Roblox forecasts quarterly bookings below estimates amid age-verification challenges

Gaming platform Roblox has forecast its third-quarter bookings will fall short of Wall Street's expectations, a projection that led to an 11% drop in its shares in after-hours trading.

The company attributes this anticipated shortfall partly to the implementation of stricter age-verification measures. While these steps are intended to bolster player safety, they have inadvertently created hurdles for new user onboarding and reduced access to certain features that are crucial for maintaining user engagement.

Roblox stated that the short-term impact of these age-checks, particularly on younger users, has been in line with their expectations. The company noted an increase in age-check penetration among younger cohorts. However, the overall effect appears to be a drag on bookings.

For the third quarter, Roblox expects bookings to range between $1.58 billion and $1.65 billion. This projection falls below the consensus estimates of $1.77 billion compiled by LSEG, signaling investor concern over the platform's growth trajectory.

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To date, the short-term impact from Kids and Select on engagement and bookings has been in line with our expectations, and we have seen an increase in age-check penetration in younger cohorts.