Pixel P&L: Roblox’s Q3 Boom & Microsoft’s Record Game Pass Revenues

Good morning. It’s Friday, November 1. Today, we dive into Roblox’s surprising Q3 performance, which drove the company to boost its full-year bookings forecast, sending shares up over 17%. We also examine Microsoft’s Q1 FY2025 results, where gaming revenue surged 43%, despite a dip in Xbox hardware sales.

In our feature, we question whether MMORPGs are truly a fading genre or simply evolving with the times.

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Roblox Corp. raised its full-year bookings forecast Thursday, boosting shares over 17% as strong spending across its immersive virtual environments offset a general cooling in the gaming sector. The company, which operates on a free-to-play model, reported a notable rise in user engagement, which has fueled sustained financial momentum.

In its Q3 earnings report, Roblox posted revenue of $919 million, a 29% year-over-year increase that exceeded its guidance of $860 million to $885 million. Bookings rose 34% to $1.13 billion, driven by a 27% increase in daily active users (DAUs), which grew to 88.9 million. Engagement hours also rose, reaching 20.7 billion, a 29% gain from last year.

The company reported adjusted EBITDA of $55 million, surpassing its projected range of $22 million to $42 million. Roblox credited improvements in AI-driven search and discovery, virtual economy enhancements, and app performance boosts as primary drivers of these gains. The PlayStation launch, which now accounts for 8% of bookings, also contributed to significant growth in its console business.

CFO Michael Guthrie attributed this success to advancements in content personalization, telling Reuters, “We’re now matching users with content that’s more interesting and relevant, driven by a thriving creator community.”

Looking ahead, Roblox projects Q4 revenue between $935 million and $960 million, representing 25-28% year-over-year growth. Bookings are expected to rise 19-21% to approximately $1.34 billion. 

Microsoft posted solid Q1 FY2025 earnings, with gaming revenue surging 43% year-over-year, reflecting gains from the Activision acquisition. Total revenue for the quarter ending September 30 reached $65.6 billion, up 16%, while net income grew 11% to $24.7 billion. However, Xbox hardware revenue fell 29%, signaling challenges despite the segment's overall growth.

Revenue within Microsoft’s More Personal Computing division, which includes Xbox, reached $13.2 billion—a 17% increase from the previous year. Xbox content and services rose by 61%, largely from Activision’s catalog and strong performance in both first- and third-party titles. CFO Amy Hood noted the segment outperformed expectations, driven by robust content demand.

In the earnings call, CEO Satya Nadella highlighted Game Pass’s Q1 record revenue and average revenue per subscriber, with Call of Duty: Black Ops 6’s recent success expected to drive future growth. "One year since closing Activision Blizzard King, we’re focusing on long-term growth through high-margin content and services," Nadella said, emphasizing Microsoft’s strategy to diversify access to gaming content.

Looking to Q2, Microsoft anticipates a decline in gaming revenue in the “high single digits,” due to hardware pressures, while Xbox content and services are expected to remain “relatively flat.”

In the early 2000s, gamers were drawn to MMORPGs like Conquer Online and Ragnarok, where they could forge their own paths in vast, uncharted worlds. These games embodied the thrill of freedom and connection, offering communities built through late-night dungeon runs and open-world exploration. But in 2004, World of Warcraft redefined the genre, favoring structured gameplay over unfiltered adventure.

Today, as attention shifts to fast-paced titles like Fortnite, MMORPGs face an identity crisis. Are they relics of a bygone era, or can mobile and cross-platform adaptations keep the genre alive? Our feature story delves into the evolution of MMORPGs, exploring whether the heart of these online worlds can thrive in a modern landscape.

Sony Shutters Firewalk Studios After Concord Failure, Cuts 210 Jobs

Sony is closing Firewalk Studios, the developer behind its PlayStation game Concord, following a poor reception that led Sony to pull the game offline weeks after its August launch. In a message to staff, PlayStation Studios head Hermen Hulst announced the closure alongside mobile studio Neon Koi, affecting approximately 210 jobs.

Capcom's PC Sales Dominate FY25, Surpassing Consoles

Capcom’s FY25 first-half sales reveal a major shift toward PC, with 54% of its 20.025 million units sold attributed to the platform—outpacing the combined sales on Nintendo Switch, PlayStation, and Xbox consoles. This marks an increase from 48% PC sales last fiscal year, highlighting the platform's growing profitability. Titles like Resident Evil 4 Remake and Dragon’s Dogma 2 have driven record PC engagement, with Dragon’s Dogma 2 hitting 228,000 concurrent players on Steam. Capcom's upcoming Monster Hunter Wilds, set for February 2025, is anticipated to further cement PC’s dominance.

Grand Theft Auto fans were surprised—and amused—when a Reddit user shared a unique find from India: a box of Diwali firecrackers themed after GTA 6. The game doesn’t even have a release date yet, but with years of development and rampant anticipation, its influence has reached unexpected places.

The user stumbled upon the crackers pack in India ahead of Diwali. The post titled “GTA VI Crackers in India – Diwali Special – The Hype is real,” shows the package displaying images of characters edited to match the GTA franchise aesthetic, with 21 varieties of firecrackers listed on the back. The post quickly gained attention, with many commenters entertained by the unlicensed merchandise—proof of GTA 6’s global appeal.