Roblox AI Age Verification Rollout Sparks Engagement Friction
Roblox will fully deploy its AI age verification tool by December to validate the ages of its 150 million daily users, focusing on under-13s amid rising regulatory pressure. The 30-second facial scan aims to enhance minor safety and strengthen age checks but may introduce ‘engagement friction,’ potentially disrupting the average 2.5-hour daily play and reducing mobile sessions. In Q3, Roblox reported $1.36 billion in revenue (up 48% YoY), 70% growth in bookings and daily active users, but saw its net loss widen to $257.4 million. Management warns of short-term user pushback as new verification steps roll out, while JPMorgan keeps an Overweight rating but cuts its 2026 price target from $160 to $145. Despite higher AI infrastructure spending and possible engagement dips, Roblox plans to expand AI tools and build new data centres to support long-term growth.
Neutral
The AI age verification rollout addresses regulatory demands and improves minor safety, supporting Roblox’s long-term compliance and growth potential. However, the added 30-second scan could interrupt gameplay, risking short-term engagement dips and mobile session declines. Q3 financial results remain strong, with robust revenue and bookings growth, while management’s guidance and JPMorgan’s maintained Overweight rating signal confidence. Balancing these factors suggests a neutral market impact, as immediate headwinds are offset by solid fundamentals and strategic AI investments.