Frontier Developments Share Discussion Threads

[adamb1978] 25/5/2021 17:06

No problem Nimbo. You might get an opportunity at say £23-£24 I think. The share price has some volatility around it so worth keeping an eye on and getting in there would be a great chance for a solid-ish 25% p.a. for a few years, similar to BOO I think

[adamb1978] 25/5/2021 16:59

Hi Sogoesit

I agree that value should continue to build, and management have grown turnover 10x from 2014 to 2021. I'm not saying that they'll grow 10x over the next 7 years but the forecasts are for somewhere in the 40%-50% growth in the year to May-22 and backing a management team which has delivered and where the company operates in a growing market is never a daft idea!!

On the 10-15 year thing, its possible as DB is only 57 so could easily be around that long. I wouldnt be surprised though if they get a higher enough offer from one of the large US cos and sell before then though. Would be nice to see them carry on and make the FTSE100 thoug....

Adam

[nimbo1] 25/5/2021 16:56

Adam thats fair - thanks for the ratings on the comparables... will continue to keep a close watch here in case opportunity presents.

[sogoesit] 25/5/2021 16:49

Great comments...

This company is definitely a long term game in my view (10 years plus).
Their announced pipeline to date means an investor probably has to wait at least 3, if not 5, years to be able to gauge the results of the current work. So that leaves the future pipeline build as a bonus as well.

Release cycle or not, that's how the pipeline is set. We, the market, should know that (I didn't when I started, however). The only way to overcome this is to invest more in people and systems as one would in any factory. But I don't think that's the way UK management, and investors, think. The US investor culture, however, is another matter.

My prediction is is that the likelihood of it being sold is high. I give it 10/15 years or so.

[adamb1978] 25/5/2021 16:45

Hi Nimbo

I dont think Nintendo are the right comp - they do consoles etc rather than being a games developer and therefore scalability and margins are very different.

The comps are Activision Blizz, EA, Ubisoft, Team17, Take-two, Square Enix, Paradox, Embracer, which is a decent enough sized set.

When I last updated them, that group were on about 23.1x LTM EBITDA and 19.5x current year. My figures have FDEV were 22.9x and 16.1x for the year to May-22, so they're broadly in-line. On a sales basis, the comps were 9.9x LTM and 6.9x CY, vs 9.9x and 6.7x for FDEV. I havent gone through annualising the multiples and there are some wierd year ends but those figures (a couple months out of date) suggested its broadly in-line, and then you need to take a view on relative growth rates

Adam

[nimbo1] 25/5/2021 16:19

The next full title needs to deliver imo if you want FDEV to continue to carry a premium rating in the post lockdown world. (Nintendo is on about 15x earnings!) and after all the latest ED update is only a DLC but priced as a decent game.

I don't want to be seen as too negative here though - I really like the company and would definitely be a buyer again, but I will hold off until the next update. (Thanks for thoughts above on that fledgling)

[adamb1978] 25/5/2021 14:35

Interesting to see the above posts about various bugs. I bought into FDEV around 300p, though sold far too many on the way up, but trying not to let that long term position in the company influence my thinking or mean that I fall in love with the share.

That said, my gut feel is that this is a blip in the long-term growth picture of the company and that the PE multiple for the year which we're about to start, which is somewhere in the 30s, is entirely reasonable given the growth of the business and market in general. I need to update my comps for them however believe that it will show that by May-22, with the share price where it is today, they'll be trading at a discount to the sector.

I dont have a huge position now in FDEV (4% of PF) but I'm going to wait to see what the next TS says. Share price and company performances dont go linearly from bottom left to top right, and there are blips on the way, but I'd rather be invested in a management team who have delivered than take a punt on another (unless of course something fundamental has changed (eg management left, competition changed, market growth slowed etc). Assuming nothing has changed, my current, but slightly out of date, price for adding more is around 2400p and would add more if we get there. I think buying more will generate a decent return (>25% p.a.) on a 2-3 year basis.

Adam

[fledgling1nvestor] 25/5/2021 12:06

Frontier are no stranger so such criticism on major Elite Dangerous updates. The Horizons launch was mired in just as much criticism at the time.

Odyssey was clearly pushed out before it was in a fit state in order to lock in that pre-order revenue and get a couple of weeks of sales before their financial year ends on May 31st. The alternative was having to declare it as deferred revenue, potentially having to issue a profit warning.

Whilst the Steam reviews are heavily in negative territory the quantity of reviews in itself is encouraging given the Gamasutra article we've discussed previously (probably around a year back) which uses review numbers to estimate owner numbers. Here it is again for those that missed it:



Anyway the tldr; is the median for owner numbers was found to be a 77x multiplier so 3705 reviews (as I write this) should equate to approximately 285,285 units shipped on Steam. This in addition to any from Epic Store's 8m owners of the base game from the recent free game of the week campaign probably makes for a pretty successful launch for Frontier, perhaps 500K units already.

Investor uncertainty may lead to a dip but I'm calling it now, the trading update they tend to publish a week or two into June will state they are expecting to hit their analyst targets.

Give it a couple of weeks and things with the community will blow over once most of the game breaking bugs have been tackled.

[sogoesit] 25/5/2021 10:48

Thanks your input Nimbo. I was wondering why the slip in the share price after release date.

Not being a "gamer" can you tell me what rating threshold is a "success" in this business?
What have previous ratings been on Planet Coaster etc.?

Anyway, I reduced my holding from 4% to 3% today... to be sure, to be sure.

[donald pond] 25/5/2021 08:39

I've no position here atm but agree with that nimbo I'm not techie but my bigger concern is whether ED has been around for so long that the architecture won't support the ambition they have for the upgrade. I don't know if that's how it works so could be wrong but they've been working on this for years so to not get it right is worrying

[ck1111] 24/5/2021 15:53

Hi Nimbo, I have very similar feelings. FDEV are a great company and EDO is fundamentally good but has been rushed out to meet the financials. Could be a retrace in SP?

[nimbo1] 24/5/2021 13:44

Ive followed FDEV a long time... its a brilliant UK success story and a high quality company but I think its fair to say this release has been a shocker - any game which gets a 30% rating on steam is a failure in my eyes - even if there are some fixable issues which can improve things. Market has shrugged its shoulders at it - perhaps financially it doesn't matter for FDEV...but after several years of producing decent hits this raises the risks that the next high profile title could also flop. FDEV are a great company and should have a bright future but the next title needs to deliver like planet zoo did imo.

Any views from anyone objective?

[yankhanson] 23/5/2021 00:52

PC GAMER "Reviews are overwhelmingly negative for what was once Elite's most anticipated expansion."

www.pcgamer.com/players-in-uproar-over-elite-dangerous-odysseys-bugs-and-poor-performance/

[yankhans0n] 22/5/2021 14:58

...though notably the vast majority of replies to David Braben's message are very supportive of him, the game, and Frontier. There's a lot of respect there.

[yankhanson] 22/5/2021 00:07

As FDEV's Odyssey bombs, FEV CEO Braben issues an apology which pointedly does not promise to fix it. forums.frontier.co.uk/threads/odyssey-progress.576490/

[yankhanson] 22/5/2021 00:04

FDEV's Odyssey launch last week is getting its first reviews.

"Very disappointed. Frontier should not have released it in this state" from
ObsidianAnt, Elite Dangerous' #1 creator on YouTube with 250,000 subscribers.

[fledgling1nvestor] 20/5/2021 12:11

W13Ken, you should probably go and check out the Kickstarter comments section for Elite Dangerous. IMO Yank Hanson has another alias (Oldschool Shadowrunner). He had a long history of obsession with Frontier due to the cancellation of Offline mode on Elite Dangerous some 7½ years ago.



My theory is he got fed up of having no audience there anymore a few years back so migrated here.

[vrman2point9] 20/5/2021 12:04

I played the Alpha using my PC which has a i7-2600K CPU from 2012 and a RTX2070 Super graphics card from 2019. The experience of playing the unoptimised game was perfectly fine. I had no issues with performance.Compared to the cost of the tech I have bought to play ED the cost of the game is peanuts. I have spent many hours in the ED Galaxy and Odyssey makes it even more stunning.

[w13ken] 20/5/2021 11:29

Yank Hanson, you never answered my previous question: What is your history with FDEV? It seems personal with you.

[yankhanson] 20/5/2021 01:10

Frontier: Server issues should now be resolved
Customer: As you can see in the picture, we are still unable to enter the game.
Nothing has been fixed or changed. Please stop tweeting lies.

[w13ken] 20/5/2021 00:08

Odyssey is now #1 in the Steam charts:

However, there have been some server problems,. It's often the case with major releases of popular games but fingers crossed that these can be fixed in the next 12 hours.

Early reviews are mixed: some find it awesome while negative reviews are mostly focused on performance issues on their current PCs. Expect to see more split comments like this.

Those with more high-spec kit should get the most of it. Top reviewer and ED expert, Obsidian Ant, has given a positive update on the new tutorial:

The Odyssey trailer now has 100k views in 36 hours and is 98% positive:

[w13ken] 18/5/2021 14:05

FDEV share price quite likely to rise 10%+ in the coming fortnight with the full release of Elite Dangerous:Odyssey on PC and Steam tomorrow.

There could be problems yet as the servers are scheduled to be down for 11 hours - hence an approx 7pm release in the UK - but this 'Space Legs' version of the game should be huge and get lots of coverage. Xbox and PlayStation releases are scheduled for this Autumn.

There are many articles on the release today so here's a typical one and a very good launch trailer.

[sogoesit] 14/5/2021 10:01

To kick some dust on the share price we need some news...

A TU should be upcoming May/June, probably after the 19 May?

[w13ken] 05/5/2021 18:02

Fabulous review from experienced ED player, Charlie Hall, at Polygon.

"It took seven years, but Elite Dangerous: Odyssey finally made me feel small. The game has never looked better... After nearly a decade of play, I’m now able to stand my avatar up, leave the confines of my starship, and kick up the dust on new worlds. The experience has been breathtaking..."