It's never easy to please a hard-core video gaming crowd. Apparently, it's also tough to satisfy investors who like video game stocks. Despite some rather impressive numbers, in my opinion, the market wasn't particularly wowed by Take-Two Interactive's (NASDAQ:TTWO) Q1 2016 figures when the company reported on Monday. The stock closed Thursday down about 2.6% from Monday's close before earnings were released.

I think that's the wrong way to read the latest developments: The company's doing much better than it's getting credit for. Here's why.

Shot down over estimates
For the quarter, adjusted net revenue swelled to $366 million, more than 140% higher than the Q1 2015 result. The adjusted bottom line swung to a profit of $34 million ($0.31 per diluted share), against a year-ago loss of $11 million ($0.14).

Not too shabby, eh? Well, perhaps some would disagree. Although revenue well exceeded the average analyst estimate of $351 million, the bottom line was a nickel away from the consensus forecast of $0.36 per share.

That's likely a (or the) key reason why the shares slipped in the days after the results hit the market. Woe betide any company that misses its estimates, particularly if it's in a hot young business like video games.

TTWO Chart

TTWO data by YCharts

But let's take our eyes off the stock price for a moment and peer at the fundamentals.

The vast improvement in revenue was no fluke or accounting bump. It ballooned mainly because the company's take from digitally delivered content more than doubled to $254 million (and has quickly become the main source of revenue). The future of this business is what's going to flow down those Internet pipes, and with its ever-expanding menu of offerings -- in-game purchases, associated merchandise, etc. -- Take-Two Interactive is right on top of this.

Even though the company didn't roll out a 100% new title during the quarter, it still managed to broaden its offerings. It released new platform versions of strong titles, namely the PC iterations of Grand Theft Auto V and pro wrestling simulator WWE 2K15. The company also released a mobile port of its wrestling games for the iOS and Android platforms, WWE 2K.

The online marketplace keeps current gamers at the checkout counter, while the new versions of existing titles rope in devotees of the relevant platforms. Take-Two Interactive is obviously good at juggling these, a particularly useful skill to have in a quarter bereft of fresh releases.

Speaking of new titles, with two developers and plenty of popular intellectual property/licenses in its portfolio, the company's got a strong pipeline going forward. Scheduled for release in 2015 are the company's latest pro basketball title, NBA 2K16, its wrestling counterpart, WWE 2K16, and alien invasion strategy sequel XCom 2.

Early next year should see the debut of Battleborn, a sci-fi, first-person shooter developed by the same studio that brought us the cool and offbeat Borderlands series. And the third installment of the epic Mafia franchise is slated to be released.

A franchise player
The video game sector, like any corner of entertainment, is notoriously fickle and dependent on hits. Like the more successful Hollywood movie studios, Take-Two Interactive has gotten better at building and maintaining franchise properties. It's also doing a good job supplying digital product to its active user base. Both will help mitigate the valleys and add to the peaks of this up-and-down business.

The company's looking forward to a good year. In the press release detailing the Q1 results, Take-Two Interactive reiterated its fiscal 2016 guidance. It still believes net revenue will amount to $1.3 billion to $1.4 billion, while earnings per share will land at $0.75 to $1.00. Both would be notable improvements over the $1.1 billion and negative EPS of $3.48, respectively, of fiscal 2015.

Past that, the company clearly has the potential to keep that top line growing, and those profit figures comfortably in the black. So Take-Two Interactive should continue to be a clear winner at its chosen game.

Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Take-Two Interactive. 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.