This Booming Stock is Just Getting Started

Nov 20, 2021

I’ll be honest. I’ve never played a video game in my life.

Okay, maybe I tried my hand at Mario Kart once or twice in the ’90s… but that is the extent of my personal gaming prowess.

But thanks to LikeFolio data, I don’t have to be a gaming pro to spot major winners in the gaming industry.

In fact, LikeFolio’s real-time consumer insights helped reveal a HUGE gaming winner: Roblox.

Just look at the chart below. The green line plots consumer Mentions of downloading and playing Roblox, one of the first visionary participants in the now viral “Metaverse.”

Mentions were recording explosive levels of demand growth… year, on year, on year.

LikeFolio featured the Metaverse player in our May MegaTrends report, when shares were trading under $65.

The data was SO strong, we doubled down a week later, reiterating that this name had room to grow.

And boy, were we right.

RBLX shares are now trading above $134… That’s +109% gains in about six months.

Do we think Roblox is tapped out? Not even close.

Here’s what we’re watching now, and why we think Roblox is still positioned to be a HUGE winner in the future…

The next frontier of gaming is mobile

Now that gaming trends have had time to neutralize, one truth remains clear:

Many of the additional gamers brought to the table in 2020 are sticking around.

While first-time gaming growth (and other gaming trends) is lower versus 2020, levels are still higher versus 2019… by double digits.

Online gaming Mentions remain +13% higher than pre-COVID levels.

And guess what segment of digital gaming, in particular, is driving growth?

Mobile gaming.

Consumer Mentions of gaming from a mobile device have increased +40% YoY, bucking other softening gaming trends.

And this preference is helping drive demand for mobile-friendly games specifically.

Consider the scatter chart below, featuring near-term momentum for major games under the Take-Two (brown), Activision Blizzard (purple), and Roblox (pink) umbrellas.

Hype is building for Activision’s Diablo brand, driven partially by interest in Diablo Immortal, a free-to-play video game developed specifically for mobile devices.

The Call of Duty franchise is also being boosted by mobile engagement, with Activision noting that Call of Duty mobile net bookings grew more than 40% YoY in Q3, driven by double-digit growth in the West and a continued contribution from the game in China.

Take-Two has at least 21 mobile games planned for development over the next five fiscal years. And its CEO noted that mobile development does contribute to a more diverse audience, with the mobile gamers trending more female and older.

But Roblox has been on to the mobile trend for some time… In September 2020, 79% of all Roblox games were played on mobile devices.

And Roblox demand is still leading the pack… by a long shot.

Keep an eye on this major developing trend moving forward.

Meanwhile, we’re continuing our Bullish outlook for Roblox as demand continues to soar. With real-time insights on deck, it’s child’s play.

Megan Brantley
Head of Research, LikeFolio