Roblox Expands Revenue Streams: Advertising and IP Deals to Boost Growth?

Roblox is expanding its revenue streams through advertising and intellectual property licensing. The company has introduced Rewarded Video ads in beta and launched its IP License Manager, partnering with brands like Lionsgate and Netflix. This diversification of revenue sources aims to reduce reliance on its primary virtual currency model and capture incremental value from users and creators. The success of these efforts will depend on scaling adoption without undermining user experience.

Roblox Corporation (RBLX) is broadening its monetization model by introducing new revenue streams through advertising and intellectual property (IP) licensing. In the second quarter of 2025, the company rolled out two significant initiatives aimed at creating new sources of income.

On the advertising front, Roblox launched Rewarded Video ads in beta, partnering with Google. This format has been integrated by nearly 100 publishers, with strong early adoption. The ads are designed to be lightweight and run smoothly on lower-end devices, making them accessible to a global user base. This addition offers developers a new monetization option, complementing existing in-game purchases and premium features [1].

Additionally, Roblox introduced its new IP License Manager, which connects platform creators with established brand owners. Partnerships with Lionsgate, Netflix, Sega, and Kodansha highlight the potential for recognizable IP to drive higher user engagement and spending. Activations with brands like FIFA and Google Play further underscore Roblox's appeal as a marketing and distribution channel [1].

These initiatives reflect Roblox's push to diversify its revenue mix and reduce reliance on its primary virtual currency model. By blending advertising and branded IP into its ecosystem, Roblox aims to capture incremental value from both users and creators. The success of these efforts will depend on scaling adoption without undermining user experience [1].

Roblox's recent performance has been notable. Its shares have gained 105.1% in the past six months compared to the industry's rise of 25.6%. This growth is significant, but Roblox is priced at a premium relative to its industry. Its forward 12-month price-to-sales ratio of 12.22 is well above the industry average [1].

Despite the company's recent controversies, including lawsuits over child safety, Roblox has continued to perform well. The company has implemented 40 new tools to protect children over the past year, including chat filters and parental controls [2]. However, these initiatives face ongoing scrutiny, with a YouTuber and real-life lawyer announcing plans to sue Roblox over alleged failures in protecting children [2].

Institutional investors have also shown interest in Roblox. The Canada Pension Plan Investment Board reduced its stake by 13.1%, selling 120,073 shares. However, other hedge funds have increased their stakes in the company. Gordian Capital Singapore Pte Ltd boosted its stake by 74.8%, and Larson Financial Group LLC increased its stake by 819.0% [3].

Roblox reported a negative earnings per share (EPS) of ($0.41) for the last quarter, missing the consensus estimate by $0.04. Despite this, revenue increased by 50.5% compared to the previous year. The company's stock has a current price of approximately $124.68, with a 52-week high of $150.59 and a low of $37.50 [3].

In conclusion, Roblox's expansion into advertising and IP licensing represents a strategic move to diversify its revenue streams and reduce reliance on its primary virtual currency model. The success of these initiatives will be crucial for the company's long-term growth and investor confidence. However, ongoing legal challenges and the company's premium valuation will continue to shape its trajectory.

References:
[1] https://finance.yahoo.com/news/roblox-expands-revenue-streams-ads-134800293.html
[2] https://gamerant.com/youtuber-law-by-mike-suing-roblox-why/
[3] https://www.marketbeat.com/instant-alerts/filing-canada-pension-plan-investment-board-sells-120073-shares-of-roblox-corporation-rblx-2025-08-31/