Gaming platform Roblox missed estimates for second-quarter bookings on Wednesday as waning demand for its online games and intensifying competition hurt growth, sending its shares down nearly 19 per cent.
The videogame industry is struggling with a slowdown in spending as inflation-weary gamers become more selective in picking popular titles.
"However, we plan to slow our headcount growth rate and expect to generate operating leverage beginning in fiscal year 2024 and generally through the end of fiscal year 2025," the company said in a regulatory filing.
U.S. spending on videogame content, including new games and character skins, was flat in the first half of the year, while console sales rose 23 per cent, according to data from gaming research firm Circana. Roblox, which operates a metaverse – an emerging virtual space where people play games and make transactions - is available on mobile devices, desktops and Microsoft's Xbox.
It reported 65.5 million daily users in the quarter, with a long-term goal of reaching 1 billion daily users.
The company, popular for games such as "Adopt Me!" and "Brookhaven", posted net bookings of $780.7 million in the quarter, missing analysts' average estimate of $784.9 million, according to Refinitiv data.
Roblox's results come on the heels of a downbeat forecast from Electronic Arts and "Grand Theft Auto" publisher Take-Two.
It reported a loss of 46 cents per share, slightly more than a loss of 45 cents per share estimated by analysts.
Net loss attributable to shareholders stood at $282.8 million in the quarter, compared with $176.4 million, a year earlier.