MW Roblox had a child-safety problem. Now it has a revenue problem.

By Lukas I. Alpert

The gaming platform lowered its annual revenue projections, saying new age-verification programs have caused engagement to drop

Roblox CEO David Baszucki said that age verification is the "right thing to do for the long-term health of the platform."

With great responsibility comes great cost.

That was the message Roblox $(RBLX)$ tried to send investors in lowering its annual projections, saying newly instituted age-verification protocols aimed at protecting child safety have caused user engagement to drop.

The gaming platform said that the move would be worthwhile over the long haul.

"We believe the strategic upside of everything we're doing is significant and the right thing to do for the long-term health of the platform," Roblox CEO David Baszucki said on a call with analysts late Thursday. "Age checking is our vision of the future, and we believe this tech will continue to scale across the industry."

Wall Street took a short-term view on Friday, sending Roblox shares down 18% to their lowest point in 18 months.

The company began putting enhanced age-verification protocols in place in January, after being hit last year with government lawsuits and further parental complaints that accused Roblox of allowing its platform to become a haven for child predators.

Several countries, including Qatar, Turkey, China and Oman, moved last year to block the service entirely over similar concerns.

The controversy spooked shareholders, sending the stock into an extended swoon, with the share price falling 68% since its peak in late September.

The gaming platform said the work of putting the new security features in place has reduced daily engagement and the growth of in-app purchases, so it's dropping its annual revenue projection to between $5.87 billion and $6.14 billion, from an earlier outlook of between $6.02 billion and $6.29 billion.

Roblox also lowered its estimate for bookings - a measure of revenue plus deferred revenue derived from the sale of virtual currency used on the site - to $7.33 billion to $7.6 billion, from an earlier range of $8.28 billion to $8.55 billion.

Roblox said that, as of the end of the first quarter, it had verified the age of 51% of its 132 million daily active users and expected the rollout of its safety features to continue through the next two quarters.

Until users' ages are verified, Roblox said it is limiting their ability to communicate with each other through the platform, which has hampered engagement. Under the new rules, verified adults will no longer be allowed to message with children.

"The most important issue today is reduced 'energy' on the platform: Even verified users are seeing less activity, less creator momentum and less social buzz because age-check friction disrupted communication density," analyst Andrew Marok of Raymond James wrote in a note to clients.

"But management said retention among the 51% of age-verified users is fine, believes communications density is bottoming, and argued that if communications recover toward precheck levels, [daily active user] growth can return to more historical patterns," Marok added. "That makes the current weakness look more like a transition cost than a permanent impairment, though international verification friction remains a real overhang."

-Lukas I. Alpert

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May 01, 2026 13:24 ET (17:24 GMT)

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