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The pandemic-driven demand for Roblox has cooled down which has resulted in some pressure on its revenue stream. Roblox says its will explore opportunities in the “metaverse” theme.

On Tuesday, May 10, Roblox Corp (NYSE: RBLX), the popular video gaming company for kids announced its first-quarter (Q1) results for 2022. The company revenue was disappointing as per Street expectations. Besides, Roblox also reported wider-than-expected losses.

The company’s revenue stood at $631 million against the analysts’ expectations of $645 million. On the earnings front, the company reported a loss of 27 cents against analysts’ expectations of 21 cents.

Roblox’s business has cooled off from the pandemic period. Back then, kids spent most of their time at home and on screens. However, as the world opens up, Roblox said that its bookings by 3% during the first quarter.

The kids video game company generates a majority of its sales by selling its virtual currency Robux. Using this currency, players can buy some of the premium features in the game. during Q1 2022, Roblox reported a total of 54.1 million active users. Also, users spent 11.8 billion hours engaged in Roblox, up by 22%. In a letter to shareholders, Roblox wrote:

“While Covid and the subsequent re-opening have contributed to slowing growth in several of our metrics, based on third party data we believe we are gaining share on both users and hours relative to certain other companies in gaming and social media that compete for our users’ attention”.

RBLX Stock Corrects 10%, Roblox Expects Further Losses

On Tuesday, May 10, the Roblox stock tanked 5.75% and an additional 4.4% in the after-hours trading session. As of Tuesday’s closing, the RBLX stock was trading at $23.19. The Roblox stock is trading at a 66% discount from its listing price in 2021. It is also trading at an 80% discount from its all-time high of $134 in November 2021.

The stock price came under further pressure after Roblox said that it expects net losses to continue in the “foreseeable future”.

“… We expect to continue to report net losses for the foreseeable future even as we anticipate generating net cash from operating activities,” noted the company.

The company is now looking to make up for the cooling down in the demand. Like several other players in the gaming industry, Roblox too plans to double down on the “Metaverse” theme. Explaining how the company plans to take up further development measures, David Baszucki, chief executive officer of Roblox said:

“We remained focused on delivering our innovation roadmap to unlock the full potential of the Roblox platform and drive long-term returns for investors. Over the past two quarters, we have launched a number of notable innovations including spatial voice and layered clothing that will continue driving user growth, engagement and monetization.”

Source: www.coinspeaker.com

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