As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the video gaming industry, including Roblox (NYSE:RBLX) and its peers.
Since videogames were invented in the 1970s, they have gradually taken more share of entertainment time. Ubiquitous mobile devices have powered a surge in “snackable” games that can be played on the go. Over time, games have developed more social engagement features where friends can play games together over the internet. The business models of games publishers have become less volatile due to digitization of distribution, in game monetization, and like Hollywood, an increasing dependence on surefire hit franchises. Covid driven lockdowns accelerated adoption and usage of videogames – a trend that has not slowed.
The 4 video gaming stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 4.9% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 8.8% on average since the latest earnings results.
Roblox (NYSE:RBLX)
Best known for its wide assortment of user-generated content, Roblox (NYSE:RBLX) is an online gaming platform and game creation system.
Roblox reported revenues of $1.04 billion, up 29.2% year on year. This print exceeded analysts’ expectations by 3.3%. Despite the top-line beat, it was still a slower quarter for the company with full-year EBITDA guidance missing analysts’ expectations.
“In Q1 2025, all of our results were above the guidance we provided on our Q4 2024 earnings call as we continue to deliver on several key growth initiatives. In addition to our focus on raw performance and quality, investments in the virtual economy and search and discovery are driving growth in platform monetization, bookings, and creator earnings. During the quarter, Roblox creators earned a record $281.6 million and over the past 12 months, more than 100 Roblox developers earned over $1 million. As a whole, the community is on pace to exceed $1 billion of earnings for the full year,” said David Baszucki, founder and CEO of Roblox.
Roblox Total Revenue
Roblox achieved the fastest revenue growth of the whole group. The company reported 97.8 million daily active users, up 25.9% year on year. The stock is up 21.6% since reporting and currently trades at $81.50.
Taking a new twist at video gaming, Skillz (NYSE:SKLZ) offers developers a platform to create and distribute mobile games where players can pay fees to compete for cash prizes.
Skillz reported revenues of $22.41 million, down 11.2% year on year, outperforming analysts’ expectations by 8%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ number of paying monthly active users estimates.
Skillz Total Revenue
Skillz pulled off the biggest analyst estimates beat among its peers. The company reported 124,000 monthly active users, up 2.5% year on year. The market seems happy with the results as the stock is up 21.7% since reporting. It currently trades at $6.43.
Best known for its Grand Theft Auto and NBA 2K franchises, Take Two (NASDAQ:TTWO) is one of the world’s largest video game publishers.
Take-Two reported revenues of $1.58 billion, up 13.1% year on year, exceeding analysts’ expectations by 0.9%. Still, it was a slower quarter as it posted full-year EBITDA guidance missing analysts’ expectations.
Take-Two delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 2.9% since the results and currently trades at $225.83.
Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ:EA) is one of the world’s largest video game publishers.
Electronic Arts reported revenues of $1.90 billion, up 6.5% year on year. This print surpassed analysts’ expectations by 7.6%. Aside from that, it was a satisfactory quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations.
Electronic Arts scored the highest full-year guidance raise among its peers. The stock is down 5.2% since reporting and currently trades at $146.50.
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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