It looks like the metaverse is working fine. No, not the one Meta is trying to achieve in VR – the Roblox gaming platform is where the kids still spend their money, apparently. After reporting its fourth-quarter results on Wednesday, Roblox shares jumped 25% as investors reacted to the company’s better-than-expected earnings.
Made popular through games like MeepCity, Jailbreak, Adopt Me!, Royale High, Murder Mystery, and others, Roblox attracts a younger demographic that goes online not only to play games but also to chat and socialize with friends. other players.
The growth of the platform, alongside other games like Fortnite where players also attend concerts and hang out with friends, has Facebook so concerned that it rebranded itself as Meta and started spending billions on its project. metaverse, fearful of missing out on the next trend in online socializing.
But right now, Roblox is still where the action is for today’s young players or “metavers” participants if you want to call them that. (Technically, the Metaverse doesn’t exist yet. It’s just a buzzword.)
The gaming platform company today announced that it had 58.8 million daily active users (DAUs) on average, up 19% year-over-year in the fourth quarter. For the full year 2022, average DSUs were 56 million, up 23% year-over-year. Additionally, the company provided more recent metrics, noting that average DAUs in January soared to 65 million, up 19% year-over-year.
However, Wall Street investors were particularly pleased with Roblox’s reservations figures, which represent in-game purchases made using the company’s own virtual currency, Robux. In the fourth quarter, bookings rose 17% year-over-year to $899.4 million (or a 21% rise at constant currency), as investors expected $884.71 million dollars, according to a consensus estimate. For the full year, bookings increased 5% to $2.9 billion (or 9% at constant exchange rates).
In today’s earnings release, the company also estimated its January bookings were between $267 million and $271 million, up 19% year-over-year.
“Bookings accelerated significantly in December and January, with year-over-year growth exceeding 20% in both months. Growth was strong across all geographies and business groups. age, with particular strength among users over 17,” Roblox CFO Michael Guthrie said in the earnings press release – an indication that Roblox is expanding its userbase with teens. and young adults, not just children.. This is good news for the company, if so, as the demographic would have more money to pour into Robux.
At its developer conference last fall, Roblox noted that half of its user base was 13 or older, suggesting that it was managing to retain at least some of the users that many expected. they age from the Roblox experience.
Additionally, Roblox today announced that its players have been engaged in games on the platform for longer periods of time, both in the fourth quarter and in 2022 overall. Committed hours were up 18% year-on-year in the fourth quarter to 12.8 billion, and were up 19% year-on-year to 49.3 billion last year.
Although investors are more concerned about reservations, Roblox’s revenue also rose 2% year-on-year to $579.0 million in the fourth quarter, and 16% year-on-year to $2.2 billion. dollars in 2022.
The fact that Roblox posted a smaller loss of 48 cents per share, compared to the 52 cents per share expected by investors, also helped boost the stock.
There has been some anticipation around where Roblox will land in the post-Covid era.
The company saw incredible growth during the Covid-19 pandemic when schools were closed and children were locked at home, but its revenue was hit last year as pandemic trends normalized . A year ago, in his first annual report after publication, Roblox CEO David Baszucki admitted to investors that while the company’s absolute numbers continued to grow, its growth rates had declined because it was forced to compare its numbers to double or even triple the growth seen during the pandemic.
The company has also weathered a few storms, including those related to moderation issues, inappropriate content, and concerns about exploitation of young developers who make games for its platform. The latter plays a role in the broader issues bubbling in technology around app and game markets, and what kind of revenue sharing – if any – should be applied. Apple and Google’s app stores are in the center of that spotlight at the moment, but ultimately the regulations could impact any platform where game makers have to pay commissions.
While not a factor in this revenue period, Roblox hosted a free virtual Super Bowl concert featuring Saweetie and announced that the NFL had created a new experience on its platform that allowed football fans to draft their own NFL team and build a stadium. Recently, reports have indicated that Roblox could compete more directly with Meta’s Horizon Worlds by launching on Meta’s own Quest platform.
