Roblox (RBLX) Stock Jumps as Walmart Enters the Metaverse – InvestorPlace
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The pop higher doesn’t quite overcome underlying challenges
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Shares of video gaming, hosting and developmental platform Roblox (NYSE:RBLX) moved up significantly before paring back some gains. The company recently announced that big-box retailer Walmart (NYSE:WMT) will enter its metaverse ecosystem with two user experiences. RBLX stock was up a little over 1% in the Monday afternoon session while WMT gained just under 1%.
Per Investopedia, the metaverse represents a digital reality, combining various elements including social media, online gaming and augmented and virtual reality platforms. In addition, cryptocurrencies garnered attention as transactional instruments within the metaverse.
Specifically as it pertains to RBLX stock, Walmart will launch two new immersive experiences under the Roblox metaverse. According to the retailer’s press release, Walmart Land and Walmart’s Universe of Play will “offer unique interactive content and entertainment for customers, bringing to life the best of Walmart’s ‘isles’ in a virtual world.”
“We’re showing up in a big way – creating community, content, entertainment and games through the launch of Walmart Land and Walmart’s Universe of Play,” said William White, Walmart’s chief marketing officer.
“Roblox is one of the fastest growing and largest platforms in the metaverse, and we know our customers are spending loads of time there. So, we’re focusing on creating new and innovative experiences that excite them, something we’re already doing in the communities where they live, and now, the virtual worlds where they play,” added White.
Fundamentally, the announcement augurs well for RBLX stock. In addition to Walmart, fashion giants Gucci and Tommy Hilfiger invested in the Roblox platform. Therefore, the metaverse company seems to be firing on all cylinders.
Moreover, Grand View Research notes that in 2021, the global market size for the metaverse reached $38.85 billion. However, analysts there estimate that by 2030, the metaverse may command revenue of $678.8 billion. This translates to a compound annual growth rate (CAGR) of 39.4% between 2022 and 2030.
While encouraging for RBLX stock, investors must also consider the other side of the coin. Broadly speaking, some criticisms exist about the sustaining relevance of the metaverse. According to consumer insights reporting tool GWI, the metaverse imposes an environmental footprint. Essentially, the ecosystems’ underlying technologies contribute to high greenhouse gas emissions.
Specific to Roblox, the company didn’t exactly thrill investors for its second quarter of 2022 earnings report. Per PCgamesn.com, the financial disclosure “showed that the company failed to meet bookings expectations and saw an overall decline in user growth.”
With RBLX stock down approximately 64% for the year so far, Roblox must prove it’s not a passing fad. Otherwise, the Walmart announcement could end up being a blip in an otherwise downward trajectory.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
Article printed from InvestorPlace Media, https://investorplace.com/2022/09/roblox-rblx-stock-jumps-as-walmart-enters-the-metaverse/.
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