Roblox losses are exploding into the millions. Are they investing in Metaverse Tech?

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Roblox losses are exploding into the millions.  Are they investing in Metaverse Tech?

Roblox has experienced a loss in the last 6 months of 22.11%. This despite a record number of users. The company’s profits have plummeted due to huge investments, which has fans wondering if a proper metaverse experience is on the way.

In the last 3 months ending in June, Roblox losses amounted to $176 million. This figure increased by 25.91% compared to the quarterly loss of last year – 140 million dollars.

“The increase in losses is due to increased costs to support the growth of the business,” explained Roblox.

Roblox losses

The company has faced shareholders with the promise that they will invest heavily in the company’s future. Roblox’s spending spree on goods and equipment in 2022 totaled $135 million. Last year, the bill was only $45 million.

Roblox Business Manager Craig Donat said the company is investing in employees, increased server capacity and global data centers.

“We’re really in investment mode, and that’s going to dampen profits a bit, but these are investments that are the right investments for us. They will pay off in three to five years.

Another factor weighing on earnings is that the company cut user lifetimes from 23 months to 25 months in the second quarter. This resulted in a decrease in recognized revenue of $40 million.

Roblox Metaverse

It has been suggested that Roblox was one of the first successful metaverses, alongside Minecraft, in theory. donation says, however, that they’re still in their infancy, with interoperability between metaverses and full immersion still not there.

“There’s so much more, when we think about where we are in the metaverse journey, we’re probably somewhere in the first run. Right now we’re just building the stack. We all build the stack.

Roblox has a long history of partnering with business partners such as Gucci, through which major brands create experiences for Roblox fans within their own brand universes. They even have paired with Spotify for a musical world. This all sounds rather Metaverseish.

Roblox reservations are on the rise

Roblox calls sales of its virtual currency – Robux – “reservations”. Players use Robux to purchase digital items like avatars and premium features.

The company’s revenue in the last quarter from bookings has increased significantly. From $841 million in the first half of last year, it climbed 34.15% to $1.12 billion in June. This is still down from the same period last year which was $1.31 billion.

Roblox sees losses soar to $340 million by mid-2022

Daily active users

While revenue is down, Roblox’s total daily active user (DAU) count is getting gangbusters. In July, Roblox’s DAU hit an all-time high (ATH) at 58.5 million users. It is thanks to the children who have been locked down during the pandemic, all over the world.

Chief Executive Officer (CEO) of Roblox, David Baszucki, said the company continues to drive users and engagement globally. The goal is to expand the penetration of Roblox in all age groups and in all countries.

“On the vision side, our layered clothing system is just a first step towards highly personalized avatars across the platform. Our voice system is rolling out and is a great sign of the future of how people will communicate on platforms like Roblox. And our physics-based materials system is widely acclaimed by our developers as the next step in bringing Roblox to a more realistic look and feel. Finally, I would like to highlight that we continue to work on innovative immersive native monetization systems, and we plan to deploy a test of our immersive advertising system later this year. »

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