Roblox Corporation’s stock took a significant hit, plummeting by 20% after reports revealed that the platform fell short of industry expectations for daily active users.
User Growth Challenges
In its fourth quarter, which ended on December 31, the number of daily active users dropped by 4%, reaching 85.3 million, whereas analysts had anticipated a figure of 88.4 million.
Moreover, player engagement experienced a notable decline, sinking by 9.7% to 18.7 billion hours.
The company reported bookings amounting to $1.36 billion—a dip from the expected $1.37 billion.
Impact of Regulatory Challenges
During the earnings call, Chief Financial Officer Mike Guthrie provided insight into the user growth challenges, indicating slower-than-expected expansion in Eastern Europe.
He cited an ongoing ban in Türkiye over child safety regulations, which has been in effect since August 2022, as a significant factor.
Roblox has maintained a commitment to adhere to local laws and hopes to restore access in Türkiye as soon as circumstances permit.
This past quarter marked the first full accounting period affected by the aforementioned ban.
Developer Revenue Milestone
On a more positive note, the quarter also saw Roblox awarding a record $281 million to its game developers.
CEO David Baszucki highlighted this achievement, emphasizing the company’s commitment to fairly compensating creators.
Last year, Roblox found itself under scrutiny due to allegations regarding the treatment of young developers, which were reported by People Make Games.
In response, Stefano Corazza, head of Roblox Studio, addressed these concerns during an interview with Eurogamer, clarifying that the company does not employ minors.
Despite the challenges, the significant payout to developers reflects Roblox’s dedication to nurturing its creative community, showcasing a commitment that remains strong even in tough times.
Source: Eurogamer