It’s typically parents who are giving money to the children to spend on the Roblox game, and these parents have little to no emotional connection to the game. Hickey also observed that many of the platform’s users are children, and kids are more open to switching games since they don’t pay for the game experiences themselves. That’s a fancy way of saying Roblox can’t continue to count on COVID-19 to keep people indoors and playing Roblox for hours on end. Hickey observes a normalization in behavior lately, though, and this may dampen Roblox’s pandemic-catalyzed user engagement growth. Moreover, there could be much more pain in store, as a pair of analysts express concerns about Roblox’s youthful user population.īenchmark analyst Mike Hickey, for example, suggested that the COVID-19 pandemic pulled forward the company’s growth for a while in other words, people on lockdown spent a whole lot of time playing video games in 2020. It’s been a punishing year for RBLX stockholders, even after the aforementioned 20% share-price pump. Two Analysts Issued Warnings about Roblox Stock Were financial traders overenthusiastic in pushing RBLX stock up 20% in a single day, though? It’s possible that their haste will be punished as Roblox’s future may depend on a user base that skews too young, and too unreliable. Also in September, Roblox’s daily active users (DAUs) increased 23% year-over-year to 57.8 million, while the hours engaged on the company’s platform grew 16% year-over-year to 4 billion. Selling these items is Roblox’s bread and butter, so it’s certainly encouraging that the company’s monthly bookings got a boost. ![]() The press release didn’t define bookings, but Barron’s explains this metric as “equivalent to the amount of virtual currency purchased during a given period.” Furthermore, Roblox platform users use a virtual currency called Robux to purchase items. The company revealed that its estimated bookings for September grew 11% to 15% year-over-year to between $212 million and $219 million. Indeed, it’s not difficult to figure out why Roblox stock jumped 20% on October 17. Among the data points were several positive ones, including an indicator of Roblox’s ability to sell virtual products. However, it has already released an important set of operating results for September. Roblox doesn’t plan to report its third-quarter 2022 financial results until November 9. ![]() Roblox Demonstrated Growth According to This Crucial Metric On the other hand, some financial experts are skeptical that Roblox can successfully court older users while navigating a post-pandemic world. Is this a lucrative business model? That’s the billion-dollar question, and a recently released data set suggests that Roblox is leveling up its digital-goods sales. There, as you might expect, Roblox earns revenue from facilitating the sale of virtual items. Beyond its function as a game, the Roblox platform is a portal into the metaverse. Roblox is a video game company, and its game is purposely populated with blocky graphics. However, the outlook is murky if Roblox can’t capture the attention and dollars of adult consumers.
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