When I was a kid, I could spend hours playing Super Mario.
I still remember thinking the game was holding Mario back. Instead of hopping over every pipe and pit, I wished he could power straight through each stage, smashing whatever stood in his way. Today, I’d describe it as Mario with Wreck-It Ralph’s fists.
I wanted to build that game. I never did, because making one took coding and art skills, plus time that a kid with a controller did not have.
Plenty of players grow up with an idea like that. Roblox Corporation (RBLX) built its business on the ones who want to make their own games.
Players spent about $6.8 billion on its platform last year, measured by bookings, according to a Morgan Stanley note shared with TheStreet.
Now the hardest part of making a game may be disappearing. Morgan Stanley analysts typed a few sentences into Build, Roblox’s new AI tool. About 14 minutes later, they had a playable pirate obstacle course, the note shows.
A country-western carnival took about 17 minutes, and one more prompt moved it into outer space. Neither required technical skills, the analysts noted. That is the shortcut I was looking for as a kid.
Roblox is pitching Build as a way to put game-making into far more hands. In a press release, Chief Creator Ecosystem Officer Vlad Loktev said the new tools reach creators “no matter their level of experience.”
However, the analysts found a catch. Build is free only up to a usage cap, the note shows. After that, the app offered to sell them more in Robux, the platform’s virtual currency.
“This friction opens an opportunity for competitors,” analysts Matthew Cost and Brian Nowak wrote in the report, titled Build: 3 Thoughts on Gaming’s AI Future and Who Could Benefit. They were referring to rivals offering AI game creation at a lower cost, or for free.
Also read: Roblox made one change and wiped out $9 billion
Roblox is passing its AI costs on to creators
More than 100,000 people have used Build in three test markets, according to the Morgan Stanley note.
The telling figure is who they are: 71% had never used Roblox Studio, the company’s traditional game-building software. Build is recruiting new makers, not just speeding up existing ones.
That growth has a price. Morgan Stanley believes investors already expect Roblox to pay for training its AI models. The running cost of each prompt, known as inference, falls on creators instead.
It puts the meter on the newcomers Roblox most wants to keep. The key question, the note says, is whether cheaper inference lets Roblox improve Build without raising that price.
Morgan Stanley analysts built a playable Roblox game in about 14 minutes with Build, then hit a usage cap that charges creators in Robux, an in-game currency.Getty Images / Getty Images
Roblox stock has lost more than two-thirds of its value
That question lands on a battered stock. Roblox shares closed at a record $141.56 on Monday, Sept. 29, 2025. The $44.58 close the note uses, from Monday, Oct. 5, 2026, sits about 69% lower.
Shares remain well above their all-time closing low of $23.19 from May 2022. Still, most of the climb from that bottom is gone.
Roblox’s own safety and quality fixes did much of the damage. Earlier this year, it added age checks to curb contact between young children and older users, Reuters reported. It also retooled recommendations to favor lasting games over what it called “cash-grabby” titles.
While intended to protect users, prioritizing quality games over quick cash-grabs directly affected creators’ earnings and reduced overall player spending.
Both changes aimed at a healthier platform, but spending fell first. On Friday, July 31, 2026, the stock posted its worst day on record, Reuters confirmed. Roblox had just forecast its first quarterly bookings decline in four years.
Wall Street is split. Of 35 analysts tracked by Stock Analysis, 17 rate the stock a Buy and 18 rate it a Hold or Sell.
Morgan Stanley remains bullish, with an Overweight rating (its version of a buy) and a $55 target, according to the note. That implies about 23% upside, above the roughly $49 average target tracked by Stock Analysis.
Morgan Stanley’s own target was $170 in August 2025, the note’s rating history shows. Shares rose about 2% on Wednesday, Oct. 7, 2026, the day the note was released.
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Morgan Stanley sees discovery as the real prize
When anyone can make a game, making games stops being an edge, the analysts argued. “The winning platforms will be the ones that surface the right games to the right players,” they wrote.
Roblox starts ahead, with data showing that more than 14 million experiences were created and played, according to the note. That data can train AI to build and recommend games.
It reframes July’s sell-off. The recommendation overhaul that hurt bookings is the same discovery engine that Morgan Stanley treats as Roblox’s advantage. The press release said Build games will be ranked by that same retention-based system.
Shareholders have already paid for the discovery bet once. Build becomes a growth story only if that engine can sort a flood of AI-made games and keep players returning.
The risk is a rival with a bigger machine. The note expects other large consumer platforms and AI leaders to compete for user-made games, and says Roblox must keep its tools on pace.
Video and music platforms went through this shift years ago, when cheap creation made attention the scarce asset. Gaming is now running that experiment.
Morgan Stanley says it will watch whether Build’s first-time creators keep building, and how pricing shifts as AI costs fall.
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