Keep up with the innovative tech transforming business
Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.
The metaverse might not be going great for everyone, but the concept continues to…have some legs…for Roblox.
The company released its Q4 and 2022 earnings earlier this month, and despite a slowdown in the overall tech and gaming markets, Roblox beat earnings estimates.
Roblox CFO Mike Guthrie said on the company’s earnings call that its core markets—the US, Canada, the UK, Scandinavia, and New Zealand—grew as younger users continued to engage with the platform beyond the pandemic peak.
“They popped up very high during Covid because we were so well established there, but we are now through that and now growing above the peaks that we had in terms of the user base in Covid,” Guthrie said. “In particular, our younger users continue to grow, even though that’s the most highly penetrated part of the market.”
Revenue for 2022 was $2.2 billion, up 16% year over year, while bookings, which Roblox generates from sales of its virtual currency, increased 5% year over year to $2.9 billion for 2022. The company also posted a record-high 65 million average daily active users in January, with users spending over 5 billion hours “engaged” with the platform that month—a 19% increase for both from the same time last year.
But despite the rising revenue, the company posted a nearly $1 billion loss in 2022, almost double its 2021 net loss of $504 million.
Roblox’s increasing revenue and engagement come at a time when gaming companies are struggling to maintain the momentum they enjoyed at the peak of the pandemic. Overall total consumer spending on video games in the US totaled nearly $57 billion in 2022, a 5% decline compared to the $60 billion spent in 2021, per the Entertainment Software Association and the NPD Group data.
Mat Piscatella, a video game industry advisor at the NDP Group, said in a press release that the decline could be attributed to “continued supply constraints of console hardware, a relatively light slate of new premium releases and macroeconomic conditions.”
Zoom out: Roblox’s highest growth in Q4 came from 17–24 year olds, a category that grew 31% year over year and accounted for 22% of all daily active users in the quarter. Growth in daily active users under 13 year olds grew 11% year over year in Q4 2022. The company reported having 26 million daily active users under 13 years old in Q4, good for about 44% of all active Roblox players in the quarter.
But because minors make up the majority of Roblox’s player and developer base, the company has faced criticism over the labor some underage developers have put into the platform. For its part, although only 1,000 Roblox games made more than $30,000 in 2021, Roblox claimed that it paid creators and developers on the platform more than half a billion dollars overall that year, according to The Guardian.