Roblox lost $302 million in the third quarter of the year even as the company's daily active users increased 24% year-on-year to 58.8 million. Roblox Corporation published its latest earnings on Wednesday, reporting a $517.7 million turnover in the three-month period ending September 30, two points more than its Q3 2021 revenue.

Roblox has been going strong for over 16 years now, though the virtual sandbox really started hitting its stride in terms of revenue once its iOS and Android ports debuted in 2012 and 2014, respectively. Last year, Roblox Corporation made over half a billion dollars while also reporting an impressive gross profit margin—the difference between revenue and production costs—of 75%, a figure that even surpassed some of Wall Street's darlings such as Apple and Google.

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Roblox Corporation recently changed its reporting method by redefining its paying users as players who made a purchase within Roblox in the last 28 months, whereas the old definition had a cutoff at 25 months. As a result, its latest revenue report is over $100 million lighter compared to the historic reporting process as that difference is now being deferred. Regardless, the company expects to continue posting net losses in the coming quarters on account of its long-term investments being based on non-GAAP targets, internal metrics not defined by accounting standards.

Further illustrating the newly disclosed financial slump is the fact that at this time last year, Roblox Corporation overtook Activision Blizzard by market cap, becoming the most valuable gaming company in the United States by a fairly large margin, with a capitalization of $62 billion. But while Activision Blizzard added another $10 billion to its valuation in the following 12 months, Roblox Corporation lost two-thirds of its own. As of Thursday afternoon EST, the company traded at just over $33 per share, which amounts to a market cap of $20 billion.

Accounting tricks aside, these interim net losses are not the only issue that is currently troubling the San Mateo, California-based gaming giant. According to one recent study, frequent server outages and phishing problems unexpectedly made Roblox the world's most searched online game.

The sheer size of its loyal player base remains a force to be reckoned with, but the fact that Roblox is part game, part creation portal also amplifies its challenges with moderating community-made content. In one recent episode exemplifying that exact issue, Kim Kardashian threatened to sue Roblox Corporation after her 6-year-old son showed her some inappropriate content he stumbled upon while playing the game.

Roblox is available now on Android, iOS, PC, and Xbox One.

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Source: Roblox Corporation