5 Epic Video Game Stocks to Buy Now

4. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Shareholders: 38

Roblox Corporation (NYSE:RBLX) is the publisher of its eponymous hit mobile game Roblox, as well as toolsets and cloud solutions that support the game’s millions of content creators. Roblox remains one of the most popular mobile games in the United States, ranking 3^rd in downloads among free games on Google Play over the past month, and 4^th on iOS.

Roblox hit a record high of 59.9 million daily active users in August, but the company’s revenue growth is slowing considerably, down to 22% to 24% year-over-year gains in August. For comparison, revenue had nearly doubled year-over-year in August 2021. While it’s grown its daily users, those users are spending less time playing the game and less money on it due to pandemic tailwinds subsiding. Roblox is working on new monetization initiatives which it hopes will breathe life into its sales.

There’s been a 38% drop in the number of funds long Roblox Corporation (NYSE:RBLX) over the past two quarters, as fears about the company’s lagging ARPU drive away money managers. Noam Gottesman’s GLG Partners and Jeffrey Diehl’s Adams Street Partners were two of the funds that unloaded their RBLX stakes during Q2.

Tao Value discussed some of the pros and cons of Roblox Corporation (NYSE:RBLX)’s popular virtual world in its Q4 2021 investor letter:

“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in virtual world. Apple in its iOS 14.5 rolled out an impactful change for digital advertising landscape by requiring all apps to ask users to “opt in”.