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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.

Music Ally’s next Learn Live webinar will help you understand what’s required for artists to thrive in new international markets!

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Stuart Dredge

Music Ally's Head of Insight

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