What Happened?
Shares of gaming metaverse operator Roblox (NYSE: RBLX) jumped 5.3% in the afternoon session after a Bloomberg report highlighted the lucrative potential for game developers on its platform, with some creators selling their games for seven- and eight-figure sums.
The report detailed how the platform's growth, which is approaching 100 million daily active users, is turning some teen developers into millionaires. For instance, the game 'Blue Lock: Rivals' was reportedly sold for over $3 million after generating $5 million a month in purchases. This thriving creator economy is the lifeblood of Roblox's business model. When developers create popular games, it attracts more users to the platform and drives spending on in-game items and experiences, from which Roblox takes a share. Positive stories about creator success can incentivize more developers to build on the platform, creating a virtuous cycle of content creation and user growth that boosts investor confidence.
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What Is The Market Telling Us
Roblox’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Roblox is up 88.8% since the beginning of the year, and at $111.15 per share, has set a new 52-week high. Investors who bought $1,000 worth of Roblox’s shares at the IPO in March 2021 would now be looking at an investment worth $1,599.
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