Recent Roblox downgrades
Some analysts have downgraded $RBLX recently, some commenting on poor graphics...these analysts are missing point. It was a choice and they are quickly improving.

Short thread on why these analysts have it wrong.

More simple primitives have allowed $RBLX to build thriving ecosystem of builders that will be difficult 4 other metaverse platforms to duplicate. Epic, RBLX biggest competitor today, relies on own internal developers to create the most popular content on its platform Fortnite.

$RBLX has always had a maniacal focus on making it easy for a non-programmer with little or no funding to build a creative game. It's the reason Roblox experiences have traditionally had lower graphic fidelity than games on other platforms.

Now that $RBLX has long tail of creators, and the technology has advanced, they are focused on up-leveling the tools and services for their builders to create world class experiences, without asking the creators to necessarily learn more coding.

..e.g. $RBLX provides creators library of materials (e.g., 🏖🧊🌊) that they can easily bring into experiences they r building. Allows creators who otherwise wouldn't be able to master the advanced physics necessary to physically recreate reality inside Roblox, to do just that.

My call to action for these analysts is to watch tech/product update from $RBLX recent dev conference and tell me they arent on clwar path to full fidelity, advanced 3D, simulation at scale

Roblox ($RBLX) - What Moves the Stock?
Roblox uniquely offers investors exposure to multiple growth megatrends, including mobile gaming, social networking, user-generated content, and digital identity, and ultimately the Metaverse.

We have analyzed the company a few months ago and what stood out is Roblox "aging-up" challenge. https://sltresearch.wixsite.com/slt-research/post/roblox
We believe that Roblox efforts to expand its TAM to older cohorts, particularly given the potential supportive network effects that come as a byproduct of the growing aged-up userbase, is key to drive steady long-term returns for investors, with significant optionality tied to several drivers, including advertising, ecommerce, and the wider Metaverse opportunity.

As per recent earnings, 13+ cohort is now making up the majority of DAUs. Unsurprisingly, the developer side of the marketplace is moving in lockstep with users, with the mix of
experiences classified as "aged up" expanding by almost 4x over the last year to 40%, up from 12% in 2020.

Roblox network effect is stronger if the userbase is aged-up. Indeed older developers are more likely to develop better and more sophisticated games, attracting older players on the platform and increasing monetization, which is attracting better developers and so on...
As a result, 13+ users spend more time on the platform quarters after quarters.

Roblox would have sufficient runway to more than double total DAUs by FY25 from aging-up alone. It would also allow the platform to keep its young users as they age through the years. Roblox loses a growth opportunity if can't retain this group as it ages and discovers more mature gaming options. Genre-diversification efforts in categories such as racing and shooting have improved the experiences for older audiences, but Roblox's blocky art style may not be attractive to such players.

To conclude, DAUs and Hours Engaged by Age are metrics you monitor carefully:
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This might be a contrarian take but I think Roblox will have no problem 'aging up' with their user-base. The question I have is:

"Is Roblox a one-generation fad?".

ie, will all Gen-Xers have fond memories and nostalgia for Roblox while the next generation doesn't get what is so great about it?

Seems like there is a generational cycle in culturally relevant apps (social media example): instagram --> snapchat --> TikTok. Seems like there's always a new platform for the next generation that takes hold and doesn't let go, but doesn't have the same appeal to following generations.
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It's better to create your own metaverse than buy NFT land in another metaverse project
2021 was the year of greed, mania, and euphoria for metaverse landholders. Many were buying tons of Ethereum and using it to buy NFT land in Decentraland, Sandbox, etc. with the hope of reaping passive income by renting them out to retailers looking to build a presence in that metaverse.

However, as we've seen in 2022 so far, prices for those lands have plunged significantly. Interest in metaverse land has diminished.

$META and $RBLX shares haven't done well this year as well. For Meta, investors didn't like how the company was burning a lot of cash for this project that would take years to develop. For Roblox, investors didn't see a reason to justify the high valuation when the company saw decelerating growth.

Personally, I think that the metaverse does have a place in the future and that Meta Platforms and Roblox are the better ways to play this growing trend. While Roblox is already the closest thing we have to a metaverse today, Meta Platforms could end up creating the main metaverse of the future.

As much as the bull thesis for NFT land was convincing, the thing that prevented me from considering an investment in buying an NFT of a parcel of land in Sandbox or Decentraland is that digital land can be printed by an infinite amount. It's not the real world where scarcity actually exists whether we like it or not. While Decentraland and Sandbox have limits on the number of parcels of land it has, people can create more metaverse projects and create more land in the process. Digital land inventories will continue to grow and with that, it's hard to see the value of digital land continue to grow in the process.

Also, many of these metaverse Web 3.0 startups are enduring a capital-intensive journey. Looking at the amount of money Meta Platforms is burning to create a tiny and low-functioning metaverse shows that building a fully functioning metaverse is a lot more expensive. These projects could see themselves running out of money (unless they choose to expand their land capacity and thus diluting existing landholders) and the value of that NFT land will become useless.

Adding on, with a limit on the size of a metaverse, the commercial opportunities will be limited. The number of people able to participate in that metaverse will be limited. Why should an investment with limited opportunities deserve a high valuation? What are the chances that this world will become the "San Francisco" of the metaverse?

I'm thankful that I didn't bet on the metaverse. Now, after considering the commercial opportunities and the chances that a project will become successful, I'm even more confident that $META and $RBLX can create the metaverse of the future. They're functioning businesses that have a lot of capital and resources to sustain the high costs of building a metaverse as well as being able to handle the unexpected costs that come with it.
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Another thing they’re really going to have to figure out is what experiences are the most sticky—that’s been the metaverse’s biggest problem. In theory worlds like Decentraland are cool, but I’d much rather play the Sims because you can do so much more and it’s highly addictive. It’s still way too early IMO
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Which company delivered the best earnings report this week? $RIVN $DIS $TTD $RBLX
Which company had the best earnings report this week?
4%Rivian $RIVN
45%Disney $DIS
50%The Trade Desk $TTD
0%Roblox $RBLX
22 VotesPoll ended on: 08/13/22
Metaverse Interoperability
The push for the metaverse continues to intensify, and with companies like $META, $U, $NVDA, $NET, and $RBLX being dubbed as "metaverse stocks," their latest earnings suggest that maybe the metaverse isn't the best thing to invest in right now, after all. In looking at the short term, it's easy to see how the metaverse isn't fully taken seriously.


While Zuck has one view of how the metaverse should/will develop, there's another group of people advocating for a much different approach to co-creating the metaverse: interoperability.


I think what I love most about interoperability is that it internalizes "it takes a village." This is in no way a slight to Meta because I really do want to see what it builds, but I think ultimately an interoperable metaverse will win the hearts and minds of people because they won't be stuck with assets they can only use in one place. When I think about the metaverse—or anything, for that matter—my mind immediately goes to what is the true value of being a part of a metaverse. As we all know, most things are a distraction if they're not helping us accomplish the personal goals that we've set for ourselves.

My concern over the metaverse—whether it's interoperable or not—is if it's making humanity marginally better or marginally not. Maybe one of the reasons why none of these ideas have gotten off of the ground in a major way yet is because they still aren't solving a problem; social media has largely solved the connectivity issue already. I think the best bet to get a metaverse off the ground is to start in a particular niche, solve a problem that only that tech can help you solve, and then scale up and work with other niches to build out an interoperable metaverse. It's not as sexy as saying you're building "the metaverse of all metaverses" but starting small can lead to major things, just think about how you were created.

“Enter by the narrow gate. For the gate is wide and the way is easy that leads to destruction, and those who enter by it are many. For the gate is narrow and the way is hard that leads to life, and those who find it are few." Matthew 7:13-14 ESV

With this in mind, my eyes will be set on the projects that take the narrow gate, not the wide one. It'll be interesting to see which metaverse projects become the most sticky, and what niche they begin in.

Where will your eyes be looking?
I created a Metaverse basket back in January. It consists of $NVDA, $U, $MTTR, $GLOB, and $ADSK. The basket is -26.9% (through 7/31). My benchmarks are easily beating it (-8.1% for $SPY and -11.5% for $QQQ). Globant and Autodesk are the best of the bunch as both are beating QQQ and barely trailing SPY. Moral of the story could be invest in the Metaverse but through stable, solid companies who are only wading into the pool via the stairs instead of launching in off the diving board.

All that being said, I'm still bullish on all five companies and have no intention of selling. No thesis has broken yet. I created the basket with a purposeful mixture of really risky (Matterport) up to not very risky (Autodesk and Globant).
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Roblox Q2 summary
$RBLX FY22 Q2
Revenue $591.2M, ⬆️ 30% YoY
Free cash flow $(57.3)M
Bookings $639.9 million, ⬇️ 4% YoY
DAUs 52.2M, ⬆️ 21% YoY, but down QoQ...best news was July DAUs they shared of 58.5 million, ⬆️ 26% YoY

Long term DAUs most important metric IMO, so happy RBLX shareholder
RBLX Earnings Preview
With 33% of the vote on our Twitter poll, $RBLX is in the lead for the most exciting earnings report this evening. Analysts expect revenue of $644.4m but could there be trouble ahead?

$NVDA recently posted preliminary revenue well below expectations showing only 3% revenue growth based on lower-than-expected gaming demand.

Could this spell trouble for $RBLX?

Here is how RBLX's revenue growth has compared to NVDA's.
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