Roblox's Unique Game Model is Paying Off
The gaming sector boomed in 2020, valued at $117.8 billion, +23% YoY growth
LikeFolio closely tracked key names in the industry, picking up on massive consumer tailwinds last Spring
Not only were gamers gaming more, but new gamers were coming to the table.
First-time gaming mentions are still +77% higher vs. 2019.
But overall gaming mentions are normalizing as the world reopens: -10% vs. 2019.
The key question: can the influx of new gamers outweigh the drop in gaming frequency?
LikeFolio data suggests these trends are impacting companies differently.
Roblox is a clear long-term winner of gaming trends: RBLX Demand is +155% higher vs. 2019.
We featured Roblox on our May "Early Reopening Outliers" report because of its unique de-centralized model, explosive growth, and relative outperformance vs. peers.
And boy were we right. Shares closed +21% higher the trading day following its first report as a publicly-traded company.
We doubled down on our bullish outlook a week later, and shares traded as much as +33% higher.
Aside from Roblox, ATVI is outperforming TTWO, bolstered by success with its Call of Duty franchise.
ATVI also has the highest levels of consumer happiness in the space, at 66% positive.
However, all names in this space are experiencing some Summer-induced weakness as entertainment options open up.
Keep an eye on these gaming players in the next month to see if any major shifts in demand play out ahead of earnings.