Roblox Share Price Explained: RBLX Stock Trading Guide

Video games and Esports are not only played for entertainment; many players use games to socialise with friends remotely. One of the innovative companies in the video games and esports industry is Roblox Corporation (RBLX).

This article explores how the Roblox gaming platform works, its stock market performance, and how to trade Roblox (RBLX) share CFDs.

Main Points:

• Roblox Corporation operates an online gaming platform primarily used by teens and children.
• Roblox's revenue streams include the sale of its in-game virtual currency (Robux), advertising and licensing partnerships, and royalty fees.
• Roblox went public on the New York Stock Exchange (NYSE) through a direct listing in February 2024.
• Traders can open buy or sell positions on the rising and falling prices of Roblox shares through contracts for differences (CFD).

What Is Roblox Corporation?

Roblox Corp. is an online gaming company primarily focused on entertainment, interactive 3D experiences, and user-generated content. The company's multiplayer online platform co-hosts millions of virtual worlds. Although primarily aimed at children and teens, it enables users of all age grades to compete, explore, and build relationships. Roblox headquarters is based in San Mateo, California, and has a global reach across the US, Europe, and the rest of the world.

An Overview of the Roblox Platforms

To achieve optimal user experience and foster seamless communication, and connection, the company provides the following platforms:

• Roblox Studio: A design tool that allows developers and creators to build and publish 3D worlds.
• Roblox Client: A program that allows users to engage in virtual 3D spaces.
• Roblox Cloud: This consists of the services and underlying systems that maintain the platform's functionality.

How Does Roblox Make Money?

Roblox makes money through four distinct business segments:

• Robux: Most of the company's revenue is generated through the sales of its in-game virtual currency, Robux, which players spend on virtual items created by the platform's developers.
• Advertising: Roblox monetises its platform by partnering with brands and advertisers such as Nike (NKE), Disney, and Lego. These brands promote their products through targeted ads displayed to users within the platform.
• Licensing: Roblox also monetises its intellectual properties (characters, branding, and other assets) by licensing to third-party companies. This additional revenue stream concurrently boosts Roblox's brand awareness.
• Royalty Fees: Roblox makes money from royalty fees by requiring companies to pay a fee to use its developer-generated content and other intellectual properties (IP).

The History and Key Developments of Roblox Corp.

The founders of Roblox are David Baszucki and Erik Cassel. In 2004, the duo originally launched the platform as DynaBlocks. However, after passing the beta test in 2006, DynaBlocks was rebranded as Roblox and opened to the public.

The first currencies introduced on the platform were called 'Roblox Points,' which were awarded as daily login bonuses or for playing mini-games. However, on 14 May 2007, this currency system was replaced by Robux to streamline in-game transactions.

Roblox expanded its global reach in 2019 by providing multiple language options, including Chinese, German, and French. Within the same year, the company's monthly active users reached 100 million.

Moreover, the COVID-19 pandemic in 2020 led to a significant increase in Roblox daily active users by 85% to reach 32.6 million, while revenue rose by 82%, amounting to $924 million.

In addition, it may be worth noting that Roblox Corporation bypassed the traditional initial public offering (IPO) to directly list its shares on the New York Stock Exchange in February 2021.

Continuing its monetisation efforts, in 2023, Roblox launched a partner program for advertisers to use immersive ads on its platforms.

Roblox's Compared to the Online Gaming Industry

Roblox has witnessed a consistent growth in revenue and active users. In 2023, Roblox's revenue grew 31.08%, improving its market share in the global gaming industry to approximately 0.51%, with over 79.5 million daily active users (DAU) worldwide.

In 2024, the global video game market was worth $455bn, and the number of mobile gamers worldwide was 2 billion. China and the United States were the biggest markets, accounting for nearly half of the global gaming revenues, while Indonesia was the market with the biggest gaming reach.

Who Are Roblox's Competitors?

For users and their engagement hours, Roblox competes with:

• Top tech companies such as Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), and Tencent (0700.HK).
• Media companies such as Comcast (CMCSA) and Disney (DIS).
• Gaming companies like Electronic Arts (EA) and Take-Two (TTWO).
• Streaming platforms include Spotify (SPOT), Netflix (NFLX), and YouTube.
• Social media platforms such as Facebook (META), Pinterest (PINS), and Snapchat (SNAP).

For developers and creators, Roblox competes with gaming platforms such as Epic Games, Unity (U), Valve Corporation, and Supercell.

The Financial Performance of Roblox Stock

Roblox corp. has a market capitalisation of $26.27 billion, outstanding shares of 598.5 million, and a public float of 503.39 million.

Roblox stock rose to an all-time high of $141.60 on 22nd November 2021 and declined to an all-time low of $21.65 on 10th December 2022.

In 2023, Roblox stock increased by 39.44%. As of August 2024, RBLX stock performed 47.55% (YTD) better than its competitors' average performance of 25.84%.

Factors Affecting Roblox Stock Performance

• Tech Stocks: The overall performance of the technology sector can boost or cause a downturn in Roblox's stock price.
• Financial Performance: Roblox's ability to improve its profitability is a critical factor affecting its stock performance.
• Metaverse Development: Roblox's future growth is dependent on the success and viability of the metaverse industry.
• User Growth: How Roblox performs relative to its goal of a billion daily active users will affect its stock performance.
• Competition: As technology evolves, Roblox's market share will be challenged by the rise of new gaming platforms.
• Market Valuation: Roblox's high valuation as of 2024 may limit the upside potential of the stock and pose risks to the company if it fails to meet growth expectations.

How to Trade Roblox (RBLX) Share CFDs

Roblox trades on the New York Stock Exchange (NYSE) with the 'RBLX' ticker. Traders can also participate in the rising and falling prices of Roblox shares without being a shareholder by trading Roblox share CFDs on the Plus500 platform.

Trading shares CFDs (contracts for differences) involves opening buy or sell positions on a particular stock with the intention to make a profit, which is determined by the difference between the opening and closing CFD prices. Trading CFDs involves the use of leverage which may have a magnifying effect in potential gains. However, it can also lead to magnified losses.

Trading Hours for Roblox Share CFDs

On the Plus500 CFD trading platform, traders can monitor the real-time price movements of Roblox (RBLX) shares and trade from Monday at 3:30 PM CET to Friday at 10:00 PM CET. Please note that trading platform hours may vary depending on the individual operator.

Steps to Buy and Sell Roblox (RBLX) Share CFDs

To trade Roblox share CFD with Plus500, follow these steps:

• Create a trading account to access the Plus500 trading platform
• Search for Roblox (RBLX) on the platform search bar.
• Conduct market analysis on Roblox stock chart and fundamental drivers.
• Specify the number of shares you wish to open a position for.
• Specify your risk management orders, such as close-at-loss and close-at-profit orders.
• Confirm your buy or sell order for Roblox stock.
• Monitor, manage and close the trade as necessary.

Conclusion

Roblox Corporation's innovative approach to online gaming and user-generated content has established it as a key player in the gaming industry. For traders and investors, important factors to consider when evaluating Roblox's stock include its user growth, competition and the company's progress in monetising the metaverse. Additionally, Roblox's valuation and efforts to achieve profitability will play critical roles in determining its future stock performance.

If you want to buy and sell Roblox share CFDs, you can start trading Roblox share CFDs with Plus500.