Cash Grab

Image source: Cassiano Correia - Shutterstock

What's going on?

You might want to double-check your bank statement if you have kids, because Roblox posted strong quarterly earnings earlier this week on the back of a lot of in-game purchases…

What does this mean?

Roblox is every preteen’s go-to at the best of times, but it becomes a must-have when the real world is in lockdown. That’ll be why the number of daily active users surged almost 80% last quarter compared to the same time last year, and why they played almost 10 billion hours on the platform overall.

Plenty of users is all well and good, but investors are more interested in how successfully Roblox is monetizing them. Pretty successfully, it turns out: the amount of virtual currency – which users buy using, y’know, real currencies – grew by an better-than-expected 46%, and investors sent the company’s shares 6% higher.


Why should I care?

For markets: Kids are hooked.

With the world opening back up again, investors might’ve been nervous that kids would start losing interest in the game. Roblox certainly was, acknowledging in March that hours spent on the platform could drop by as much as 11% this quarter. But the Ro-pioid addiction might well and truly have set in: even in less-restricted April, daily active users were up 37% compared to the same time last year.

The bigger picture: This is a pause, not a game over.

Despite impressive earnings from Roblox this week and Activision Blizzard last, a new report suggests revenue in the global gaming market will actually drop off this year. But that’s probably just down to last year’s lockdown-driven boom, which saw revenue in the market grow by 23% compared to 2019. Things are expected to pick up again imminently, with the industry expected to grow 16% over the next two years. That’ll mostly be driven by mobile gaming, but console games are expected to play their part too – especially when gamers are finally able to get their hands on long-delayed consoles.

Originally posted as part of the Finimize daily email.

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