Roblox’s new Google advertising partnership could give investors 1.2 billion reasons to smile
Morgan Stanley says the gaming giant’s immersive ads are a “highly effective new ad format,” now “incrementally bullish from here.”
Roblox shares jumped nearly 3% Wednesday morning as Wall Street continued to cheer its new ad parnership with Google. On Tuesday, the gaming giant unveiled its new rewarded video ads — 30-second clips that players can watch in exchange for in-game perks like extra lives or boosts. In the coming weeks, brands will be able to buy these ads directly or through Google’s platform, expanding Roblox’s ad business.
Morgan Stanley analysts think the partnership could be a turning point for Roblox’s advertising strategy, estimating it could generate a massive $1.2 billion in revenue in 2026. They noted that, unlike Roblox’s existing billboards and portal ads, rewarded videos have a proven track record of driving higher engagement, clearer impressions, and the ability to reuse content.
“Most of [Roblox’s] engagement is entirely unmonetized and ads are a key tool to turn that deficit into a strength,” analysts said in a note Wednesday. “We would also highlight that by giving consumers Robux to spend in experiences, these ads will not only drive developer earnings directly, but could also condition a greater proportion of users to make in-app purchases in general.”
Roblox has 85.3 million daily active users, mostly Gen Z. Roblox’s ambitions are even bigger: last fall, CEO and cofounder David Baszucki set a target of hitting 1 billion users and 10% of all gaming content revenue worldwide.
Morgan Stanley has an “outperform” rating on Roblox and price target of $75.
Roblox shares are up 70% over the past year.
