Roblox shares plunged nearly 30% on Friday, putting the gaming platform on track for its biggest one-day stock decline on record after the company warned that changes to its recommendation system are weighing on in-game spending.
If the losses hold through the close, Roblox is set to erase more than $10 billion in market value. The company was valued at approximately $34.9 billion before the selloff.
The sharp decline came after Roblox forecast its first quarterly drop in bookings in four years, disappointing investors who had expected a smaller slowdown.
The company said it recently overhauled its recommendation algorithm to promote games that encourage long-term player engagement rather than titles designed to maximize short-term spending.
While the change is intended to improve the platform over time, it contributed to second-quarter bookings reaching the lower end of Roblox’s guidance at $1.56 billion as users spent more time in experiences that generated less revenue.
Company executives also warned that weaker monetization could continue into the current quarter.
For the third quarter, Roblox expects bookings to decline between 14% and 18% from a year earlier, a steeper drop than analysts had anticipated.
Adding to investor concerns, the company declined to update its full-year bookings outlook, citing ongoing uncertainty surrounding user spending. Bookings primarily come from purchases of the platform’s virtual currency, Robux.
Earlier this year, Roblox introduced age-based accounts and expanded age-verification tools designed to improve safety and tailor platform features to different age groups. While the changes strengthen user protections, they have also added pressure to near-term revenue growth.
Analysts also point to a more competitive gaming landscape later this year, with the highly anticipated launch of Grand Theft Auto VI expected to intensify competition for players’ time and discretionary spending.
