Frontier Developments Share Discussion Threads

[mark4231] 13/9/2018 11:47

The game update for JWE is expected later today - I wouldn't be surprised if they have some sort of price promotion in parallel.

[isayi9999] 13/9/2018 11:21

More retail stats for Week 3,4 and 5 of sales for JWE (Source: VGChartz):

This brings us to first week of August (Week 31).

Total units sold Week 3: 32403, Week 4: 23998, Week 5: 19653

Split between PS4 and Xbox is typically around 70% / 30%
Split between sales in EU,NA, Rest of World typically around 79%, 9%, 12%

If I model sales till the end of the year using a 20% decline in weekly sales I end up with 426.000 retail sales until year end (of which 272.000 were already counted in the 1m sales RNS).

Not factoring in any sort of promotions and holiday sales.

At this point in time (week 37) we are probably at around 1.25 - 1.3 million sales if I had to estimate.

[hpcg] 12/9/2018 11:43

CDProject Red is another that will benefit from the next games platform cycle.

[endion] 12/9/2018 05:13

As Mark said, Braben has previously said that he envisages his games to have at least 10 years of support and life. This may vary depending on the game, you could argue that Elite has greater scope for expansion and revamping than JWE, so over time could actually bring in greater revenue.

In terms of other devs, there arent any other UK ones. And even foreign devs are mostly all established, and have been for a number of years. The main exception is CDProjekt Red of the Witcher Franchise fame. They currently only have 3 games under their belt and go through significant "dip years" as Frontier currently aslo do. The Witcher 3 though, due to the genre and also quality of the game, brought them multi-millions worth of revenue.

For a medium term comparison I think Paradox Interactive is a good shout. They release one or two of their own games a year, along with expansions for older games, but they also produce and develop third party games. All of this is what Fdev have planned to do in the future. They also bring out games that are somewhat similar in genre, simulation and strategy.

[mark4231] 11/9/2018 18:37

dsct, a couple of comments.

I think I'm right in saying that FDEV have only talked about progressing to one franchise per annum so far. They need to achieve this first although hopefully it will be the case now with the next franchise expected in FY20. I hope they do move to two per annum of course and also gain other revenue streams, e.g. the talked about published other developers games. The more 'older' games they have bringing in background revenue the better as well as this year's newest franchises - it was great that the company was still in profit in FY18 despite having no new games.

The decreasing revenue you mention sounds OK for a title released and then nothing done with. However, Elite: Dangerous has been refreshed once (Horizons) and I would expect to happen again in FY20 (if not before!) so the lifetime would be greater than 5 years, hopefully at least 10 years - hxxps://wccftech.com/braben-elite-dangerous-going-10-years/ .

[dsct] 11/9/2018 17:44

As it's a bit less manic on here compared to last week, I'd like to ask for any input into a couple of things I'm looking into.

1) I'm putting together a spreadsheet to see how FDEV compare to other similar listed companies, and have so far found the closest as being (CDM) Codemasters, (SUMO) Sumo Group, (TM17) Team17, and possibly (KWS) Keywords Studios.

Any others I should consider ? Preferably UK listed, but will consider non-UK if the company is close to FDEV in size and/or age. I was surprised at the number of UK non-listed game development companies, which bodes well for FDEV if they're looking to outsource any work, or make any acquisitions.

2) Another simple spreadsheet, is to look how things will expand over the years, with one yearly franchise progressing to 2 per annum (and more?) - Any clues on when this may occur?

Although Elite is still selling well, my forecast is working along the lines of a 5-year shelf-life, with decreasing revenue (y1=100%, y2=80%, y3=48%, y4=19%, y5=4% - using 100,80,60,40 and 20% of previous year turnover). Any suggestions/criticism of this agressive drop-off rate ?

Thanks in advance :o)
I'll obviously share any useful info/figures here.

[mark4231] 11/9/2018 16:53

No idea.

35% up from Wednesday afternoon so probably not surprising that short termers may have taken some profits.

[endion] 11/9/2018 16:44

That’s a bizarre, long set of reversed trades. Anyone able to explain what it is?

[scooper72] 11/9/2018 14:26

Bought a few more for my SIPP when it dropped back down a bit today. It was a bit choppy before lunch. Up on the day then down on the day, etc

[endion] 11/9/2018 14:12

Been there myself before. I always think twice now before commenting on progress. Superstitious lot we are!

I’d imagine there must be a delayed sell to be reported from around 1.30pm. No real reason for the drop otherwise.

[nimbo1] 11/9/2018 11:34

quality never stays in the doldrums for too long. edit. shouldn't have said anything

[endion] 11/9/2018 08:26

Now that JWE is out there, I would hope that FDEV will attract investors based on their long term plan, rather than people buying into a popular franchise for a quick buck. Whist JWE will certainly help spring board the company over the next year or so, the real success story is the company itself, and where it is headed. And that all seems to be looking pretty good!

[mark4231] 10/9/2018 15:47

There's a JWE update this week which will probably boost sales for a bit and then I would speculate that they'll do another update as well as a price promotion in the run up to Christmas. I think JWE will sell really well through December.

[endion] 10/9/2018 15:25

I imagine if they release a Q1 report that it would include JWE sales to date. That’s speculation on my part though, same for H1 results. I’d expect that when it goes on sale at Christmas, it will push the sales through the next major boundary.

[mark4231] 10/9/2018 14:06

Last Wednesday seems a long time ago - would be nice to break £12 soonish as it tried to break £11.80 a couple of times in the run up to the results.

No update on JWE sales, although I wouldn't expect to as, although we can see it is selling it's not likely to cross a major boundary (e.g. 1.5 million) in the near future.

[rar100] 10/9/2018 13:42

Is there any update on sales of JWE?

[endion] 10/9/2018 13:17

Its seen strong support after the wave of initial selling by those who either were legitimately selling, or who didn’t understand the results or the company. The broker reactions have held up well so far, most seem impressed that Planet Coaster and Elite Dangerous are able to bring in a profit above operating costs and JWE development.

What it shows, is that these games have a healthy and long shelf life. If Fdev are able to ramp up production to one game a year, there will be no more dip years, each game will add a revenue stream, and they are already making profit on only two games. That’s a great launch pad for the next few years.

[sogoesit] 10/9/2018 12:58

With the share price the way it is one day these shares will be worth more than I paid for them; sooner than I expected but later than I would have wished ;-) !

[martywidget] 10/9/2018 10:08

Broker Forecast - Citigroup issues a broker note on Frontier Developments Plc
10 September 2018 | 09:30am
Citigroup today reaffirms its buy investment rating on Frontier Developments Plc and cut its price target to 1500p (from 1540p).

[rar100] 08/9/2018 11:02

FRONTIER DEVELOPMENTS SALES SET FOR A JURASSIC-SIZED JUMP

Shares magazine News

Why there could be a monster year ahead for Frontier Developments

05 September 2018, 10:23

Frontier reports annual sales of £34.2m (2017: £37.4m), modestly down as there were no major launches in the financial year, yet holding up well nevertheless and coming in bang in line with Liberum Capital’s forecasts. Encouragingly, adjusted EBITDA of £9.4m (2017: £12.7m) is actually 9% north of the broker’s estimates.
Albeit early in the new financial year and the life-cycle of Jurassic World Evolution, Frontier’s management is comfortable with the current range of analyst revenue projections of £75m to £88m for the year to May 2019, which would represent nothing short of a monster year-on-year increase in sales.
Why are they so confident? Well, the launch of Jurassic World Evolution in June 2018 has led to a record trading performance during the period since year-end.
Digital sales have been substantial across the PC, PlayStation 4 and Xbox One consoles and physical disc sales on PlayStation 4 and Xbox One have also been significant.

And in July, Frontier announced that the new game’s cumulative sales on all formats had passed 1m units, just 5 weeks after the digital launch on 12 June.

FOURTH FRANCHISE EXCITES

Frontier is now aiming to accelerate its games output to achieve one major launch ‘every 12 months or so’.
Founder and CEO David Braben says: ‘Franchise four, which is based on our own un-announced IP, is now in full development and targeted for release in full year 2020, and two more new franchises are in earlier stages of development.’
The company is yet to disclose any details on the franchise, including the type of IP, genre or platforms, says Liberum analyst Andrew Bryant.
‘Given the lack of details, we forecast revenues of £20m from franchise IV in full year 2020, in line with Frontier’s first two franchise releases. However, depending on community reception, build-up to launch and marketing impact, this figure could change considerably,’ he teases.
Investment bank Jefferies has a favourable view of the business on the basis of Frontier’s ‘progress toward a broader base of AAA games, now launching yearly, generating a more diverse and sustainable profit profile over coming years, backed by a strong balance sheet (before Jurassic World Evolution’s proceeds are banked).’
FinnCap analyst Lorne Daniel forecasts a leap in adjusted pre-tax profit from £3.9m to £16.5m for the year to May 2019 from forecast sales of £75.3m. ‘Early in the new full year and Jurassic World Evolution life-cycle, we remain at the conservative end of the revenue range for full year 2019 but leave room for upgrade at the half year results,’ says Daniel.

[discodave4] 07/9/2018 19:45

endionThanks for contacting the Company and posting it up, appreciated.Do hope that the BOD have learnt a lesson, news needs to be clear and concise and definitely not have any potential to mislead its audience!.

[dsct] 07/9/2018 17:26

@endion - No, I still have the trading tranche, and working out what to do with it.

I don't anticipate (possibly!) needing any readily available funds until 26th Sept (BOO interims) but have also earmarked MTRO as a possible sell-all due to their ongoing declining share price (a bit like FDEV's until this week !).

I am still going with the manual stop-loss theory. 1050p close today, so am thinking along the lines of a 1000p stop, which I'll be more happy with when the share price gets above 1100p (as daily swings could easily breach that 1000p). Then raise to be -100p every time a new 25 (or 50p) barrier is hit. i.e. at 1125p, raise S/L to 1025p. I don't use auto-stop-losses due to being wary of opening prices, and also gives me thinking time.

Due to my mistaken purchase of this trading-tranche at 850p yesterday (I wished I made daily mistakes like that ! lol), FDEV appears to have moved from my 5th largest to 4th= largest holding now at 9% of 'folio. At 1467p it will be my largest single holding, so here's hoping ;^)

[endion] 07/9/2018 12:58

Nimbo, i had to recommmend that post. Topgun 2 the game would be so left field I think most of the market would just say, Ok what the hell, we'll go with it!

@dsct have you sold that trading tranche that you bought yesterday? Or are you still waiting to guage the short term movement?

[manics] 07/9/2018 12:56

In sector-similarity it reminds me of KWS price action following their SEP17 results.

[mark4231] 07/9/2018 12:51

Also, nice to see quite a few new names contributing on this BB recently.