Roblox Stock Is Sinking. The Loss Was Bigger Than Expected.

Feb. 15, 2022

Roblox reported record numbers of daily active users and hours engaged for the fourth quarter, but shares were sinking in extended trading after the company disclosed a wider-than-expected net loss.

Roblox reported a fourth-quarter net loss of $143.3 million, or 25 cents a share, compared with a loss of $58.7 million, or 30 cents a share, in the year-ago period, while analysts surveyed by FactSet had forecast a net loss of 12 cents. Revenue rose to $568.8 million from $310 million in the year-ago quarter. Bookings, a form of adjusted revenue preferred by videogame analysts, rose 20% year over year to $770.1 million, a tick below Wall Street’s consensus estimate of $772 million.

The company said average daily active users were 49.5 million during the quarter, up 33% year over year. Hours engaged hit 10.8 billion, up 28%.

Roblox is a platform that provides users—predominantly children and teens—with the tools to make their own games and online experiences. Users can visit the worlds and play the custom games with friends.

For the month of January, bookings are estimated to have been between $220 million and $223 million, the latter figure being a year-over-year jump of 3%. Daily active users were 54.7 million, up 32% from January of 2021, while hours engaged were 4.2 billion.

Roblox doesn’t provide investors with formal financial forecasts, but does release key metrics monthly.

Chief Financial Officer Mike Guthrie told Barron’s on Tuesday that the company is excited about how it is growing internationally and expanding its age demographic by adding older users. The firm believes those two trends will help it to hit a billion users when paired with a greater expansion of the platform.

“Over the last year, we’ve been seeing music on the platform, brand partnerships starting to grow, and early investments in education,” he said. “And in the sense that generally just drives a breadth of content on the platform, and, in simplest terms, [it] makes it more appealing to a broader array of people. So, as long as we keep delivering on those three things, I’m really, really comfortable.”

Roblox: The children's game with a sex problem

15 February 2022

A naked man, wearing just a dog collar and a lead, is led across the floor by a woman in a bondage outfit. Two strippers dance next to a bar.

A group has gathered around a couple openly having sex, watching and occasionally commenting.

One man is wearing a Nazi uniform.

This isn't happening in the real world, it's taking place on a children's gaming platform.




Roblox is a huge sprawling world of games which is sometimes described as a kind of primitive metaverse.

It's one of the most popular children's games in the world.

The exact figures are a little hazy, but in 2020 Roblox told Bloomberg that two-thirds of all US children between the ages of nine and 12, use the game.

Roblox allows users to create and play games together. It's a way to connect, in real time, with other people in a digital world.

Players can build games, using the developer tools which the platform provides. Unlike more traditional games, the content is generated by its users. It's a wildly successful business model, but it also comes with problems.

Roblox sex games are commonly referred to on the platform as "condos". They're spaces, generated by users, where people can talk about sex - and where their avatars can have virtual sex. In these games, Roblox's rules are thrown out of the window.

Roblox accepts it has a problem: "We know there is an extremely small subset of users who deliberately try to break the rules," a spokesperson told the BBC.

Condo games are usually only live for a short time - often less than an hour - before they are discovered and taken down. Roblox says it is constantly trying to take these games offline - using both manual and automated systems.

"We conduct a safety review of every single image, video, and audio file uploaded to Roblox, using a combination of human and machine detection," it said.

But some explicit content does slip through the net. It's a "cat and mouse" issue, said Larry Magid, president of ConnectSafely- a non-profit organisation that raises awareness about child safety online.

"There are people who are going out of their way to game the systems," he said.

These condos are not games you would stumble on. You would need to actively search for them. But their very existence troubles people like Mr Magid: "Roblox is a platform that is very popular among children, and allows children under 13, so it has a special responsibility to protect its users."

Particularly worrying is children and adults potentially socialising together in these spaces. Part of the game includes an instant messenger where users can talk to each other - and to everyone else playing the game.

Much of what is written on chats in condos is unprintable on a grown-up news website, let alone a children's game.

Roblox told the BBC they had developed 'Parental Control' tools, "that can be used to restrict who children interact with and which experiences they can access".

But that assumes that parents are tech-savvy enough to know about these safeguards.

Roblox wanted to emphasise to the BBC that condos are often difficult to find on the platform. But the BBC found inappropriate sexual language in legitimate games too.

According to Dr Liraz Margalit, a digital psychologist who studies behaviour online, people behave differently in the metaverse - just as they do online. She said: "You have the anonymity and you have the disinhibition effect. This platform provides you with the playground to do anything you want."

Last week, Facebook's parent company, Meta, introduced a new "Personal Boundary" feature to its virtual reality "Horizon Venues" game.

The game allows people to meet each other in different spaces - where their avatars can watch sport, attend concerts or do gym classes together.

The changes came after a woman claimed to have suffered a virtual sexual assault on the platform.

Roblox told the BBC: "We have zero tolerance for sexual content or behaviour of any kind, and we take swift action against anyone found to be acting in breach of our Community Standards."

And a few days after the BBC put its findings to the company, Roblox published a blogpost summarising what it is doing to protect young people.

Companies like Microsoft, Meta and Roblox are currently racing to build metaverses. But there are already signs that they're struggling to police these virtual worlds.

Roblox quarterly bookings miss estimates

Tue, May 10, 2022

May 10 (Reuters) - Roblox Corp missed estimates for quarterly bookings on Tuesday, as demand for its online games waned with kids returning to school after pandemic curbs ease.

Easing of restrictions and a reopening economy has affected bookings for pandemic winner Roblox, one of the world's most popular gaming sites for children, as kids now spend more time outdoors.

The San Mateo, California-based company posted a 3% fall in first-quarter bookings to $631.2 million. Analysts had expected $644.8 million, according to IBES data from Refinitiv.

The company generates most of its money from virtual currency "Robux", which players can purchase to spend in-game on upgrading avatars with items like outfits, accessories and pets.

Net loss attributable to common stockholders widened to $160.2 million, from $134.2 million a year earlier.