Ready Player One
Nvidia’s next boss-battle in AI dominance is China. But maybe, the real gameplay is in monetising the worlds built on its chips – from Tencent’s megagames to Roblox’s digital economy.
Beijing just banned Chinese tech firms ByteDance and Alibaba ($BABA) from using Nvidia’s ($NVDA) RTX 6000D chips. For anyone tracking the AI arms race, this screams one thing: China is closing the gap. With Huawei vowing to launch the world’s most powerful computing system, they might even be ahead of the pack.
$NVDA took a hit after the news, while Chinese chipmakers like SMIC surged, alongside U.S.-listed $BABA and Baidu ($BIDU). Of course, $NVDA bounced back quickly after pledging US$100B in OpenAI as both firms double-down on next-gen AI.
But this GPU war isn’t just about AI. It’s spilling into gaming – a multibillion-dollar battlefield powered by the same chips. Nvidia’s Q2 gaming revenue was up 49% YoY to a record US$4.3B. And the studios behind the games? They’re not stopping either.
GTA 5 has pulled in over US$9B in a decade for its maker Take-Two Interactive ($TTWO). Hype for GTA 6 (dropping May 2026) has fuelled a 67% rally in $TTWO. Sure, the stock trades at a sky-high 81x forward earnings, but it crushed EPS estimates by 90% last quarter. Levelling-up on revenue scored big with Wall Street investors.
Roblox ($RBLX) is another name heating up. It’s rallied 196% in the past year, crossing 100 million daily active users. In Q2, it pulled in US$1.08B in Q2 revenue, but also posted a US$278M net loss.
So why are investors still bullish? Because Roblox has cracked the code on monetising play – turning virtual outfits and user-built worlds into real-world cash. 'Bookings' – or in-game spending – surged 51% YoY to $1.44B.
In-game monetisation has been a game-changer for some firms. Pioneer Electronic Arts ($EA) earned 73% of its 2024 revenue from its live service model, including in-game purchases and microtransactions.
Both Roblox and EA are heavily cloud dependent. Roblox is working on fully abstracted cloud-based edge data centres for its matchmaking algorithm. EA moved its biggest revenue driver, FC Ultimate Team, to Alphabet’s ($GOOGL) cloud. And both firms are investing big in AI to scale up.
It’s a concept not lost on Chinese giant Tencent ($TCEHY). The firm has climbed the leaderboard fusing AI into everything from level design to real-time player support. It’s helped the second-largest gaming firm’s revenue by slashing development costs and boosting engagement.
Bottom line? Gaming’s no longer niche. It’s ground zero for AI, hardware and monetisation. And it’s where investors are starting to find a parallel universe of opportunity.
This is not financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking financial, legal and taxation advice before investing.
