As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the video gaming industry, including Take-Two (NASDAQ: TTWO) 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.

Luckily, video gaming stocks have performed well with share prices up 36.5% on average since the latest earnings results.

Weakest Q1: Take-Two (NASDAQ: TTWO)

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. This print exceeded analysts’ expectations by 0.9%. Despite the top-line beat, it was still a slower quarter for the company with full-year EBITDA guidance missing analysts’ expectations.

Take-Two delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 1.6% since reporting and currently trades at $228.73.

Read our full report on Take-Two here, it’s free.

Best Q1: Skillz (NYSE: SKLZ)

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 delivered 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 70.3% since reporting. It currently trades at $8.99.

Is now the time to buy Skillz? Access our full analysis of the earnings results here, it’s free.

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, exceeding analysts’ expectations by 3.3%. Still, it was a slower quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.

Interestingly, the stock is up 77.8% since the results and currently trades at $119.10.

Read our full analysis of Roblox’s results here.

Electronic Arts (NASDAQ: EA)

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 number beat analysts’ expectations by 7.6%. Overall, it was a strong quarter as it also recorded EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Electronic Arts delivered the highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $153.73.

Read our full, actionable report on Electronic Arts here, it’s free.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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