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Roblox The company lowered its forecast for annual bookings on Thursday, a sign that people were pulling back on spending within its video game platform amid an uncertain economic outlook and high levels of inflation.
Roblox shares fell more than 20% in early trading Thursday.
The lower forecast represents the latest pessimistic report from the gaming industry, which has laid off hundreds of employees and closed studios this year to confront falling demand.
Electronic Arts It also provided a weak revenue forecast earlier this week.
Roblox now expects full-year bookings to range between $4 billion and $4.10 billion, down from its previous forecast of $4.14 billion to $4.28 billion. Expectations for second-quarter bookings of between $870 million and $900 million were also below estimates.
The company said it was conservative about its expectations for the second quarter, as the Easter holiday, a period of high engagement on its platform, was during the first quarter of this year compared to the second quarter of the previous year.
The gaming industry is grappling with declining engagement, which is expected to keep growth in the PC and console market below pre-pandemic levels through 2026, according to research firm Newzoo.
The number of hours spent by players ages 13 and older on the Roblox platform rose 19% in the first quarter, the company's lowest growth rate in about two years.
“This is not unusual,” Roblox CFO Michael Guthrie said, adding that the company is adding a lot of older players who are taking some time to settle in and spend more time on the platform.
Roblox has also turned to digital advertising to diversify its revenue. Earlier this month, it began running virtual billboards featuring content from brands like Walmart And Discover Warner Bros for users on its platform.
Guthrie added that Roblox will build out the infrastructure for the ad platform in 2024 and begin providing ad revenue projections in 2025.
