Meta's AI Game Builder Debuts as Roblox Grapples With AI Costs and Lower Bookings

Meta introduced Horizon Create and Horizon Studio, waitlist-only AI tools that let users turn text prompts into mobile games for Facebook, Instagram, and Horizon. Roblox guided third-quarter bookings to $1.58 billion-$1.65 billion, down 14%-18% year over year, while AI infrastructure and fixed-cost deleveraging pressure margins. Roblox's Q3 free cash flow guidance ranges from negative $60 million to positive $5 million, compared with $294 million in Q2, partly due to capital spending and creator payout timing.

Meta's new Horizon Create and Studio are waitlist-based systems that turn written prompts into mobile games playable through Facebook, Instagram, and Horizon. Roblox's own Build tool has stayed in a limited public test since late July.

Roblox expects third-quarter bookings of $1.58–$1.65 billion, a 14–18% drop from a year earlier, while reported revenue still rises 4–10%. Management said margin pressure came roughly equally from fixed expenses spread across weaker bookings and from AI infrastructure, mostly training models. Free cash flow may land between -$60 million and $5 million, after $294 million in Q2, reflecting $170 million in later-year capital outlays and about $40 million tied to when creators are paid.