TLDR
- Roblox (RBLX) partners with International Age Rating Coalition to replace existing content labels with region-specific ratings from authorities like ESRB and PEGI
- The company is diversifying revenue streams through new advertising initiatives, including Rewarded Video ads in beta partnership with Google
- Roblox launched IP License Manager connecting creators with brand owners like Lionsgate, Netflix, Sega and Kodansha
- Stock has gained 105% in past six months but trades at premium valuation with forward P/S ratio of 12.22 versus industry average
- Analyst consensus estimate for 2025 loss per share has widened from $1.38 to $1.71 over past 60 days
Roblox Corporation made two major moves this week that could reshape how the gaming platform operates globally. The company announced a partnership with the International Age Rating Coalition and revealed progress on new revenue initiatives.
The $90 billion market cap company will replace its current content maturity labels with standardized ratings from regional authorities. The system will use familiar ratings from organizations like the Entertainment Software Rating Board in the United States and Pan European Game Information in Europe.
Matt Kaufman, Chief Safety Officer at Roblox, said the partnership should give parents more clarity about age-appropriate content. The change affects a platform that serves millions of users across different countries with varying cultural standards.
The International Age Rating Coalition system covers nine rating authorities globally. These groups serve regions with more than 4 billion people combined.
Patricia Vance, president of ESRB and IARC chairperson, highlighted the benefits for families using Roblox worldwide. The new ratings will reflect local cultural norms rather than using a one-size-fits-all approach.
Developers will complete a single questionnaire to receive ratings for multiple territories. This streamlines the process compared to applying for ratings in each region separately.
New Revenue Streams Take Shape
Roblox has been testing new ways to make money beyond its virtual currency system. The company rolled out Rewarded Video ads in beta through a partnership with Google during the second quarter.
Nearly 100 publishers have integrated the ad format so far. The company designed the ads to work on lower-end devices, making them accessible across its global user base.
The platform also launched its IP License Manager this quarter. The tool connects creators with established brand owners for licensing deals.
Partnerships with major entertainment companies are already in place. Lionsgate, Netflix, Sega and Kodansha have signed on to work with platform creators.
Stock Performance and Valuation Concerns
Roblox shares have jumped 105% over the past six months. This outpaces the broader gaming industry’s 25.6% gain during the same period.
The stock now trades at a premium compared to competitors. Its forward price-to-sales ratio sits at 12.22, well above the industry average.
Take-Two Interactive and Electronic Arts trade at much lower valuations. Their forward P/S ratios are 5.95 and 5.34 respectively.
Wall Street analysts have grown more cautious about Roblox’s earnings outlook. The consensus estimate for 2025 loss per share has widened from $1.38 to $1.71 over the past 60 days.
Several investment firms maintain positive ratings despite the premium valuation. BMO Capital kept its Outperform rating with a $150 price target, pointing to user engagement growth.
Oppenheimer also maintained an Outperform rating with a $158 target. The firm acknowledged ongoing challenges with platform abuse while staying optimistic about the company’s direction.
Wedbush supported its Outperform rating with a $165 price target. The firm cited improvements in child safety and successful recent game launches as positive factors.
TD Cowen took a different approach, raising its price target to $77 from $54 while keeping a Sell rating. The firm noted changes in user behavior that mirror social media interactions.
The company reported 27% revenue growth over the last twelve months. This growth supports its expanding global presence despite current valuation concerns.
Roblox has not announced a specific timeline for implementing the new rating system across all regions.
