Roblox Forecasts Lower Bookings Due to Algorithm Changes and Safety Measures
Roblox reported a steeper-than-expected decline in third-quarter bookings, citing changes to its recommendation algorithm that shifted younger users toward less monetizable games. Additionally, new safety measures have reduced user engagement and in-app purchases. The company now expects bookings between $1.58 billion and $1.65 billion for the quarter, below analyst estimates of $1.77 billion. As a result, its shares fell 14% in after-hours trading. The changes were aimed at improving long-term user retention but have caused short-term monetization challenges. Roblox also introduced age verification steps that made it harder to sign up and access certain features, further affecting engagement. Despite the drop in second-quarter daily active users (DAUs) by 7% sequentially, DAUs still rose 10% year-over-year. The company is focusing on attracting older users and expanding internationally as part of its strategy to diversify revenue sources.
Tickers: $RBLX
Topics: algorithm changes bookings forecast safety measures share price decline