Roblox slides as bookings miss raise gaming slowdown worries
Reuters
Published Aug 09, 2022 04:10PM ET
Updated Aug 09, 2022 06:11PM ET
By Tiyashi Datta
(Reuters) -Roblox Corp missed estimates for quarterly bookings on Tuesday, in yet another sign the gaming industry is facing a slowdown after a pandemic-fueled boom, sending shares of the gaming platform down around 19% in extended trading.
Roblox's downbeat results come as firms ranging from console makers and chip makers to video game publishers warn of a slowdown in the gaming world as red hot inflation hammers discretionary spending, challenging the idea of a "recession proof" industry.
The California-based Roblox, famous for its games "Jailbreak" and "MeepCity", posted net bookings of $639.9 million in the second quarter, compared with $665.5 million a year earlier. Analysts were expecting $644.4 million, according to Refinitiv data.
"We have seen impacts across the video game space due to changes in consumer discretionary spend, and that appears to be somewhat more pronounced in the free-to-play genre and mobile gaming," said Corey Barrett, head of TMT research at M Science.
Gaming demand, which saw a boom during the pandemic, slowly subsided as restrictions ease and people venture outside for other entertainment options.
While video gaming publishers Take-Two (NASDAQ:TTWO) Interactive Software Inc and Electronic Arts Inc (NASDAQ:EA) forecast weak annual sales, chipmaker Nvidia (NASDAQ:NVDA) Corp on Monday warned of lower second-quarter revenue on weakness in its gaming business.
Last month, Xbox-maker Microsoft (NASDAQ:MSFT) reported a slump in gaming revenue, while PlayStation-maker Sony (NYSE:SONY) trimmed its forecast on waning consumer interest in video games.
On an adjusted basis, Roblox reported loss of 30 cents per share, compared to estimates of 21 cents per share loss, according to Refinitiv IBES data.
Bookings for July were up between 8% and 10% year over year, while Daily Active Users (DAUs) rose 26%.
Roblox shares fell 15% to $40.40 in after hours trading on Tuesday. The stock has shed more than 50% in value so far this year.
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Written By: Reuters
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