The gaming industry continues to face intense competition, rising development costs and rapidly changing player preferences. Even so, companies with scalable digital ecosystems, durable intellectual property and multiple monetization levers remain better positioned to create long-term value. Roblox Corporation RBLX and Take-Two Interactive Software, Inc. TTWO offer contrasting growth profiles. Roblox likely benefits from higher user engagement, restored access in Russia and strong traction for Grow a Garden 2. Meanwhile, Take-Two recently reached a new 52-week high amid reports of robust early preorder demand for Grand Theft Auto VI.
Roblox is expanding its creator-led platform through AI tools, stronger developer incentives and communication and discovery enhancements. Take-Two, meanwhile, is targeting a sharp increase in bookings and cash flow, but softer mobile expectations, flat recurrent consumer spending and concentrated execution risk temper the outlook. With Roblox supported by a broader set of platform-driven growth levers and Take-Two facing a more demanding setup, which gaming stock offers the stronger investment case now? Let’s take a closer look.
Roblox Expands Engagement, Creator Economics and AI Capabilities
Roblox posted broad-based growth in the first quarter of 2026. Revenues increased 39% year over year to $1.4 billion, while bookings rose 43% to $1.7 billion. Operating cash flow advanced 42% to $629 million, and free cash flow increased 40% to $596 million. Daily active users reached 132 million, hours engaged totaled 31 billion and monthly unique payers increased 52% year over year to 31 million.
The company is increasing its focus on older users. Users aged 18 and above represented 26% of age-checked DAUs, while U.S. DAUs and hours for this cohort grew more than 40%. U.S. DAUs and hours among users aged 18-34 increased more than 50% year over year, while U.S. users aged 18 and above monetized more than 50% higher than users under 18. Roblox also increased the DevEx rate for eligible spending by age-checked U.S. users aged 18 and above to 37.8% from 26.6% for qualifying novel games and is onboarding roughly 100 games into the program.
Spending and engagement growth broadened beyond Roblox’s largest experiences during the quarter. Experiences outside the top 10 generated 43% growth in engagement and 41% growth in spending, accounting for 65% of the increase in total spending. Roblox is also experimenting with enhanced discovery algorithms designed to optimize for 28-day retention and beyond. Nearly half of Roblox’s top 1,000 creators use Roblox Assistant or Model Context Protocol tools. The platform also operates more than 400 AI models and processes more than 1.5 million inferences per second.
However, the rollout of age checks for chat access reduced communication activity. The company stated that lower communication engagement and a recommendation system weighted toward monetization contributed to weaker app-store ratings, likely reducing organic sign-ups. Roblox lowered its full-year bookings growth outlook to 8-12%, down from its prior 22-26% projection. The company expects DAUs to decline sequentially in the second quarter before returning to growth in the third quarter, supported by seasonality and planned communication and discovery updates.
Take-Two’s Growth Outlook Remains Uneven
Take-Two faces an uneven fiscal 2027 setup, as flat recurrent consumer spending, projected mobile weakness and rising costs temper the benefits of its expected bookings growth. Recurrent consumer spending is expected to remain flat and account for 65% of net bookings, down from 78% in fiscal 2026. Mobile recurrent consumer spending is projected to decline following Color Block Jam’s strong prior-year performance and moderating trends across several mature Zynga titles.
Near-term guidance points to a softer start to fiscal 2027. First-quarter net bookings are projected between $1.32 billion and $1.37 billion, compared with $1.42 billion in the prior-year period. Recurrent consumer spending is expected to decline approximately 3%, reflecting projected decreases across mobile and the Grand Theft Auto series, partially offset by high-single-digit growth for NBA 2K.
Certain portfolio trends have also moderated. NBA 2K’s fourth-quarter fiscal 2026 recurrent consumer spending growth was softer than anticipated after a high concentration of spending from its most engaged players earlier in the year left less incremental upside. Take-Two also noted that hit rates for new mobile games remain low and that its fiscal 2027 guidance does not assume a major new mobile hit.
The cost profile remains another concern. Take-Two expects fiscal 2027 operating expenses of $4.18-$4.2 billion, with management-basis expenses rising approximately 8% due to higher marketing investments, new mobile releases and increased research and development spending. Selling and marketing are expected to account for about half of the projected $300 million year-over-year increase in management-basis operating expenses. The company also acknowledged that margins may fluctuate and that rising game-development costs affect the gross margins of many titles.
How Does the Zacks Consensus Estimate Compare for RBLX & TTWO?
The Zacks Consensus Estimate for Roblox’s current-year sales suggests a year-over-year increase of 10.2%, while its loss per share is expected to narrow 6.5%. In the past 60 days, the loss estimate has narrowed from $1.45 to $1.44 per share.
RBLX Earnings Estimate Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Take-Two’s current-year sales suggests a year-over-year increase of 26.6%, while earnings per share are expected to rise 65.1%. Over the past 60 days, the earnings estimate has declined 15.4% to $6.77 per share.
TTWO Earnings Estimate Trend
Image Source: Zacks Investment Research
Valuation and Price Performance: RBLX vs. TTWO
RBLX stock has declined 36.2% year to date, underperforming the gaming industry’s 16.3% loss and the S&P 500’s 9.7% gain. Meanwhile, TTWO shares have fallen 7.5% over the same period.
YTD Price Performance – RBLX, TTWO, Industry & S&P 500
Image Source: Zacks Investment Research
Roblox is trading at a forward 12-month price-to-sales ratio of 4.20X, above the industry average of 2.27X. Take-Two trades at a higher forward P/S multiple of 5.01X.
Image Source: Zacks Investment Research
The Final Take
Roblox currently offers the stronger risk-reward profile. Its expanding user base, rising payer activity, growing traction among older audiences and broader adoption of AI-enabled creator tools support a scalable, platform-driven growth model. Higher developer incentives, improving content diversity and multiple engagement and monetization initiatives further strengthen its long-term positioning.
Take-Two’s powerful franchise portfolio and GTA VI-led pipeline could drive substantial bookings and earnings growth. However, flat recurrent consumer spending, weaker mobile expectations, downward earnings-estimate revisions and rising marketing and development costs create a more execution-dependent setup. Roblox still faces near-term safety-related friction and trades above the industry average, but its broader growth levers and lower valuation relative to Take-Two provide the stronger investment case at present. Roblox currently carries a Zacks Rank #3 (Hold), while Take-Two has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Take-Two Interactive Software, Inc. (TTWO): Free Stock Analysis Report
Roblox Corporation (RBLX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).