Frontier Developments Share Discussion Threads

[endion] 19/7/2018 11:54

Thanks for your thoughts mark, always good to have another opinion.

Regarding brabens comment on the film media helping sales, i took it to mean that even though sales would have been helped by the films marketing, it was the quality of the game that was the real reason for the success.

[cfro] 19/7/2018 11:49

With the kids all about to break up for the summer hols in the Western world they should start to hit the cinemas for Jurassic World - Fallen Kingdom. I would then naturally expect JWE game sales to increase thereafter. So i think another big push in sales over the next few weeks.

[makw61] 19/7/2018 11:45

It does seem like there is a committed seller in the market, who takes advantage of increased liquidity from good announcements to offload shares. My best guess is that it would be one of the early backers of FDEV who understandably just want to take some money off the table and can afford to be not too price sensitive. At some point the selling pressure will ease.

For every seller there must be a buyer, so be interesting to see if anyone has built a disclosable stake in due course. I don't necessarily think there is evidence of market manipulation; the large buys are simply deferred announcements i think rather than after hours trades. The cancelled orders may just be HFT's who leave orders out there for info purposes and then cancel before they are filled?

1m sales in 5 weeks is very encouraging. Jun/Jul are not strong months for games sales i would guess which makes the performance vs PC which launched Nov better than it might appear. 3m+ sales looks like a conservative estimate to me with possibly two paid DLC's for flying and aquatic dinosaurs on top. Not sure what to make of Braben's comment about the film impact - possibly natural caution on his part? There will be a digital/DVD release for the film, prob in the run up to Christmas which will be a nice boost also.

[endion] 19/7/2018 10:54

In the article posted above the author speculated that the fourth franchise would be revealed early next year.

There is no official word from Frontier on the release date for the fourth franchise.

[staverly] 19/7/2018 10:37

Liam ... "Problem with the next franchise announcement is that its now not expected until early next year, according the note above", please can you develop your source.

[endion] 19/7/2018 10:31

Team17's 10p rise is on the back of a trading update with no numbers at all. Thats how share price should react, especially when hard numbers are released.

[endion] 19/7/2018 10:24

Staverly, my initial estimate was also based on the speed of sales of planet coaster, as the broker forecasts were. However I was using more accurate and up to date sales information than they apparently were.

Planet coaster sold 400,000 units in the same time frame and had sold 1m by august 2017, nine months after its november release (remember it had early access too). JWE has over doubled the speed of those sales so far. If this rate continues then without christmas or easter sales, or renewed interest from dlc etc then we are looking at 2.5m sales in 9 months.

Including spikes in sales from christmas/easter sales, especially on steam, where some reviews have cautioned gamers from buying at full prices, a potential official launch in China through Tencent, greater sales around dlc releases, then within 12 months this should push up to 3.5-4m units with a 50-50 ratio pc to console unit sales.

[endion] 19/7/2018 10:11

I have been following level 2 and the daily trades quite closely the past few weeks and have been convinced for a while that the stock is being manipulated.

When it hit the previous resistance of 13.60 there was a seller, or sellers, who would wait until the bid was stacked and then undercut the ask price and immediately sell to all the bid orders, wiping them out and forcing the share price down.

Since then, the last week, we have seen large sells in the morning and late afternoon, followed by a large buying of shares after hours. In my opinion someone, or possible multiple someones, are selling down throughout the day in order to supress any rises, buying back out of hours when there are less trades, then selling back down the following day.

Bennbridges short is 0.65%, increased from 0.5% on july 11th. However you do not need to disclose a short position below 0.5%, so there could potentially be more up to 0.49% that are undisclosed.

They will continue to attempt to subdue the buy pressure until this positive news has passed, and then begin the push down again. What we have to hope is that with all the positive news that is going to be published over the coming days in regards to JWE sales and the opening of the new HQ will be enough to force the share price up regardless.

I have never seen such constast push down in reaction to only positive news. This is now heavily undervalued and is a fantastic buying opportunity.

[allstar4eva] 19/7/2018 10:09

Hopefully on the back of today's update funds and pi's will be doing their calcs and see that 2m sales for the year are likely to be surpassed by a significant margin leading to them buying in the coming days and weeks

[liam1om] 19/7/2018 10:02

Problem with the next franchise announcement is that its now not expected until early next year, according the note above.

[hpcg] 19/7/2018 09:57

From what I can see of my relatively infrequent looks at the book, but for example this morning, it isn't really selling pressure so much as a lack of bids. So I think the price meanders, until it doesn't. Announcement of the next franchise might change that of course.

I'm very happy with my projection of 4 million JWE units in the year. Actually I think we could well do that in 2018. I would see the next million to end October, and 2 million November / December.

[rivaldo] 19/7/2018 09:47

Finncap retain their 1750p target and current forecasts, but state "there is clearly upgrade potential later in the year".

They summarise JWE's performance as "outstanding":

"Disc success pushes JWE sales through 1m units

The company has given a further very positive update on Jurassic World
Evolution (JWE), which launched in early June. Not only have digital sales of
Frontier’s third major game franchise been strong across all three platforms (PC,
PlayStation and Xbox) but initial physical disc sales for the consoles have also
been encouraging since they started in early July. With strong sales
performances on both digital and physical formats, the cumulative sales have
now passed 1 million units just 5 weeks after the digital launch on 12 June. This
is an outstanding performance for the game and solidly underpins our
expectations for the year. Meanwhile, both Elite: Dangerous (with the release of
Beyond Chapter 2) and Planet Coaster (releasing of The Vintage Pack) continue
to perform well and in line with expectations. Further expansions are planned for
all three, in line with the company’s strategy of ongoing development and
support of the franchises."

[czeck] 19/7/2018 09:16

Team 17 had a positive trading update yesterday which sent the share price north and this is consolidated today. Frontier on the other hand has had nothing but a continuous slide since June 15th. I was a fairly long holder then left at around £14 and was looking to re-enter but this morning news still seem to be negative for the stock. Foul play and manipulation puts me off.

[liam1om] 19/7/2018 09:16

Seller is still about. Anyone know who it could be? The good thing about announcements like today is it helps clear them out.

[alphabeta4] 19/7/2018 09:14

Agreed - it's worth remembering those 1.75m & 2m targets are based on a share price of £17.50-£18 too so at current levels this is on quite a discount.

By my calculations..

Liberum revenue forecast £79.6m, eps 42.4p so £16.35m.
1m sales to date. Steam is £37.50 ex vat, Console £41.67 ex vat (£50/1.2).
Roughly on 1:1 sales so £37.50 x 0.5m, £41.67 x 0.5m = £39.58m. (I've ignored deluxe sales to be cautious).
Other sales forecast at £20m so £59.58m. £20m to go.
If take crudely 1/4 off the profit for a £13.50 target is about £4m. At a contribution margin of 50% is £8m revenue can take off.
Leaves £12m to go. So around 300,000 full price.
Steam has averaging 2k a day sold so double this to take into account console is 4k.
I just can't see how this won't do that. Even if it started to struggle a decent percentage of sales would be in the bag and you could just sell it half price to make up the rest. This is also ignoring any expansion packs, game upgrades (personally I think you could boost sales by upping the AI, visitor interaction etc).
So overall it looks well underpinned from where I'm standing with lots of potential upside, just a case of being patient. Finals due c7/9 should be our next clue if we don't hear before.

Edit: My post overlapped with square1's. I haven't read that update yet but seems we're on similar lines.

[staverly] 19/7/2018 09:11

czeck... nul points for close reading

[hastings] 19/7/2018 09:10

The fact that JWE has surpassed the million point in just 5 weeks against the 9 months it took the other two franchises is a super result.If the sales have been made at full price, revenue already booked is circa £40m!

[square1] 19/7/2018 09:05

Frontier Developments (BUY, TP £18) - 1m units of JWE in only 5 weeks

Frontier Developments has announced that Jurassic World Evolution which launched on 12th June 2018 has cumulative sales of over 1 million units across PC, PlayStation4 and Xbox One, in just 5 weeks after the digital launch. This is clearly a great achievement and to put in context both Elite Dangerous and Planet Coaster took over 9 months to reach the same milestone. Assuming these games have been purchased at full-price would imply FDEV has already booked over £40m of revenue for JWE vs our FY19 forecast assumption of £59m. JWE remains on Steam’s Platinum best sellers list and we expect further sales, promotions and a successful PDLC plan to support FDEV in meeting/beating our forecasts. The company also comment that both Elite Dangerous (had a record revenue year in FY18 in its 4th year after release) with the release of Beyond Chapter 2 and Planet Coaster with the release of The Vintage Pack continue to perform well, in line with expectations. Further expansions are planned for all three franchises. We would expect the announcement of franchise #4 early next year, and while investors are currently focused on JWE, the medium-term upside is Management’s delivery of a 5-8 game franchise strategy which we believe has the potential to support £100m of repeating revenues and 30%+ margins. The shares are back around a sector multiple which looks a good entry point for a stand-out AAA games company with a building track record of successfully monetising own and third-party IP over the long-term.

[bamboo2] 19/7/2018 09:05

Cheers endion.

What the potential turns indicate to me is that we should anticipate a turn in the trend, ie price should now start to trend upwards.

Today should be a good time to buy or add. The historical support zone low is approx 1260

[czeck] 19/7/2018 09:02

The sentence 'There is no doubt that initial sales have benefitted from the worldwide awareness created by the film release, but it's the quality of the game that's really important' may suggest that sales long term may not be as good as expected? Read between the lines...

[sogoesit] 19/7/2018 08:57

Yep, a burgeoning market, SUMO also recently came to market.

[runthejoules] 19/7/2018 08:50

I reckon the recent drop here could be because of all the UK game developers floating. Team 17, Codemasters. Good cos I remember the games from the 80s & 1990s! As the value gap closes this will recover.

[villarich] 19/7/2018 08:43

The price action here is honkers. There's clearly some manipulation going on. Why would a rational market be forcing the price down. Crazy.I may have to break my portfolio rules and have a little top up.

[czeck] 19/7/2018 08:29

Yet still not positive enough for share price to head north??

[sogoesit] 19/7/2018 08:24

Still selling pressure here so, if you/we are convinced about profitability (the next hurdle to convince the market), it's a good time to accumulate.
AIMV