Roblox Inc. is recognized as one of the leaders in creating the so-called “metaverse,” but one analyst believes that even social gaming platforms will be overwhelmed by competition.
“We think the development of the metaverse is a very important technology, but we think it will take at least 10 years to get there,” said Doug Creutz, a Cowen analyst who just started reporting for Roblox. says Mr.
“Roblox and the Metaverse: The Competition Will Go High as the (Virtual) Universe Is at Risk,” it said in a Monday memo.
“Current technologists and content owners are well aware of the potential power of the metaverse, so Roblox is likely to face very stiff competition,” he said.
Kreutz pointed out that the term “metaverse” was borrowed from Neil Stevenson’s 1992 science fiction novel. “Snow Crash” This follows a hacker/pizza delivery man protagonist who is literally named “Hiro Protagonist”.
“In technical parlance, this fictional place is known as the Metaverse,” reads the novel. “Hiro spends a lot of time in the Metaverse.”
According to Kreutz, people also think: “matrix” As a template for thinking about what the metaverse might look like.
“In 1999, a Warner Bros. marketing campaign asked the audience, ‘What is The Matrix?'” says Kreutz. “Here I propose to at least try to answer the question ‘What is the Metaverse? is.”
Here’s why Creutz refused to capitalize the “m” in the metaverse. It’s a concept as opposed to a real destination worth using proper nouns, like the Internet. )”
“ “You take the blue pill…the story ends. You wake up in bed and believe whatever you want to believe. You take the red pill…you stay in wonderland and the rabbit hole opens.” I will show you how deep it is.”
Croutz uses that quote in his notes when explaining how Roblox works in the metaverse.
“Is it a red pill/blue pill situation that still believes in predicting Roblox’s dominance in the sci-fi ‘metaverse’?” said Creutz.
Roblox has big plans for the Metaverse, but Creutz said the Metaverse “will be much bigger than what Roblox can offer, given the technical requirements and the need for diverse and engaging content. I think.
“As a metaverse destination, Roblox will face competition from a number of companies that are far superior in terms of technology and capital, and perhaps more importantly, in the Web2 era. It shows an overwhelming will to demonstrate its power to
People seem to have different ideas about what the Metaverse will look like, but it’s still imaginary. Kreutz said people are more likely to use science fiction movies and books to get ideas.
“Most of what companies like Roblox and Meta talk about today was imagined on pages and screens 40 years ago, if not earlier,” Cowen analysts said. rice field. Croutz said many people think of his Roblox as a template for virtual worlds, but he doesn’t think so.
“While we believe that the current entertainment experience that is mentally closest to the true Metaverse is not Roblox, [Take Two’s] ‘Grand Theft Auto Online,'” he said.
“But even if we’re wrong and the metaverse arrives sooner than expected, I’m skeptical that Roblox will find the edge and profitability there,” said Creutz. “Social media and search failed to recognize the importance of new platforms by incumbent technologists, allowing startups (Facebook and Google) to grow profitably and rapidly until it was too late. Interest in metaverse development is strong and far-reaching.As a result, success in the metaverse can be seen in the context of a highly competitive market.Positioned as a strong metaverse player, the more important We see many other companies with financial and content resources.
and Epic Games.
In August, Roblox’s stock took a hit after the company reported a surprising decrease in bookings, Although it was the second consecutive quarter of decline year-over-year, management quickly noticed an increase in bookings in July.
The company defines bookings as “revenue plus changes in deferred revenue and other non-cash adjustments during the period.” The significance of the reservation is because the company sells cryptocurrencies on the site that could be considered deferred revenue.
Back in May, Roblox shares came under fire after the company reported an unexpected drop in bookings, and Roblox shares fell. Record your worst performance of the day after publishing. The company lost more than a quarter of its value in the following trading session. Lighter than expected results As pandemic restrictions eased, children who were once stuck inside their homes were finding other ways to spend their time.
Roblox Direct listing in March 2021,and Beloved stock last Novemberwhen the company stated in its earnings report, suspension for three days on halloween weekend It didn’t fail to stop October’s growth. However, as restrictions have been relaxed, The kids put down their tablets and went outside to play As evidenced by Roblox results in February.
Of the 23 analysts covering Roblox, 12 are in buy grade, 8 are in hold, and 3 are in sell grade, with an average target price of $45.44. According to FactSet data, dating back to June 2021, all eight analysts covering Roblox had a buy-grade rating over six quarters.