Roblox stock sinks after November update shows slowing growth

Shares of Roblox dropped 16% on Thursday after the game company’s release November business update that shows its growth slowing down and its daily user earnings dwindling.

The company said estimated bookings ranged from $222 million to $225 million for the month. That’s a 5% to 7% annual increase. However, in November 2021, Roblox said estimated bookings for the same period increased 22% to 24% year-over-year. Roblox said the strength of the US dollar against the euro and pound has affected its business.

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Roblox calls its revenue booking number. The company generates revenue from the sale of a virtual currency called Robux, which players use to dress up their avatars and purchase other premium features in the game.

Roblox’s average bookings per daily active user are between $3.92 and $3.97, down 7% to 9% from a year ago.

Total daily active users grew 15% from November 2021 to 56.7 million users, but last year the company reported a 35% growth.

Roblox’s update comes amid an increasingly weak video game industry. Last month, Take-Two . interactionthe company behind games like Grand Theft Auto, cut its outlook for the current quarter and for fiscal 2023, blaming “current macroeconomic conditions.”

“Our bearish forecast reflects changes in our process, volatility in exchange rates, and a more cautious view of the current macroeconomic landscape, particularly in the mobility sector. action,” Take-Two CEO Strauss Zelnick said in a statement on 7 November.

In October, Apple also warns of weakness in digital advertising and games when reporting fourth quarter earnings. “Services in particular, we expect to grow, but will be impacted by the macroeconomic environment, which increasingly affects foreign exchange, digital advertising and gaming,” said CFO Apple’s Luca Maestri said during the company’s latest earnings call.

Shares of Roblox are down about 73% year-to-date.