What happened
Shares of Roblox (RBLX 0.80%) were up 7.4% as of 2:02 p.m. ET on Friday following management's comments at the Roblox Developers Conference. Management announced several new features and tools for developers to create content, in addition to giving users new ways to express themselves on the platform.
But what moved the stock appears to be the announcement of immersive ads coming to the platform in 2023. Worries over Roblox's decelerating growth in revenue and bookings has weighed on a stock that has shed more than half its value year to date.
NYSE: RBLX
Key Data Points
So what
Figuring out new ways to monetize its 58 million users with advertising has been a top priority for management, and those innovations appear to be arriving soon. Roblox's user base has more than doubled over the last three years, but average spending per user on virtual currency (Robux) continues to trend down. In the second quarter, average bookings per user fell 21% year over year.
At the conference on Friday, the company announced that it would launch "innovative 3D advertising" that will enable brands and developers to take advantage of "never-before seen ad experiences."
Management also announced plans to launch new features on the marketplace that allow creators more control over the scarcity of virtual items they release.
Now what
The market is right to get a little more excited over the stock. The new controls over item scarcity in the marketplace could provide a much-needed lift to revenue growth. As highly prized items become more limited, it will naturally raise their value to users. This will incentivize more spending on virtual currency to acquire highly sought-after content.
With the new ads and marketplace changes coming, management has given investors clear catalysts to watch that could stimulate a turnaround for this top metaverse stock.
