On Tuesday, November 7, 2023, the Roblox website was located on a laptop in new york, USA. Photographer: Gaby Jones/Bloomberg Gaby Jones/Bloomberg/Getty Photo Agency Many adults first heard the word "Robux" last holiday season, when the virtual currency of the game platform Roblox appeared on most people's wish list. Roblox has an astonishing 70 million users. With its wide range of game products, from simulation and adventure games to games designed by yourself or with friends, Roblox attracts a group of loyal fans, especially teenagers.
Roblox will announce its first-quarter earnings before the market opens on Thursday. It must prove to Wall Street that there will be more growth in the future.
In the fourth quarter of 2023, Roblox's revenue was 0 million, a year-on-year increase of 30%-but its net loss was 3.7 million.
Investors have cooled down. The stock has been hovering between and for several months after reaching the peak of just over 0 when it went public in 2021.
Mathilda Bainat, an AR/VR analyst at ABI Research, a technology information company, said: "The company faces high operating costs and needs to maintain rapid growth." "Investors want to know if this is feasible. “
Despite this, analysts and investors remain moderately optimistic. There are three reasons.
Costco store's game center gift card display, providing Roblox gift cards. Lindsay Nicholson /UCG/ Getty Pictures/Archives New Sources of Income Since its launch in 2006, Roblox has been developing, and so has its growth strategy. The platform allows users to play user-created games and create their own games, and it also integrates elements of social media networks, so people can make friends and talk with developers while exploring the virtual world.
Last year, its CEO David Baszuki shared the vision that Roblox will become a place for people to date and establish "real-life relationships" in the next five years. In February this year, the company said that 19.7 million new "friendships" were formed on the website every day.
The company's vision has always been to make Roblox ubiquitous and successful in many ways. Daily active users of the platform use the platform for an average of 2.5 hours a day-and these numbers continue to grow. In American Monthly, about half of American teenagers (aged 12 to 17) use Roblox, which continues to grow in overseas markets, especially in Asia.
Its most popular works include Adopt Me! (a pet simulator), Brookhaven RP (a functioning virtual town) and the Tower of Hell. Although many games are aimed at teenagers, the company seeks to expand the number of older players and profit from them.
Just last week, the company announced that it would show immersive video advertisements to players over the age of 13. Roblox's share price has risen since the announcement.
A new developer subscription service allows developers to create monetary subscriptions to unlock certain experiences, which some analysts expect may help the platform to further develop in other generations.
Brand benefits and risks
Brands are becoming more and more interested in Roblox. The company said that in the fourth quarter of 2023, the brand participation on its platform was the highest, and more than 300 brands were activated on the website, including Ralph Lauren, Nike, Crocs and Lego.
Wal-Mart even joined the Roblox Metauniverse, adding the experience of allowing users to buy physical goods and receive them by mail.
Mike Proulx, research director of Frest, a market research company, said that although brand participation may continue to increase this year, the company needs to ensure that users will not feel advertising fatigue.
"As the company redoubles its advertising to attract more brands, it needs to strike a balance between what may be regarded as' easy income' and the user experience," he said.
"Too many advertisements risk causing users to rebound. Brands that want to effectively reach the young user base of Roblox should give priority to creating value exchange. Loucks said: "It is not enough to rely on programmatic advertising.
On Friday, February 9th, 2024, the monitor displayed the logo of Roblox Company on the floor of new york Stock Exchange (NYSE). Michael nagel/Bloomberg/Getty Pictures/Good timing for documents. The growth of Roblox reflects that people's interest in two hot industries is budding: artificial intelligence and augmented reality (XR), which is a term covering virtual reality, augmented reality and mixed reality.
In February of this year, Roblox launched an artificial intelligence chat robot, which can communicate with each other in real time no matter what language users speak. The tool supports 16 languages. The company previously shared its vision of expanding artificial intelligence on the platform through tools that will "make every user a creator".
At the same time, major technology companies continue to invest in XR, and the increase in interest is partly due to the launch of Apple Vision Pro headphones. The metauniverse is arousing people's interest again.
"We have begun to see the company's performance rise with the implementation of these new strategies. I believe that with the right advertising and the right timing, Roblox will soon become the communication and collaboration platform it strives to become," Beinat said.
Facing competitors
But Roblox also faces challenges from its main competitor Epic Games' Fortress Night and the platform's Fortress Night Illusion Editor (UEFN). UEFN is a tool that allows creators to create experiences and publish them directly to Fort Night.
Lewis Ward, game director of IDC, a market research company, said: "Although the players of Fortress Night are often older, they are definitely trying to seize the market of Roblox."
Epic has also been taking measures to enter the core user base of Roblox.
In February this year, the publisher announced that it would cooperate with Disney to develop open games and entertainment related to Fortress Night, providing users with the ability to play games, watch, shop and contact the contents and characters of Disney, Pixar, Marvel Comics, Star Wars, Avatar and other franchise companies.
Like fortress night, Roblox is also promoting the business model of "paying the creator". Last year, the company said that it would allow creators who sold assets and tools for other creators in its creator market to keep all the income they earned.
Ward said: "Obviously, (Roblox) intends to pursue younger gamers in 2024 and 2025.
Ward added: "I think this aspect of the game will keep growing over time, and Roblox is in a favorable position to benefit from this trend of' performance economy'."