Roblox Blames Its Own Algorithm For A 70% Share Price Crash

Roblox shares fell 70% after second quarter results showed monetisation 2% below the company's own guidance. Revenue for the quarter still rose 36% to $1.5 billion. Daily active users fell for the third quarter running, and that is the number investors sold on.

The count now sits at 123 million, down from a peak of 152 million. That peak is not old news. When Roblox's 2025 engagement figures landed in Matthew Ball's industry report, the platform was pulling more than 10.25 billion hours a month, more than Steam, PlayStation and Fortnite combined, and accounting for 67% of all non-China growth in the games business. Months later its chief financial officer is explaining a shortfall to investors.

Naveen Chopra told the earnings call that engagement moved away from what he described as high-monetising 2025 vintage viral games and toward newer and evergreen experiences that earn less per hour. Grow a Garden was last year's breakout, and nothing has replaced it.

"This underlying mix shift was compounded by changes in our recommendation algorithm, which optimises for long-term retention and is, therefore, providing more impressions for highly retentive games at the expense of near-term monetisation. And in Q2, the bookings impact of this trade-off on younger users was greater than we anticipated."

— Naveen Chopra (via Games Industry)

Under-13 players are where the shortfall concentrated. Average bookings per daily active user in that group fell further than Roblox expected, and that is the same group the company has spent the past year building fences around. The child accounts system split young users into age bands with tighter content filtering and limited chat features. Chopra now says Roblox will use age-check data to sharpen its recommendations and mitigate the monetisation headwind, so the age information gathered for safety will also decide what the algorithm surfaces.

I don't play Roblox and I don't expect to, but I read its earnings calls anyway, because whatever this platform does to its recommendation feed sets the terms for everyone selling games to teenagers.

Roblox expects third quarter bookings between $1.58 billion and $1.65 billion, a year-over-year decline of 14% to 18%. Chopra said monetisation weakness is likely to continue. The company declined to issue revised full-year guidance at all, citing increasing variability in the fourth quarter.

Chopra also flagged that investments in AI tools, including the Build system announced in July, are expected to push infrastructure costs higher, while listing those same investments among the trade-offs meant to secure the platform's position. He told investors the company's expectations for the rest of the year had changed considerably, then said Roblox retains conviction that it is making the right calls.

I think the awkward part is that Roblox is being punished for something its critics spent years demanding. Serving under-13s fewer of the games that monetise hardest is what safety campaigners asked for, and the cost of it showed up in one quarter's bookings.

The bet on adult players carries more weight now. Roblox raised developer payouts by up to 42% on spending from US users aged 18 and over, chasing a segment that grew by more than 50% and spends roughly half again as much as younger players. The company has paid out over $1.5 billion through DevEx this year. If the under-13 cohort is being monetised more gently by design, the adult side has to make up the difference.

The money inside the platform is real enough to be worth stealing. Ukrainian hackers in Lviv Oblast were detained after allegedly compromising more than 600,000 Roblox accounts and reselling them for close to $250,000, using stolen cookies and malware disguised as free Robux generators. Accounts fetch those prices because Robux and rare items do, which is the same economics the earnings call is arguing over from the other end.

None of this ends the platform. 123 million people still open Roblox on an average day, and revenue still grew 36%. The direction of the player count has changed, and so has the company's willingness to put a number on the rest of the year.

I don't read the 70% as a verdict on Roblox's future so much as the bill for the first quarter where safety and monetisation pulled against each other in public.

Read also, our updated list of KAIZEN codes for August 2026, covering the active rewards for the Jujutsu Kaisen inspired Roblox project and how to redeem them through the in-game Gear menu.