Photo Credit: Roblox
Roblox shares have dropped by 20% as the platform’s daily active users fell short of projections, despite record revenues.
Roblox’s number of daily active users fell by 4% to 85.3 million in Q4 compared to the previous quarter, falling below analysts’ forecasted 88.4 million. As a result, overall player engagement also declined by 9.7% to 18.7 billion hours.
The company’s outgoing CFO, Mike Guthrie, noted growth in Eastern Europe was “quite a bit slower” than expected, owing to a ban on the platform in the Republic of Türkiye over concerns of child safety. That ban kicked off in August last year, leading to less activity on the platform overall in Q4 — the “first full quarter where Türkiye has been off.”
“We’re growing at a substantial premium to the overall gaming market,” added Guthrie. “Right now, gaming is barely growing as a category.”
Roblox forecasts that its annual bookings this year will be between $5.2 billion and $5.3 billion. The midpoint of that projection falls below analysts’ estimates of $5.27 billion.
Despite the bumpy road with active users, Roblox reported a record in earnings of $281 million with its game developers. David Baszucki, the company’s CEO, said this reflected Roblox’s “commitment to paying creators.”
That’s a much more positive outcome than reported in 2021, when Roblox was accused of exploiting children as young developers. The company clarified that it does not hire minors; that said, the platform’s developer kit encourages kids to create their own games within Roblox, for which they were compensated at an unequal rate.
Roblox’s earnings report mirrors those of other companies in the video game industry, with Electronic Arts revealing a lackluster outlook for 2025 — also blamed on weak bookings. Despite the decline in daily active users and not reaching quarterly targets, the gaming platform remains popular among younger gamers who use the platform to socialize after school. As of 2024, the game still has 380 million monthly active users and has secured several partnerships with major labels like Universal Music and Warner Music.