Frontier Developments Share Discussion Threads

[bamboo2] 06/1/2017 08:29

Hi culford, volume doesn't affect the target price for the chart pattern, but will be needed to get it there! Sometimes lack of selling pressure is enough to drive a price. There were, for example, some quite low volume mainly buying days in the previous run up.

[culford] 05/1/2017 23:35

Hi Bamboo,
V low volume today - does that impact on your analysis?

[bamboo2] 05/1/2017 22:53

Got the turn today. Looking now toward an ultimate tp of approx 366 in this pattern.

[culford] 05/1/2017 12:45

From the reviews on Steam, ED now being played on VR, mainly Oculus Rift and Steam VR.

Sales lept by another 11k yesterday on SteamSpy which is v strong in 2nd day after sales - presume its a lag from the sales period reporting.

[p1nkfish] 04/1/2017 21:12

CES is upon us and VR will be a central interest. Hockey stick for VR not far off and will carry along those publishers ready for it.

[m4ybe] 04/1/2017 19:46

I think there would be a meaningful loss of detail for VR, because it requires a top frame rate to be running and also two displays. Games seem to be cutting a lot of detail, so given that's a selling point in PC I expect they are in wait and see on that one and will be ready when it's profitable enough.

[makw61] 04/1/2017 19:05

I'm hoping for a trading statement next week. The company should have a good handle on its H1 numbers by now, so it's more a question of what the board wants to say on the full year outlook. That will depend I suppose on the anticipated PS4 launch date for ED.

I'm not concerned however about which particular reporting period a release falls into. I'm looking for a run-rate here of around 2m units on a rolling 12 month basis, probably consisting of 1.25m PC and 0.75m ED. That should give a very satisfactory level of profit vs market cap.

We've a reasonable handle on PC sales where I suspect most are via Steam, or even if direct from Frontier end up in people's Steam accounts so that they can use Steam Workshop, (my understanding of Steamspy is that it will pick up PC in someone's account regardless of how it got there). Happy to be corrected on that if anyone knows any different? I'm less sure of the split for Steam vs direct with ED and obviously Xbox sales are separate to that. Be good to reconcile my model with some concrete figures from the company. Clearly the model is only as good as its assumptions on volumes, and the split of sales of PC at £30 vs ED at £20 vs ED Commander pack at £40 and what proportion of sales incur a 30% Steam commission. As I said, looking forward to the trading statement and then the interims in Feb to refine the model.

Frontier seem to have a very clear road map for the company which I think demonstrates their long experience in the industry. By my reckoning this is roughly:
1. announcement of third franchise - soon!
2. PS4 launch for ED May/June
3. I'm expecting a third ED module around Q3 this year (Horizons launched June 2016)
4. Then probably some paid DLC for PC maybe November 2017
5. Announcement of fourth franchise H1 2017
6. Third franchise to launch maybe H2 2017?

etc etc

I have some concerns around the current level of ED sales but I feel it is improving all the time and could still be a massive hit once pilots can walk around ships/stations/land and once landing on all planets is available. Boarding ships would be pretty awesome....

I agree both games are also very suited to VR so be interesting to see when VR starts to really reach critical mass. I seem to recall FDEV saying that VR is probably a couple of years away for PC as the hardware needs to catch up. It takes a pretty decent rig to run it, so I guess you need to roughly double that horsepower for VR?

The share price has undergone a healthy correction since Christmas on relatively low volume and is only back to where is was around 20th December so my philosophy is just to pretend the Christmas spike never happened! My average cost here is around £1.80 so I'm very happy to hold this for 3-5 years and see what the company is worth then.

GLA

[bamboo2] 04/1/2017 17:29

Simon, Thanks for the chart. This has retraced further than I thought it would, although 50% is not uncommon on a flag pole imo. I had this level around 265 earmarked, although guess it could go back further to support around 250.

I have a turn date for late today/tomorrow, but for some reason all my advfn charts seem to be mixed up at the moment, I think it might be due to the two recent half day trading sessions or closed days over xmas. This has mucked up my timing based trades by one day, so it could be the turn won't happen until Friday. Advfn claim to be sorting the problem, but I'm not holding my breath. Cheers

[simon gordon] 04/1/2017 16:18

On the daily Ichimoku the red line looks like a potential support point as it retraces after the pre Xmas exuberance:

[bamboo2] 04/1/2017 16:11

hastings, thanks, I guess that could mean Thursday 12 or 19 Jan. Then early Feb.

[hastings] 04/1/2017 14:23

Hi bamboo2, when I spoke with David Walsh a few weeks back he confirmed that there would be a brief update this month, followed by a more substantial release in February.

[bamboo2] 04/1/2017 10:53

Last year there was a trading update 14/01/2016.

Any chance it will be similar timing this year?

[culford] 04/1/2017 10:49

Glad its FDEV suing Atari - was worried it might be other way round! An extra $2m would be useful but not game changing for FDEV. Trading update, interims in early Feb, new game announced, then PS4 launch of ED in Q2 - plenty of positive news due in next 6 months.

[mark4231] 04/1/2017 10:47

That's interesting Matthew, nice that Frontier shouldn't have this sort of (alleged) issue in the future!

As for VR, I think it is awesome, I own an Oculus Rift and believe it is the future for many games so I'm pleased that Elite: Dangerous supports VR and think Planet Coaster should at least partially if not fully support it too - I expect that this will come from Frontier at some point and it's good that they now have the knowledge of the technology although probably not a huge amount of money in it for now.

[mathewawood] 04/1/2017 10:36

Interesting - hxxp://www.tmz.com/2017/01/03/atari-video-game-royalties-lawsuit/

[culford] 04/1/2017 00:53

Share price weak again today but underlying sales of PC on Steam powered on.

13,000 PC games sold yesterday per Steamspy, in the first day after the end of the Winter sale. At £30 per game that is £390k pre VAT, £348k post VAT and a gross profit/contribution of £244k. That is £89m annualised gross profit which is not realistic as daily sales won't stay at 13k.

In 47 days since launch it has sold 500k PC games (c10k per day) at an average price of c£27.50 which gives £13.8m inc VAT, £12.2m ex VAT and £8.6m gross profit. This would be an annualised gross profit of £66.8m, also probably unrealistic as daily sales won't average 10k.

However one could now see sales in its first 12 months being >£40m inc VAT (daily sales of £82k versus £294k per day in first 47 days and £390k yesterday) and gross contribution being >£25m. The positive reviews suggest that this game is the popular successor to RCT3 that sold 10m copies. Current FDEV market value of c£100m still provides fantastic upside in due course.

[bamboo2] 03/1/2017 18:12

p1nkfish, I see what you mean about the cup & handle, but I'm looking at this as a flag. The retrace has been a bit deeper than I expected, but currently showing quite low volume. There is a potential turn sometime in the next two sessions.

[p1nkfish] 03/1/2017 17:36

I'm not a TA person.
Is it on the way to forming a cup & handle?

[culford] 03/1/2017 16:31

Good idea GI. VR still a small % of market but should grow rapidly as prices fall.

Looking at Steam global top sellers today after the end of the sale, PC lies 6th. It is priced at £29.99 and all other games above it are priced at 1/2 that price or less with the exception of GTA5. Steamspy shows it has sold c1/2m copies now and it clearly has "legs" and will keep selling as reviews are >90% positive and suggest it is the new benchmark in roller coaster games.

Share price is understandably reacting to the vertigeous rise in December but would expect the ascent to begin again in due course. As outlined above, PC game alone is probably worth 450p per share and there is also ED and a lot of further games to come from this emerging Cambridge success story in the games publishing industry.

[thegaminginvestor] 03/1/2017 13:38

They should create an option to ride roller coasters in PC in VR.

[p1nkfish] 01/1/2017 23:35

As VR takes off, it's not even started yet, I see FDEV getting a major boost as ED is developed for VR from the base upwards and I would gather other FDEV games wil be too.

Good VR games will fly as must haves until VR become passe which isn't likely for the first few years. Big growth ahead.

hxxp://www.nanalyze.com/2016/12/what-is-virtual-reality-like/

hxxps://www.elitedangerous.com/en/made-for-vr/

[thegaminginvestor] 30/12/2016 23:01

Glad to hear thar AIM is at least working well for you guys.The easiest for me to trade (outside US) have actually been the Polish gaming companies and also Italien as they are on MIFID regulated exchanges. Soon Starbreeze will change its listing to a MIFID regulated market place so it will be easy to trade for anybody.

[m4ybe] 30/12/2016 12:34

I have similar issue investing in other European game companies outside UK, I don't think any of my brokers trade them (would like to know any that do) but the US listed ones are easy from our UK point of view.