Roblox stock drops on booking forecast cut

Shares of Roblox (RBLX) are dropping sharply as the company lowered its annual booking forecast, suggesting concerns over the strength of consumer spending. Electronic Arts (EA) also fanned the flames with a weak revenue forecast, signaling troubles for the gaming industry.

Yahoo Finance Anchors Madison Mills and Seana Smith break down the latest developments for Roblox and how it may operate moving forward.

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This post was written by Nicholas Jacobino

Video transcript

And Roblox shares are down this morning after the company lowered their annual booking forecast.That is a sign that consumers are pulling back on spending on the video game platform.And this comes after Electronic Arts also gave a weak revenue forecast is the gaming industry as a whole deals with a lower engagement.And guys, we got to just take a look at this stock.It is down over 20 percent here.I just want to pull up what the stock has been doing year to date so that we can get some of that context.It's down 30% year to date.Obviously, huge part of that is today looking like the biggest drop year to date that this stock has had.So certainly a big market reaction here, Sea and when you take a look at what's going on with the Roblox stock today, you actually was off just over 30% ahead of the market open and had been on track for the worst day that we had seen here, I believe on record.But now it had paired some of those initial losses here off just about 22%.But again, this is a read on the consumer.When you talk about falling engagement, when you talk about questions, just how to further monetize the platform, the number of people who are paying and willing to pay and willing to play video games right now.And you see a bit of a pull back there in terms of bookings.Obviously, some questions about what ultimate this means for the current quarter.Also for the second half of the year when we talk about that weakening consumer type of story.So roadblocks obviously falling under a bit of pressure there today and you're seeing a massive sell off and this is a stock that is actually in the red as well since the start of the year given today's 22% drop, bringing that year to date loss to just around 33%.Yeah, another consumer name really struggling here.