Roblox shares fall on Google-Unity game platform launch

Roblox Corp shares dropped 4.6% in pre-market trading Wednesday after Google and Unity Software Inc announced a new artificial intelligence-powered game creation platform called Playground.

The new platform allows users aged 18 and older to create and customize playable games using natural language prompts without coding. The feature directly competes with Roblox's user-generated game creation model, which has been central to the company's business strategy.

The stock decline follows a September 28 downgrade from Jefferies, which lowered Roblox to Underperform with a $38 price target. The firm said the stock's earlier gains had reflected bookings growth expectations that were too high.

On Tuesday, San Diego County filed a child-safety lawsuit against Roblox. The legal action adds to regulatory concerns that analysts have identified as potential risks to the company's international expansion and valuation.

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