Games platform Roblox announced its latest monthly metrics yesterday, with growth across the board. Its daily active users were up 15% year-on-year to 56.7 million; the hours they spent playing were up 10% to 3.9bn; and the company’s estimated bookings (the metric covering spending on its Robux virtual currency) were up between 5% and 7% to $222m-$225m.
But wait. With user numbers growing faster than bookings, that meant the average money spent per user was down between 5% and 7% year-on-year. Plus, a year ago in November 2021, Roblox’s users were up 35% year-on-year, and its bookings were up between 22% and 24%.
The slowdown in growth reflected in its latest figures spooked the markets, with CNBC reporting a 15.7% fall in Roblox’s share price yesterday after the announcement. At its peak in November 2021, Roblox’s market cap was $77.98bn. Now it’s $16.77bn, having lost more than 78% of its value in little over a year.
And Roblox is still growing, which is more than you can say for the overall games market. That’s context worth digging into a little, courtesy of recent estimates from games industry analyst Newzoo. It has predicted that global games revenues will fall by 4.3% to $184bn in 2022, which it described as “a corrective year” for the industry.
It expects the biggest decline to come from mobile gaming, with a 6.4% drop to $92.2bn in revenues this year. Which, of course, is still a huge market. For comparison, economist Will Page recently estimated that the global value of music copyright (recorded music and publishing combined) was $39.6bn in 2021. Goldman Sachs, meanwhile, has predicted that the entire music industry – recordings, publishing and live – will be worth $87.6bn this year.
Still, shaky investor confidence in Roblox is part of wider fears that the games market – a reliable growth sector over the last decade – may be catching a chill. While this is unlikely to rein in the music industry’s excitement for all things metaverse (i.e. games and virtual worlds), it’s a reminder that the companies we’re working with in those sectors have their own challenges ahead.
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