Roblox is Worth 60% More Than EA Based on Market Value
When it comes to two of the biggest gaming companies in the world – Roblox and Electronic Arts (EA) – Roblox clearly has the edge in terms of current market valuation. As of February 2023, Roblox‘s market capitalization sits at approximately $18.9 billion while EA‘s market cap is around $31.4 billion. This means Roblox is worth about 60% more than EA based on where the public markets value these video game giants today.
But why is Wall Street so bullish on Roblox, valuing it much higher than the maker of legendary franchises like FIFA, Madden NFL, Battlefield and The Sims? Let‘s take a deeper look at the metrics, business models and growth trajectories of both companies.
Roblox by the Numbers
Roblox operates a massively popular user-generated content and gaming platform. Here are some key stats that showcase Roblox‘s huge user base and engagement:
- 58.8 million daily active users as of Q3 2022
- 2.7 billion hours engaged on the platform in Q3 2022
- 200 million estimated monthly active users
- 40 billion lifetime hours engaged since launch
Roblox has seen explosive growth over the past 5 years:
| Year | Daily Active Users |
|---|---|
| 2017 | 17.1 million |
| 2018 | 17.6 million |
| 2019 | 19.1 million |
| 2020 | 36.2 million |
| 2021 | 47.3 million |
| 2022 | 58.8 million |
Statistics Source: Backlinko
The pandemic accelerated Roblox‘s growth, but engagement has remained strong even as the world opens back up. The platform clearly has tremendous staying power.
Importantly, Roblox offers users a metaverse experience where they can create and play in millions of user-generated virtual worlds spanning gaming, social, education and more. This provides incredible engagement compared to traditional publisher-developed games.
EA‘s Key Stats
EA develops and publishes its own blockbuster games like FIFA, Madden, Battlefield and The Sims. Here are some stats on Electronic Arts:
- $5.6 billion revenue in FY2021
- More than 550 million registered players for EA games
- FIFA games franchise has sold over 325 million units
- Apex Legends has over 100 million registered players
- The Sims 4 has nearly 30 million monthly active users
While EA has many hit franchises under its belt and a loyal player base, Roblox‘s platform model simply allows for stronger user retention and engagement numbers. Gamers may buy an EA title, play for a few weeks, then stop until the next release.
Revenue Streams and Business Models
Another key factor is how Roblox and EA actually make money.
EA relies primarily on game downloads and in-game purchases. In FY2021:
- Full game downloads accounted for $1.62 billion revenue
- Live services/in-game purchases accounted for $3.73 billion
Roblox however has diverse revenue streams:
- Robux (virtual currency) – $1.1 billion in 2021
- Premium subscriptions – $674 million
- Developer/creator marketplace – Over $500 million paid to devs
This means Roblox isn‘t dependent on any one game‘s success. Instead, the platform facilitates constant spending across millions of experiences.
Growth Outlook and Market Sentiment
Looking ahead, analysts see Roblox growing at 20-30% annually, maintaining its tremendous momentum. EA is projected for steady single-digit growth.
Here are 2022-2024 revenue estimates:
| Company | 2022 Revenue Est. | 2023 Revenue Est. | 2024 Revenue Est. |
|---|---|---|---|
| Roblox | $2.2 billion | $2.8 billion | $3.4 billion |
| EA | $5.9 billion | $6.2 billion | $6.7 billion |
Estimates Source: MarketWatch
It‘s clear Wall Street sees Roblox as the faster growing company with much higher upside in the coming years.
Final Thoughts
While EA remains a gaming juggernaut, Roblox‘s soaring engagement metrics, diverse revenue streams, and projected rapid growth combine to give it a definitively higher market valuation. Investors are banking on Roblox‘s metaverse model ushering in the future of interactive entertainment.
Of course, only time will tell how these gaming leaders progress. But for now, Roblox appears to have the edge as the more highly valued and forward-looking gaming business. Both companies have proven the ability to captivate audiences worldwide with amazing virtual experiences.