Frontier Developments Share Discussion Threads

[p1nkfish] 14/8/2018 20:39

I keep looking at the £10 too and cluster of support.
Question is, if it breaks it, will it run down towards £7?
How much downward pressure might there be?
A good chance it will at least bounce off it upwards.

[bamboo2] 14/8/2018 19:50

Fwiw, I have two possible Falling Wedge patterns marked on the last market price based chart. Both sets of trendlines converge today, and the apex sometimes marks a potential turn.

Price has also reached the historical support zone centred around 1k.

[p1nkfish] 14/8/2018 18:42

Thanks endion.

[endion] 14/8/2018 17:31

@P1nkfish, if you look at the chart I posted on post 3113 you will see the volume below the share price graph. What you will see is that the majority of shares sold after the rise were sold around the beginning of July, and not at the beginning of the fall in June.

In regards to the release of fourth franchise question, Frontier do like a good lead up for marketing etc. I would imagine that if they announced it in Jan then it could be anywhere up to a September release.

On the current share price trend, we could be forming a W shape currently, which is actually a bullish signal though it may not feel like it right now! Starting from the end of july, the second dip is lower than the first. You can see a clear version of this shape before the large rise to £18 back in Feb/March.

[p1nkfish] 14/8/2018 16:37

Does anyone have a feel for the sell volume since towards the peak vs buy volume on the run up towards it?

I've parked my holdings and happy to wait. Might be useful to know what the ebb flow has been either side of the top.

[vworlds_cambridge] 14/8/2018 16:13

Thanks Mark - useful to get thoughts on this.

[mark4231] 14/8/2018 13:58

I don't see any particular reason to need much of a gap between announcement and release other than to build up marketing hype. I'm surprised that FDEV are able to keep the identity of the next franchise secret though!

[vworlds_cambridge] 14/8/2018 12:57

So, thinking about the next franchise, does anyone have any feeling about the minimum time between the announcement and release? For example, if the franchise is announced early next year, when would the earliest possible release date be? Would an announcement in January, followed by an early summer release be possible?

[endion] 14/8/2018 10:15

Indeed it is 5chipper! Plenty of upside here in the coming year. I cant wait for revenue for H1 to be announced.

[mark4231] 14/8/2018 09:24

Welcome 5chipper!

[5chipper] 14/8/2018 08:21

Looks like a good entry point

[endion] 13/8/2018 15:48

Might they be looking for a game to fill the void......?

[p1nkfish] 13/8/2018 10:41

Always likely to be a potential problem with Chinese acting on a whim. We'll probably see the same garbage out of Europe too in time if they see someone being successful from outside.

Perhaps a good reason to keep some of the old distribution lines open on DVD etc.

[kamitora] 13/8/2018 06:57

Beijing ban deals blow to Tencent’s PC video-game strategy


"Chinese regulators have ordered internet giant Tencent to halt sales of a newly released video game that has drawn more than 1m pre-orders, dealing a blow to the company’s core gaming business.

Tencent removed Monster Hunter: World from its PC-gaming platform WeGame on Monday after regulators cancelled its operating licence following a “large number of complaints” the company said, without giving details."

"Chinese video games are tightly censored and regulators ban elements that are widely accepted elsewhere, such as blood or short-skirted characters. But analysts said Monster Hunter did not contain any obviously sensitive content."

[endion] 10/8/2018 17:14

Cdprojekt red is another big success story. The witcher franchise has done phenomenally well, particularly witcher 3, and they are now re-vamping an old steampunk rpg series. I think that one still has a good upside too if you can trade on the polish market.

[nimbo1] 10/8/2018 06:14

Hi Sogoesit. Free to play is a bit of a con given how much they charge children and teenagers for in game transactions. Fortnite is a much greater threat to an activision blizzard who rely a lot on COD / Blackops than say FDEV as FDEV are focussed on creating a niche for themselves and not competing in the first person shooter space. Fornite is made by epic games, 40% owned by tencent, who also have a stake in ATVI and FDEV!

The more important question ref fdev is whether their success is repeatable on an annual basis. I believe it is and therefore this price is a great opportunity...we need to know the next game though. The most important change for game developers is the ability to connect with the consumer via platforms like steam and playstation without any other intermediaries - which has improved market penetration and margins.

A portfolio approach is a good idea of course. Playstation is hidden within Sony (a weird conglomerate but cheap) - with a nice chart. Tencent and nintendo are massively off the top and should be great long term holds (see recent lindsell comments ref nintendo, think it was may or june factsheet for his japan fund). Take two interactive continues to make lots of money from GTA with red dead redemption 2 bound to be a massive hit. Smaller swedish producers also look good, Paradox and THQ Nordic. I own all of these mentioned now. I wish I could also buy capcom but HL won't let me.

[sogoesit] 10/8/2018 05:27

Further to post 3120 (runthejoules):
The Shares article mentions the following companies each with different business models. The article highlights the evolution of the industry towards a Games as a Service (GaaS) direct distribution model with downloadable content (DLC), building eco-systems thus enabling publishers to gain a greater proportion of the revenue take.
The companies are:
FDEV
Codemasters (CDM) - publisher
Epic Games - Free to play publisher (Fortnite game)
Sumo (SUMO) - Co-developer, work-for-hire model plus royalty take
Team17 (TM17) - Development and platform to enable independent games developers to come to market
Keywords (KWS) - “picks & shovels”

What this says to me is that business models are disparate and rapidly developing in the developer space. The investment case is not therefore premised solely on perceived games success but also on the speed of revenue generation and, of course, profitability.
Combined with a burgeoning market this seems to imply a highly competitive space for attracting capital (business models that are slower to generate revenue may be shunned in favour of faster models).
The free to play game, Fortnite, apparently has gained $1bn in revenue since launch in July 2017.
Is FDEV suffering for one of these reasons?

My inference from what endion points out about Elite and Planet Coaster is that initial (relatively) “slow” revenue generation may be balanced by longer term sustainability. However, the net present value of a fast revenue generator is likely to be significantly higher. As a result capital will flow more easily to this type of business model company versus the FDEV type.
The answer to this conundrum for an investor is of course a portfolio approach. As someone on this thread has already mentioned - they part sold down FDEV to split with an investment into KWS.

[endion] 09/8/2018 17:27

Exactly, and how many market investors do you really think have a single clue about who Frontier really are or what games they produce? Or even the gaming industry at all? Id say those in the know are fairly limited, and a good amount of them are on this BB, and they are here for a reason.

[mad foetus] 09/8/2018 16:37

Thanks Mark. And fully agree, the beauty of these games is that feedback guides updates, which are charged for and drive a long term franchise. I'm no gamer, but really, don't you want reviews that are around 75/80% positive: I.e. good game but with room for improvements. And then you gradually make the improvements and expand the universe.

[endion] 09/8/2018 16:09

Its worth noting that both elite and planet coaster are still doing well, years after release, and planet coaster is still making the top ten list on steam!

The reviews have been a bit mixed, however most of the official reviews were very good. If you look back at how elite was received there was a very mixed reaction, yet this is how Frontier operates. The initial game release is only the first draft, they continue to update, revise, add content and gameplay, they listen to the players and they try their best to give them what they want. Its the reason their games have such healthy shelf lives. I expect the reviews of JWE will only get better with time, with a few expansions under its belt.

FY18 results are due in september, then H1 results probably in Feb next year. This is a share to keep in your drawer and hold on tight to. When the market realise the level of revenue JWE has brought in, and they announce the next franchise, the share price will will bring us all profits.

[mark4231] 09/8/2018 14:50

mad foetus, the next franchise announcement isn't expected until late this year/early next year - that was according to an interview held with David Braben a few weeks back (there is a post about it somewhere earlier in this thread).

I have been looking at the Steam Top Sellers list every day. JWE continues consistently to be within the top few pages of the Global Top Sellers. Despite the good sales (as shown by FDEV's 1 million sales RNS) the reviews are mixed with many comments that people will buy the game once it goes on sale (before Christmas is my guess) - so, I expect that once that happens there will a big spike in sales. What I'm particularly pleased with is that Planet Coaster looks like it is doing really well too despite being almost 2 years old now - reviews are great and it is consistently in the first few pages of Global Top Sellers as well.

[mad foetus] 09/8/2018 14:35

It would be nice if we were seeing an ABC measured move down, but technically, I think we should have remained above the £12.50 ish zone we were in from Feb-May for that to be wholly credible. But a bounce from here and the chart will start looking much better.

[bamboo2] 09/8/2018 14:28

Jurassic World: Fallen Kingdom is scheduled for digital release on September 4, 2018 and Blu-ray, DVD, Blu-ray 3D and 4K Blu-ray on September 18, 2018.

The digital release will address a large audience that doesn't go to the cinema, which will probably increase interest in the game.

[mad foetus] 09/8/2018 14:22

JW is finishing its run at cinemas now, so no reason why we won't get news on coming franchise in the next few weeks. Remember, directors were buying here in quantity at £13 last year, and since then things have gone really well. The one thing we've not heard much about is Tencent and whether we are able to leverage off them. I'm sure there is something there yet to be factored into the share price

[mark4231] 09/8/2018 14:03

Full Year Results sometime in September.