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SE vs. TTWO: Which Gaming Stock Offers Better Growth Opportunity?
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Key Takeaways
SE's Garena rebounded in Q3 2025, but growth remains heavily tied to Free Fire and higher IP costs.
TTWO posted record fiscal Q2 2026 bookings, driven by strong recurrent spending across console and mobile.
Take-Two Interactive's pipeline, led by GTA VI and NBA 2K26 momentum, supports long-term visibility.
Sea Limited (SE - Free Report) and Take-Two Interactive (TTWO - Free Report) are key players in the global gaming industry, though they differ in scale and focus. Sea Limited’s gaming arm, Garena, is best known for the mobile hit Free Fire, which drives engagement across emerging markets. Take-Two, meanwhile, owns premium franchises like Grand Theft Auto, NBA 2K and dominates console, PC, and mobile platforms.
Industry report forecasts the mobile gaming market to reach $256.2 billion by 2030, witnessing a 10.2% CAGR, emphasizing the long-term growth runway supporting both stocks. Both companies are well-positioned to capitalize on this trend through scalable monetization models that combine in-game recurring spending with new title launches to accelerate top-line growth.
Let us delve deeper to determine which is a better investment now.
The Case for Sea Limited Stock
Sea Limited’s digital entertainment arm, Garena, continues to face structural headwinds despite a near-term rebound. While the third quarter of 2025 marked Garena’s strongest performance since 2021, the business remains heavily dependent on a single franchise, Free Fire, leaving the business exposed to any slowdown in player engagement or monetization trends.
The company’s IP-led live events, such as Squid Game and Naruto Shippuden Chapter 2, boosted bookings but also increased royalty and platform fees, pushing digital entertainment's cost of revenue up nearly 44% year over year, which raises concerns about margin stability. The company’s higher payment channel fees and royalties tied to third-party intellectual property collaborations are pressuring long-term growth.
The recent operating performance has been strong. In the third quarter of 2025, Garena’s bookings surged 51% year over year to $840.7 million, adjusted EBITDA climbed 48%, and paying users rose 31%, lifting the paying ratio to 9.8%.
However, Garena’s ability to consistently launch new global hits remains uncertain and long-term visibility beyond Free Fire appears limited. Importantly, SE has not executed any material gaming acquisitions, increasing dependence on internal development and third-party IP partnerships for growth.
The Zacks Consensus Estimate for SE’s first-quarter 2026 earnings is pegged at $1.24 per share, down by 8.1% over the past 30 days. Similarly, the consensus mark for full-year 2026 earnings has been revised down to $5.64 per share, indicating a 3.3% decline over the past 30 days.
Image Source: Zacks Investment Research
The Case for Take-Two Interactive Stock
Take-Two Interactive enters fiscal 2026 from a position of strength, supported by one of the deepest franchise portfolios in global gaming. In the second quarter of fiscal 2026, TTWO delivered record net bookings of $1.96 billion, up 33% year over year, significantly exceeding guidance and prompting management to raise the full-year net bookings outlook to $6.4-$6.5 billion. Growth was broad-based across console and mobile, with recurrent consumer spending rising 20% and accounting for roughly 73% of bookings, highlighting the durability of Take-Two’s live-services model.
Key strengths include industry-leading IP such as Grand Theft Auto, NBA 2K, Red Dead Redemption, Borderlands, and Zynga’s mobile portfolio. NBA 2K26 posted a record launch with over 5 million units sold, a strong premium edition mix, and 45% growth in recurrent spending, while mobile titles like Toon Blast and Match Factory! delivered double-digit growth. The future pipeline is remarkably strong, featuring Grand Theft Auto VI (Nov 2026), Judas, CSR 3, Project ETHOS, Top Goal, and the next BioShock, positioning the company for a step-change in scale beyond fiscal 26.
Nonetheless, downside risks persist. The delay of GTA VI into fiscal 2027 will further weigh on subsequent revenue trends, while high development costs, marketing spend, and stock-based compensation continue to pressure profitability.
The Zacks Consensus Estimate for TTWO’s fiscal third and fourth quarters 2026 earnings remain unchanged at 83 cents and 41 cents, respectively, over the past 30 days. TTWO has delivered consistently strong quarterly performance. Its bottom line beat the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 53.41%.
Image Source: Zacks Investment Research
Price Performance of SE and TTWO
Over the past six months, Sea Limited shares have declined 20.7%, compared with Take-Two Interactive’s return of 4.2%, underscoring a clear divergence in market performance. Sea Limited’s stock performance has been tempered by fundamental pressures within its digital entertainment segment. A highly competitive gaming landscape has intensified content and marketing spending, while rising royalty and platform fees have driven a higher cost of revenue. In addition, macroeconomic headwinds, including currency volatility and softer economic conditions across key emerging markets, have further pressured results. In contrast, Take-Two's cost structure is more stable, and development cycles are longer.
Stock Performance: SE vs. TTWO
Image Source: Zacks Investment Research
SE vs. TTWO: Key Performance Comparison
The technical indicator is also bearish for Sea Limited as its shares trade below the 50-day moving average, which indicates limited upside in the near-term momentum for the stock.
SE Trades Below 50-Day SMA
Image Source: Zacks Investment Research
Comparatively, Take-Two Interactive’s shares are trading above the 50-day moving average, indicating a bullish trend in the near term.
TTWO Trades Above 50-Day SMA
Image Source: Zacks Investment Research
Conclusion
Sea Limited’s mobile-driven rebound offers modest upside, but its gaming growth remains concentrated around Free Fire, with rising costs and execution risk limiting durability. Take-Two Interactive, by contrast, benefits from a diversified portfolio of premium franchises, strong recurrent consumer spending, consistent earnings outperformance, and a deep multi-year pipeline led by GTA VI. Greater earnings visibility, scale advantages, and stronger fundamentals position Take-Two Interactive as the superior long-term growth stock.
Compared with Take-Two Interactive’s Zacks Rank #3 (Hold), Sea Limited’s Zacks Rank #5 (Strong Sell) suggests lower analyst confidence in near-term performance. Investors can observe Take-Two for an attractive entry point in the near term and stay away from Sea Limited stock.
Image: Bigstock
SE vs. TTWO: Which Gaming Stock Offers Better Growth Opportunity?
Key Takeaways
Sea Limited (SE - Free Report) and Take-Two Interactive (TTWO - Free Report) are key players in the global gaming industry, though they differ in scale and focus. Sea Limited’s gaming arm, Garena, is best known for the mobile hit Free Fire, which drives engagement across emerging markets. Take-Two, meanwhile, owns premium franchises like Grand Theft Auto, NBA 2K and dominates console, PC, and mobile platforms.
Industry report forecasts the mobile gaming market to reach $256.2 billion by 2030, witnessing a 10.2% CAGR, emphasizing the long-term growth runway supporting both stocks. Both companies are well-positioned to capitalize on this trend through scalable monetization models that combine in-game recurring spending with new title launches to accelerate top-line growth.
Let us delve deeper to determine which is a better investment now.
The Case for Sea Limited Stock
Sea Limited’s digital entertainment arm, Garena, continues to face structural headwinds despite a near-term rebound. While the third quarter of 2025 marked Garena’s strongest performance since 2021, the business remains heavily dependent on a single franchise, Free Fire, leaving the business exposed to any slowdown in player engagement or monetization trends.
The company’s IP-led live events, such as Squid Game and Naruto Shippuden Chapter 2, boosted bookings but also increased royalty and platform fees, pushing digital entertainment's cost of revenue up nearly 44% year over year, which raises concerns about margin stability. The company’s higher payment channel fees and royalties tied to third-party intellectual property collaborations are pressuring long-term growth.
The recent operating performance has been strong. In the third quarter of 2025, Garena’s bookings surged 51% year over year to $840.7 million, adjusted EBITDA climbed 48%, and paying users rose 31%, lifting the paying ratio to 9.8%.
However, Garena’s ability to consistently launch new global hits remains uncertain and long-term visibility beyond Free Fire appears limited. Importantly, SE has not executed any material gaming acquisitions, increasing dependence on internal development and third-party IP partnerships for growth.
The Zacks Consensus Estimate for SE’s first-quarter 2026 earnings is pegged at $1.24 per share, down by 8.1% over the past 30 days. Similarly, the consensus mark for full-year 2026 earnings has been revised down to $5.64 per share, indicating a 3.3% decline over the past 30 days.
Image Source: Zacks Investment Research
The Case for Take-Two Interactive Stock
Take-Two Interactive enters fiscal 2026 from a position of strength, supported by one of the deepest franchise portfolios in global gaming. In the second quarter of fiscal 2026, TTWO delivered record net bookings of $1.96 billion, up 33% year over year, significantly exceeding guidance and prompting management to raise the full-year net bookings outlook to $6.4-$6.5 billion. Growth was broad-based across console and mobile, with recurrent consumer spending rising 20% and accounting for roughly 73% of bookings, highlighting the durability of Take-Two’s live-services model.
Key strengths include industry-leading IP such as Grand Theft Auto, NBA 2K, Red Dead Redemption, Borderlands, and Zynga’s mobile portfolio. NBA 2K26 posted a record launch with over 5 million units sold, a strong premium edition mix, and 45% growth in recurrent spending, while mobile titles like Toon Blast and Match Factory! delivered double-digit growth. The future pipeline is remarkably strong, featuring Grand Theft Auto VI (Nov 2026), Judas, CSR 3, Project ETHOS, Top Goal, and the next BioShock, positioning the company for a step-change in scale beyond fiscal 26.
Nonetheless, downside risks persist. The delay of GTA VI into fiscal 2027 will further weigh on subsequent revenue trends, while high development costs, marketing spend, and stock-based compensation continue to pressure profitability.
The Zacks Consensus Estimate for TTWO’s fiscal third and fourth quarters 2026 earnings remain unchanged at 83 cents and 41 cents, respectively, over the past 30 days. TTWO has delivered consistently strong quarterly performance. Its bottom line beat the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 53.41%.
Image Source: Zacks Investment Research
Price Performance of SE and TTWO
Over the past six months, Sea Limited shares have declined 20.7%, compared with Take-Two Interactive’s return of 4.2%, underscoring a clear divergence in market performance. Sea Limited’s stock performance has been tempered by fundamental pressures within its digital entertainment segment. A highly competitive gaming landscape has intensified content and marketing spending, while rising royalty and platform fees have driven a higher cost of revenue. In addition, macroeconomic headwinds, including currency volatility and softer economic conditions across key emerging markets, have further pressured results. In contrast, Take-Two's cost structure is more stable, and development cycles are longer.
Stock Performance: SE vs. TTWO
Image Source: Zacks Investment Research
SE vs. TTWO: Key Performance Comparison
The technical indicator is also bearish for Sea Limited as its shares trade below the 50-day moving average, which indicates limited upside in the near-term momentum for the stock.
SE Trades Below 50-Day SMA
Image Source: Zacks Investment Research
Comparatively, Take-Two Interactive’s shares are trading above the 50-day moving average, indicating a bullish trend in the near term.
TTWO Trades Above 50-Day SMA
Image Source: Zacks Investment Research
Conclusion
Sea Limited’s mobile-driven rebound offers modest upside, but its gaming growth remains concentrated around Free Fire, with rising costs and execution risk limiting durability. Take-Two Interactive, by contrast, benefits from a diversified portfolio of premium franchises, strong recurrent consumer spending, consistent earnings outperformance, and a deep multi-year pipeline led by GTA VI. Greater earnings visibility, scale advantages, and stronger fundamentals position Take-Two Interactive as the superior long-term growth stock.
Compared with Take-Two Interactive’s Zacks Rank #3 (Hold), Sea Limited’s Zacks Rank #5 (Strong Sell) suggests lower analyst confidence in near-term performance. Investors can observe Take-Two for an attractive entry point in the near term and stay away from Sea Limited stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.