Analyst expresses scepticism over Roblox’s metaverse vision

pcgamesn.com:

Investment analyst Clay Griffin of MoffettNathanson, a boutique research firm, has expressed scepticism about Roblox’s metaverse vision in a new report. Griffin suggests Roblox’s vision for the future of the sandbox game platform and metaverse may be overblown, and its efforts to focus on the big picture are simply obscuring the current setbacks the company faces.

An article published by MarketWatch and circulated via Dow Jones Newswire says the analyst’s report, titled Roblox: Growing Pains, Initiating at Underperform, $19 PT, describes Roblox experiences as “lightweight and derivative,” which may explain why the company is touting its central vision for the metaverse rather than addressing today’s challenges.

“But in a market increasingly fraught about the here and now, Roblox seems to want to pivot the narrative to a distant and, in our view, rose-coloured, picture of the future,” Griffin wrote. “And, of course, its expanded role in it.”

Roblox’s stock value has tumbled to about one-third of its value this year. In 2021, the company reached its peak capitalisation of $78 billion, while the cap was only $20.7 billion as of October 3 trading.

However, Griffin isn’t entirely down on the Roblox. He wrote that he expects a “reasonably good margin profile” for the metaverse company. However, he’s not convinced that “Roblox’s reality will be as grand as its vision.” Noting that Roblox is and remains primarily a games platform, he suggested advertising could be “material” for the company. However, he suggested it’s too early to tell what impacts these ad strategies might have on the company overall.

He also noted that Roblox is continuing to ride the wave of some of the expectations of what he deems “Metaverse mania,”