heading for the metaverse
And viewership is crucial for Roblox. Unlike its main rival “Minecraft” (Microsoft), Roblox is accessible for free; the firm monetizes its audience through microtransactions within its title, but also increasingly through partnerships with major brands or celebrities who create events within the game, such as concerts or festivals. In December, Paris Hilton launched her virtual space in Roblox.
This evolution of its economic model is also due to the more global change of the group which is gradually being transformed into a metaverse, that is to say a virtual universe where everyone can lead a second parallel existence. This is the reason why David Baszucki called on Wall Street to ” look at the long term “, while the group invests so much and more to become a benchmark player. As a result, Roblox has further widened its net losses last year to more than $500 million.
The issue of content
A forerunner in the metaverse niche with groups like Epic Games (the firm behind the successful game “Fortnite”), Roblox however sees many publishers landing on this furrow. Facebook thus officially set its sights on the metaverse in the fall and even renamed itself Meta in passing. A major rival in sight for Roblox.
Another issue that is increasingly coming to the table of the company: the moderation of content within its platform which is increasingly vast and used, and therefore difficult to control. On Tuesday, the “BBC” revealed that Roblox was struggling to curb the creation of virtual spaces of a sexual nature within its game, which is primarily used by children. What also explain the nervousness of Wall Street. Since its historic peak in mid-November, the group’s market capitalization has melted by more than 50%, to less than 40 billion.