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Roblox Shares Tank After Weak Forecast, Fueling Fears of Slowdown in Gaming

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Shares of Roblox (RBLX.N) plunged by 17% on Thursday after the gaming platform issued a weak forecast for its 2025 bookings, sparking concerns about a slowdown in its growth following years of rapid expansion. The company anticipates bookings to fall between $5.20 billion and $5.30 billion for the year, with the midpoint falling short of analysts’ expectations, which were pegged at $5.27 billion.

The forecast adds to the growing unease within the video game industry, which has been facing sluggish growth. Electronic Arts (EA.O) also recently reported weak bookings, primarily due to its underperforming soccer franchise. However, Roblox’s projected growth still points to a third consecutive year of approximately 20% growth in bookings, even as the broader gaming market struggles with weak consumer spending due to inflation.

Roblox’s Chief Financial Officer, Michael Guthrie, defended the company’s performance, noting that Roblox continues to grow at a rate significantly higher than the overall gaming industry, which grew by just 2.1% in 2024 according to Newzoo. The platform has thrived by expanding into new game genres, especially those targeting older players, and by unlocking new revenue streams through ads and e-commerce. Additionally, Roblox’s free-to-play model and its user-generated content have helped the platform weather the broader gaming slowdown.

Despite the weak forecast, Wedbush Securities analyst Michael Pachter dismissed the market’s reaction, calling it “unwarranted” and “irrational.” He maintained an “outperform” rating on Roblox stock, with a price target of $83, the highest on the street.

Roblox’s daily active users fell to 85.3 million in the fourth quarter, down from 88.9 million in the previous quarter. Bookings for the quarter were $1.36 billion, slightly missing analysts’ estimates of $1.37 billion. Guthrie attributed the weaker results to tough year-over-year comparisons, notably following the PlayStation launch, which drove a surge in new users and spending in the same period last year. He also pointed to the platform’s suspension in Turkey, where Roblox was banned due to safety and child abuse concerns, as another factor impacting growth.

 

Boeing Strike Could Drag On as Workers Push for Higher Wages, Union Leader Says

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The ongoing strike at Boeing, involving more than 30,000 members of the International Association of Machinists and Aerospace Workers (IAM), “could go on for a while,” according to union leader Jon Holden. Workers are demanding larger wage increases and the restoration of a defined-benefit pension plan. The strike began on Friday after workers overwhelmingly rejected a new contract offer from Boeing, despite Holden’s endorsement.

Negotiations are set to resume next week under the supervision of federal mediators, following a resounding 94% vote against the initial contract proposal. Boeing had offered a 25% wage increase over four years and a commitment to build its next commercial jet in the Seattle area. However, workers expressed frustration over stagnant wages and rising living costs, noting that the removal of a performance bonus would effectively negate much of the proposed salary increase.

Holden emphasized that union members feel they have unprecedented leverage and are determined to continue the strike until their demands are met. “Our members are confident… so it could go on for a while,” he said in an interview with NPR.

Boeing’s stock fell 3.7% on Friday, continuing a downward trend that has seen the company’s market value shrink by $58 billion this year. With Boeing facing $60 billion in debt, a prolonged strike could have severe financial implications for the company, as well as airlines and suppliers reliant on Boeing’s jet production.