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Why Roblox Loses Billions

Wall Street Millennial | February 23, 2026



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In this video we analyze the video game platform Roblox and discuss why the company is losing money.

Check out our second channel Broken Business Models where we discuss unusual or otherwise suspect businesses that may be unviable: / @brokenbusinessmodels

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0:00 – 2:15 Intro
2:16 – 4:20 What Is Roblox?
4:21 – 5:21 Revenue Share
5:22 – 7:37 Unit Economics
7:38 – 10:39 Low Revenue Per Player
10:40 Free Cash Flow

Written by Wall Street Millennial

Comments

This post currently has 48 comments.

  7. @llyrghmnghyll

    February 23, 2026 at 6:27 am

    Yes, Roblox takes 75% of the robux capital, but that's really a bad way to look at this.
    1) They provide the dev tools (R&D above) – roughly 30%
    2) they host (based on the above – roughly 23% of costs)
    3) they pay the platform fees. (22.55%)

    so that's about 75.5% , the developers are getting a deal at 25% . no wonder they are losing money.

  8. @jfraklin

    February 23, 2026 at 6:27 am

    Not defending Roblox, but they made the game and environment that the developers use to make their games. This is not remotely the same as Steam.

  15. @GCJACK83

    February 23, 2026 at 6:27 am

    Roblox is a loss leader. They give you a free base game, then DLCs, cosmetics, and characters are paywalled through a slot machine lootbox system. It's the video game equivalent of the Costco hot dog. Costs $1.50, but you'll spend more than that $1.50 once inside.

  21. @DoloresHaze3

    February 23, 2026 at 6:27 am

    Earnings for Roblox (RBLX)
    Earnings in 2024 (TTM): -$1.01 Billion USD
    According to Roblox's latest financial reports the company's current earnings are $3.36 Billion USD. In 2023 the company made an earning of -$1.12 Billion USD a decrease over its 2022 earnings that were of -$0.9 Billion USD. The earnings displayed on this page is the company's Pretax Income.

  23. @_Annomander

    February 23, 2026 at 6:27 am

    One critical point of analysis you missed would be to add the YoY change in deferred revenue back in to gross revenue as a pro forma measure. Revenue recognition rules essentially scew Roblox out of registering cash at the point of sale. Robux (I am presuming, like all digital currencies) are essentially non-refundable. Revenue recognition rules technically mean they cannot recognise sales as they occur, but only after the "magic beans" are spent. The digital currency intermediation artificially suppresses what they can report as revenue. It might be worth adding a section in analysing their pro forma revenue and profitability measures more closely.

    You can't distribute Net Income. You can however distribute free cash flow. I presume Roblox uses a measure of revenue closer to gross bookings, ironically making their pro forma adjusted figures actually more representative of their true performance compared to the GAAP measures they are required to present. I don't know anything about the company or the stock, but a company booking significant net losses per year (gaining the associated tax asset as permissable in the US for the losses) and reporting high free cash flow actually seems like it would be worth further analysis.

  29. @willyman77

    February 23, 2026 at 6:27 am

    epic and roblox gives people the illusion that millions of kids are playing when really its infested with bots like reddit. the money is not in the game but in the data, thats where they make there real money

  37. @john_doe_not_found

    February 23, 2026 at 6:27 am

    If their users stick with the platform into adulthood, spending per user will increase. But Roblox doesn't have any content that would be appealing to the 18+ crowd.
    Also, Roblox needs an Elon Musk to come in and cost cut the place.

  44. @jackspdr

    February 23, 2026 at 6:27 am

    Sounds like Roblox should invest in buying politicians like FAANG Facebook and Google are free to use and Amazon had a 10 year plan to see any kind of profit. Yet all billion dollar companies

  47. @alexstone1492

    February 23, 2026 at 6:27 am

    My son spent a day in a virtual beggar game to get a dollar worth of robux. Kids are happy to sit in a game for weeks fishing for badges and virtual items. I don’t get the Roblox revenue model, but I’m glad they offer limitless free play unlike other games.

  48. @Cakebattered

    February 23, 2026 at 6:27 am

    Roblox losing billions is just incompetence. Roblox has one of the highest levels of player engagement in all of gaming, takes over double the share of in-game revenue compared with PC and console gaming platforms, and pays its game developers in in-game currency rather than US dollars.

Comments are closed.

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