May 7 was a good day to own shares in Electronic Arts (NASDAQ:EA) or Activision Blizzard (NASDAQ:ATVI). After reporting revenue and earnings that smashed forecasts, shares of these video game producers rose 21% and 9%, respectively. With shares of these businesses trading around their 52-week highs, is now an opportune time to make an investment or should the Foolish investor look elsewhere for gains?

Electronic Arts might be in the midst of a turnaround!
For the quarter, Electronic Arts reported revenue of $1.1 billion. Despite coming in higher than the $812.4 million analysts wanted to see, the company's top line still fell 7% lower than the $1.2 billion management reported the same quarter last year. According to the company's earnings release, this fall in sales came primarily from a 15% drop in packaged and other goods, as well as a 45% decline in subscriptions and advertisements. 

Source: Electronic Arts

This fall in sales was partially offset by improvements in the company's full game downloads, extra content, and mobile operations. During the quarter, management saw sales coming from full game downloads rise 65%, while extra content and mobile revenue increased 31% and 8%, respectively.

In addition to beating on the top line, Electronic Arts also surprised investors on the bottom line. For the quarter, the company reported earnings per share of $1.15, $0.10 above the $1.05 management reported the fourth quarter of 2013 and far higher than the $0.11 forecasted by analysts. On top of benefiting from higher-than-anticipated sales, Electronic Arts enjoyed some bottom-line improvements, driven mostly by its product cost of goods sold falling from 18% of sales to 11%.

Activision Blizzard keeps chugging along!
Even though Activision Blizzard's share price appreciation wasn't as large as what shareholders of Electronic Arts saw for the day, its results were still mighty impressive. For the quarter, the game developer saw revenue fall 16% from $1.3 billion to $1.1 billion, but it managed to handily outperform the $688.3 million analysts anticipated. Bobby Kotick, Activision Blizzard's CEO, attributed the company's strong sales to better-than-anticipated results in its titles like Diablo and World of Warcraft

Source: Activision Blizzard

Looking at profitability, the company did even better. For the quarter, management reported earnings per share of $0.40, far greater than the $0.10 analysts forecasted and in line with what the company saw a year earlier. This earnings beat was due, in part, to higher-than-anticipated sales but was also attributable to a 36% drop in the number of the company's shares outstanding.

But who makes for a better prospect?
Over the past five years, Activision has done OK but far from great. Between 2009 and 2013, the company saw sales tick up just 7% from $4.3 billion to $4.6 billion while its net income rose from $113 million to $1 billion. The increase in sales reported by management can be chalked up to growth in some of its franchises and the company's move into mobile content. Meanwhile its higher profitability is due to a combination of smaller impairment charges, reduced gross costs, and a general scaling back in its research and development expenditures. 

ATVI Revenue (Annual) Chart

ATVI Revenue (Annual) data by YCharts

In contrast, Electronic Arts has actually experienced a negative sales trend, with revenue falling 2% from $3.7 billion to $3.6 billion, but the fact that management was able to turn its net loss of $677 million into a net gain of $8 million over that time frame is impressive. Like Activision Blizzard, Electronic Arts has benefited from smaller impairments and less research and development, but the decline it saw in its cost of goods sold has been the primary driver behind improved profitability.

Foolish takeaway
Given the performance each video game developer reported during the quarter, it shouldn't surprise investors to see shares rise so high. Because of its lackluster results these past few years, Mr. Market rewarded Electronic Arts the most because its higher bottom line might be signaling a turnaround. But despite this, the fact that Activision Blizzard was able to not just improve its net income but was able to do so while growing sales (albeit slowly), might make the company more appealing to the Foolish investor.

Daniel Jones has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.