(Bloomberg) -- Roblox Corp. a video game platform aimed at preteens and teenagers, reported bookings that missed analysts’ estimates, becoming the latest gaming company to deliver disappointing results amid a post-pandemic industrywide slump.
Bookings, which include revenue, deferred revenue and other adjustments, fell 4% to $639.9 million in the second quarter, the company said in a statement Tuesday. Analysts projected $657.2 million, according to data compiled by Bloomberg. The number of daily active users also fell short of expectations as the growth rate slowed. Roblox said it had an average of 52.2 million daily users, up 21% from a year ago but less than the 28% increase in the first quarter. Analysts were looking for 54 million.
The shares fell about 12% in extended trading after closing at $47.35 in New York. The stock has declined 65% from its November high of $134.72.
Roblox joins a long list of gaming and gaming-related companies -- from game publishers to console and PC makers -- that have struggled to maintain the surge in growth seen during the pandemic. With the end of lockdowns, people have been spending less time playing games and rising prices means they’re also spending less money buying them or making in-game purchases.
Gaming companies were long considered recession-proof, but that’s proving to no longer be true. During an economic downturn, such as the US is experiencing now, people normally have continued to consume entertainment, including video games. However, now that many games and gaming platforms, including Roblox, are free-to-play and don’t require an up-front payment, some gamers are opting out of unnecessary expenditures. Spending in the video game industry is expected to drop 8.7% this year, according to analytics firm NPD Group.
Activision Blizzard Inc., which is being bought by Microsoft Corp. for $69 billion, last week reported sales and earnings fell in the last quarter, while Electronic Arts Inc. gave a revenue forecast that missed estimates and Take-Two Interactive Software Inc. missed analysts’ estimates for annual profit.
Chief Executive Officer David Baszucki said Roblox doesn’t see the same concerns as other gaming companies because of its business model. “The market economy, although it is difficult for many people in America, has not affected us,” he said in an interview.
Enormously popular with children and teens, Roblox provides a platform for users to make and play games. While the market found reason to be disappointed in the results, Roblox said business is improving. People spent almost 4 billion hours on the platform in June and in July Roblox reported an all-time-high of 58.5 million daily active users.
Roblox attributed the improvement to “certain product initiatives and better operational focus,” according to a letter to shareholders. Higher levels of bookings growth among 17-24 year olds, for example, is partially due to more “aged up” content. Other features such as voice chat and layered clothing are also contributing to growth, the company said.
“We’re very proud that the majority of people playing on our platform play for free,” Baszucki said. “We see no real connection with inflation, or a recession, with the way our bookings continue to grow. We’re a freemium model and a minority of people are buying Robux every month,” he said referring to the platform’s currency.
Revenue in the second quarter increased 30% to $591.2 million, mostly from commissions on in-game transactions of items and virtual currency.
The company’s net loss was $176.4 million, or a loss per share of 30 cents. Analysts had anticipated a loss of 25 cents.
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