What happened
Shares of Roblox (RBLX +4.86%) were up 2.5% as of 12:10 p.m. ET on Monday. The move coincided with Walmart's (WMT 0.41%) announcement that it was launching two experiences on the popular gaming platform -- Walmart Land and Walmart's Universe of Play.
The move won't do much to alleviate the pain investors have felt in Roblox year to date, with the stock down 65%, but it shows how big brands are increasingly viewing Roblox as a valuable marketing channel.
NYSE: RBLX
Key Data Points
So what
The timing shows that Walmart is trying to build buzz ahead of the holiday season. The company reported same-store sales of 6.5% in the fiscal second quarter of 2023, ended July 29, with a heavy sales mix leaning toward lower-margin categories like food and consumables.
Walmart Land, as one of the virtual worlds is called, will feature a virtual store with merchandise and unlockable tokens that can be earned while playing games. Walmart's Universe of Play will offer games and other features in what Walmart has dubbed "the hottest toy world of the season."
Obviously, Walmart is attempting to stir up buzz for toys and other merchandise going into the holiday quarter. It's also a win for Roblox, since users can spend the rewards on new items for their avatar. About 20% of Roblox users change the appearance of their avatar daily, according to a Goldman Sachs report.
Now what
Nike and other brands have invested in new experiences on Roblox to engage with younger audiences. It's another marketing channel for these companies. Walmart is seeing more of its customers spending time on Roblox, so it's an opportunity to stay connected.
For Roblox, it means more revenue growth from players spending time on the platform. Having multiple experiences available from major brands should continue to fuel its growing base of daily active users, which jumped 24% year over year to 59.9 million in August.
The average user spent just over $12 on extra content in the second quarter. More experiences can lift the total hours spent playing games and mean more revenue for Roblox.
