Are football fans prepared to enter the metaverse?
Ahead of this weekend’s Super Bowl, the National Football League (NFL) has announced that it is entering the metaverse through a partnership with Roblox (NYSE:RBLX). Specifically, Roblox has created a metaverse video game called NFL Tycoon that allows users to hang out in a virtual reality world and engage in activities ranging from playing football to managing the ownership of a professional team.
The metaverse, for those that are not aware, is virtual reality world that is largely conceptual at this point. Nevertheless, RBLX stock jumped 10% on news of this partnership.
What Happened With RBLX Stock
The NFL said that “the Roblox experience will engage fans year-round in interactive NFL-themed gameplay while also providing a new virtual hangout destination.” With the new game, the NFL becomes the first major sports league to have an “experience” on Roblox, which largely focuses on developing mobile games.
Investors should note that this comes at a time when the metaverse is gaining presence. Earlier this week, we learned that Meta Platforms (NASDAQ:FB) is teaming with the rock band Foo Fighters to host a virtual reality concert immediately after Sunday’s Super Bowl. The band will perform rare songs inside a 180-degree VR concert venue. Attendees must use Meta’s Quest headset. The entire concert will be available live only on Horizon Venues, a virtual reality app available exclusively on Quest headsets.
Why It Matters
The NFL likely sees its partnership with Roblox as a way to connect with a younger demographic and get younger people interested in professional football. Over time, it could help to boost NFL viewership and ratings as current fans grow older. In 2021, the league’s regular-season games averaged 17.1 million viewers across TV and digital platforms—its highest regular-season ratings in six years.
For Roblox, the deal has sparked some excitement around the company and its stock after it has been hit hard in recent months amid a broader rout in technology securities. Year-to-date, RBLX stock is down nearly 30% at $70.00 a share. The stock is now barely above its initial public offering (IPO) price from last March of $69.70 a share.
What’s Next for Roblox
While RBLX stock enjoyed a nice 10% pop yesterday on news of its deal with the NFL, the share price is down slightly in morning trading. This suggests that excitement around the tie-up could be short-lived.
Going forward, it will take more than one metaverse football game to improve the fortunes of Roblox and its stock. While the NFL partnership is interesting and points to the future of the metaverse, investors shouldn’t get overly excited about this development.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.