Roblox Faces Strong Competition From Meta And Epic Games In The Metaverse
Roblox has successfully increased revenue and attracted new users by improving the user experience within their game-oriented metaverse. While strong bookings performance in previous quarters and monthly data reported through March have given investors peace of mind for the time being, executives must remain vigilant of Meta, a competitor willing to lose billions of dollars a year to build its Horizon Worlds.
According to Forbes, Nick McKay, Vice President of Equity Research at Wedbush Securities, suggests the introduction of ads and a more open economy to accelerate bookings.
“Because they’ve been performing so well in terms of bookings growth, that decreases the pressure on them to introduce new products,”like new marketplaces and ads on user-generated content, “over the near term.”
says Nick McKay
Analysts attribute the booking growth to consistent gains in daily active users, which increased 22% YoY in February and 26% YoY in March. Bookings, the company’s measure of the virtual Robux currency users spend playing, have also seen steady increases in the 20% range.
Roblox users purchase Robux to buy in-game assets such as special powers, virtual clothing, and accessories for their avatars. The company’s open-ecosystem approach allows game developers to create content and earn Robux, which can be cashed out and spent within the metaverse.
As Roblox seeks profitability, it faces growing competition in the metaverse sector. While benefiting from its “first-mover advantage,” Meta and Epic Games competition cannot be ignored. Epic Games recently announced during the Game Developer’s Conference in March that its Fortnite multi-player battle game will add user-generated monetization and open-ecosystem marketplaces, posing a potential threat to Roblox.
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