The news: Roblox struggled through much of 2022 as metaverse hype faded, but it showed signs of reversing its fortunes in the fourth quarter.
Expanding the brand: Roblox’s painful 2022 was largely due to a failure to expand its user base beyond children. Its reputation as a children’s video game propelled it to success during the pandemic but also invited repeated controversies.
How does the metaverse fit into advertising? Roblox managed to emerge from a difficult year in a relatively healthy position, but much of the hype around the “metaverse” has cooled significantly among investors and advertisers. And with the ad market in uncertain territory, interest may not pick back up anytime soon.
Our take: Roblox may have performed well in Q4, but its (and the metaverse’s) place in the advertising world is more uncertain than ever. Though optimism is picking up about the ad industry’s outlook, shifts in loyalty mean that launching a costly one-time Roblox activation may be far down on advertisers’ list of priorities.