Roblox (NYSE: RBLX) stands out among video game companies, as players are fond of its platform since they can play games for free and find a wide variety of quirky and engaging games.
The company has seen its popularity rise as it attracts millions of video game enthusiasts to spend several hours on its global platform.
Games are extremely popular
The games on the platform are often sought after by millions of fans. One game, called “Steal a Brainrot,” emerged as the company’s third most popular one in only six months.
The games on Roblox range from collecting various creatures to more mundane ones, called “Grow a Garden” which does not have a hidden meaning. The enthusiasm for its games does not wane quickly. For instance, “Fish It!” has continued to increase in the number of games played for the past 12 months.
One of Roblox’s most favorite games was launched in 2020 – “Brookhaven” joined the ranks of the billion club, since it’s a game that has been played over and over to the tune of 75 billion times.
During the third quarter, Roblox “again attracted an impressive number of new users,” wrote Matthew Dolgin, a senior equity analyst for Morningstar. “While the third quarter is often the seasonal peak for daily active users (DAUs), this quarter set a record in all regions, driven by popular experiences “Grow a Garden,” “Steal a Brainrot,” and “99 Nights in the Forest,” wrote Dolgin. The number of daily active users rose exponentially from 111.8 million to 151.8 million.
The company could wind up as a larger player in the sector, similar to how YouTube has become a mainstream option for people watching videos, movies, and TV shows.
“If you think about the disruption that YouTube brought to video and the idea that anybody could create, anybody could distribute, you didn’t need $10 million, $20 million, $50 million budgets to create something,” said Manuel Bronstein, a Roblox advisor and a former chief product officer for Roblox, according to Barron’s. “We’re doing the same for games.”
One advantage Roblox has is that it does not spend hundreds of millions of dollars or more to develop games that will hopefully resonate with players and generate a profit. Take-Two Interactive Software (NASDAQ: TTWO) has spent an estimated $1 billion to $2 billion on its latest version of “Grand Theft Auto” as its investors lost patience with its delays on the game. Activision Blizzard, which was acquired by Microsoft (NASDAQ: MSFT), also invested hundreds of millions of dollars in games such as “Call of Duty” and “World of Warcraft.”
Generating revenue through virtual money
Since Roblox serves as a marketplace for these online games, similar to how YouTube allows content providers to post their videos, the company has developed a strategy for monetizing its platform, which gives developers the software to create them.
While its games are free, Roblox generates revenue through its virtual money called Robux that can only be used to purchase items for its avatars so they can improve their quest. This strategy has been commonly used by free online game companies for years.
The developers of the games receive 20% to 25% of the dollar-value revenue that is generated from the games created by them.
In the past year, the company produced $3.6 billion in revenue. However, the company prefers to calculate its revenue over two years because that is the average amount of time its customers remain on the platform.
“Our third-quarter results demonstrate the tremendous progress we’ve made toward our goal of capturing 10% of the global gaming market,” said CEO David Baszucki in a release.
Roblox is still working towards achieving profitability. During the third quarter, the company lost $256 million on $1.4 billion of revenue, but it generated $444 million in free cash flow.
“Monetization remains a mixed bag,” he wrote. “Bookings per daily active users (DAU) were slightly down sequentially but up materially year over year across all geographies except Asia-Pacific. Advertising still hasn’t become a meaningful contributor to sales, and management doesn’t expect that to change in 2026.”
One way the company could generate more revenue is by selling Robux directly from its website, instead of paying expensive processing fees for its virtual currency that is purchased from Google and Apple’s app stores.
During the third quarter, the company said over 150 million users, the majority of whom are under 17 years old, were playing games on its platform. The third quarter has become its peak season for playing games, just like some retailers count on Christmas sales in December to generate the bulk of their sales for the year.
While the company’s stock has risen exponentially year-to-date by 59%, it fell by 13% over the past month.
Roblox estimated revenue to generate $1.35 billion and $1.4 billion, and bookings between $2 billion and $2.05 billion for the current quarter.
For 2025, Roblox increased its revenue forecast to between $4.83 billion and $4.88 billion, compared to its prior revenue estimate of $4.39 billion to $4.49 billion.
Roblox also increased its estimate for its 2025 bookings to produce between $6.57 billion and $6.62 billion compared to its prior estimate of between $5.29 billion to $5.36 billion.
The company remains a favorite among its players, and many of the games wind up being viral. “Steal a Brainrot” drew the interest of 25 million players in September and has been played a whopping 42 billion times since it was launched in May.
“Roblox has built an impressive business that should lead to substantial growth,” since its “viral hits are becoming more frequent, but they remain unpredictable,” noted Dolgin.
The company’s impressive cash flow, slow addition of in-game advertising, and ability to draw interest among millions of players month after month give the company potential for additional growth as its revenue increases.
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