Roblox (RBLX 0.84%) is a gaming platform that lets players personalize their avatars with items like clothing, gear, and simulated gestures. The site also includes experiences that players can join and play together. 

The site is free to join but has plenty of features that players need to pay for. That's how Roblox makes its money -- by selling the in-game currency (Robux) that's required to buy featured items or enter certain areas on the platform. The more time players spend on the platform, the higher the likelihood they will spend Robux. Therefore, reopening economies could present a headwind for Roblox as kids (who represent a majority of the platform's users) have less leisure time and return to school and resume other activities. 

Three kids on tablets in the backseat of a car.

Image source: Getty Images.

Engagement is slowing in regions with high vaccination rates

Roblox reported second-quarter financial results on Aug. 16 for the three months ending June 30. The announcement highlighted the effect reopening economies are having on time spent on the Roblox platform. The company breaks down engagement from different regions.

Interestingly, engagement from users in the U.S., Canada, and Europe dropped off from the same time last year and the quarter before. Uncoincidentally, these areas have some of the highest vaccination rates among their population and are subsequently further along in reopening their economies. 

To quantify the effect, time spent on Roblox in the U.S. and Canada across all users in the second quarter was 2.9 billion hours, down 9% from last year's 3.2 billion hours during the same quarter. That figure is also down from the 3.2 billion hours engaged from the first quarter of this year.

Similarly, although not as significantly, time spent on Roblox decreased in Europe in the most recent quarter, dropping 2% to 2.36 billion hours from the 2.41 billion hours in the year before. The drop was more noticeable in Europe from the previous quarter, where the total time spent on Roblox was 2.73 billion hours.

Those two regions account for more than 50% of the total 9.2 billion hours of engagement on Roblox in Q2. The trend could worsen as more of the world gets vaccinated against COVID-19, and economic reopenings gain steam. That being said, another change of direction is not out of the question. The delta variant is causing some economies to rethink reopening strategies, and other variants in the future could further hamper the reopening efforts.

What this could mean for investors 

The reversal of high levels of engagement as economies reopen is to be expected and not necessarily a feared outcome. Shareholders might want to breathe a sigh of relief that the reversal of the trend has been modest so far. Consider that at the pandemic onset, overall engagement on the platform jumped by 164% from the year before. To give back 9% and 2% of that increase from the U.S., Canada, and Europe is not a terrible outcome following such dramatic growth.

Still, this was only the first quarter of economic reopening efforts, and decreasing engagement could continue. This is a challenge that management will likely have to navigate for several quarters. If Roblox can keep those decreases at less than 10%, investors should be pleased with the results each quarter.