Frontier Developments Share Discussion Threads

[shanklin] 11/9/2017 07:45

Thank you PI. Oh dear, I thought it was probably a silly question.

[shanklin] 11/9/2017 07:37

Please could somebody please let me know what JWE stands for. Thank you.

[nimbo1] 10/9/2017 19:00

From Liberum's note Tencent recently acquired six-year old Finish games developer Supercell for over €8bn, when the company was reported to have only 180 employees generating €2.1bn of revenue, largely on the success of the Clash of Clans mobile game.

From looking around I think clash of clans has c. 100 million downloads - anyone know any different?

I think on the basis frontier will at least have a moderate blockbuster with the jurassic franchise across platforms means the £30 target you've mentioned above is sensible. Paying up to £1 bil market cap for something now, which in a few years time could be worth between £3-6 billion seems sensible. Got to be in it to win it : )

[staverly] 10/9/2017 16:49

Not to mention promotion to AIM 50 index, and imminent upgrade to trading platform away from SETSqx. In short,a perfect storm

[p1nkfish] 10/9/2017 13:36

Imagine the development tool allow modularity - they do.
Imagine it's cross platform play possible - it is.
Imagine an investor with 100's (or 1000's) of software engineers - there is one.
Imagine a massive market the same investor is close to - tick.
Imagine that investor is able to customise to that market - tick.
Imagine that same investor has 2nd to none sales channels into that market -tick.

That is a real scenario with Frontier and Tencent together, now, even before JWE.

I have no idea what will happen in the next few months but the game is nowhere near even half-time. Just ED and PC accessing China via Tencent is a major catalyst that is not yet obvious to the full market.

[nurdin] 10/9/2017 10:57

That,hpcg,is what prompted my ' mouth watering' comment.That plus the market size in China where Tencents already have a well established infrastructure and sales channels.This should provide an excellent conduit for FDEV to develop their market there.

JWE is in the future,immediate opportunities as you rightly point out, will be through ED or its variants.This could happen this year imo

[hpcg] 10/9/2017 10:27

r.e. Tencent, in my opinion, and presumably those using the phrase 'mouth watering'. The opportunity is not so much JWE as porting ED, or a derivative, to a mobile, chinese language, format. That is the lesson from Honour of Kings and other successful franchises. On a regular basis take a small amount of money from a large number of people, and do that year after year. It is equivalent to selling a season ticket to a sports team.

[allstar4eva] 10/9/2017 10:08

Whilst none of us know how the price will react in the very short term I think the discussion above shows fair value to be closer to £30 than £13.50. The price has risen sharply but it is by no means expensive or overvalued imo. Of course a pullback will happen at some point perhaps even starting tomorrow however the overall trend is very much up...

[staverly] 10/9/2017 09:34

aledger1 ... yes, but then again i suppose, well you never know really do you, but it might

[aledger1] 10/9/2017 08:26

The market is currently re-rating this stock but it's quite difficult to value as there is so much opportunity. I don't see the share price dropping too much from here but there could be some correction if it has over reacted in the short term until there is a bit more certainty on jwe etc. If you are prepared to sit tight and ride out any short term volatility then no doubt this will pay back very well as a lth. Can be traded short term but unless you've got your finger on the pulse it will be tricky. I've got my moving stop losses in place and will just sit and hold changing my stake depending the circumstances. Gla

[m4ybe] 10/9/2017 05:06

Sales tax seems to be just a Europe issue, it seems to be a fraction of that amount in USA and Asia.

[adamb1978] 09/9/2017 21:48

Small point, but just to make sure no-one is missing it: when people talk about sales prices etc at a unit level, presumably we're all looking at these excl VAT. ie if a game sells for £40, then that's £32m excl VAT, £30 delivers £24 etc

[panic investor] 09/9/2017 18:18

All I need to know is Tencent - they're happy I'm happy

[m4ybe] 09/9/2017 17:55

Margins could be much higher, depending on their need for Steam, and whether all costs apart from licence fees are already covered by remaining sales volumes of the previous franchises.

[allstar4eva] 09/9/2017 17:47

Also for that volume of sales margins could be higher?

[allstar4eva] 09/9/2017 17:32

15m sales at £30 a pop with a 25% margin would give that figure approx...

[allstar4eva] 09/9/2017 17:15

Simon - Average sales for gamified box office hits are apparently? 15.4m, median: 8.1m. so a big hit could be 20-25m sales... And yes peak sales are only for a couple of years but build on additional franchises to those already in existence and award a higher rating for a growing company and the share price is achievable imho. It is a bull case scenario though. Many companies have little forward visibility yet trade on high multiples. That is where the company track record comes into play. Clearly there are risks re: the success of future franchises however this is where track record becomes important.

[simon gordon] 09/9/2017 16:23

allstar,

£60.00 for a game that has a one to two year peak sales cycle?

£60 @ 20x = 300p = £112m PAT

£30 @ 20x = 150p = £56m PAT

£20 @ 20x = 100p = £37.6m PAT

£10 @ 20x = 50p = £18.8m PAT

How many games would they need to sell to do £112m PAT?

[panic investor] 09/9/2017 16:17

Thx - that's very interesting to say the least !

[panic investor] 09/9/2017 15:51

Nursing - you couldn't give us the major points could you ?

[adamb1978] 09/9/2017 15:41

allstar4eva

Completely agree. In a moderate success scenario for JW, I have this a PE in the mid-teens so increasing to £30 for that scenario would be completely fair.

Adam

[nimbo1] 09/9/2017 15:22

agreed on the opportunity front although at the moment I am seeing a few - technology is allowing quality 'tech platforms' to access consumers and corporates like never before with all the consequences that spin off for the winners and losers!

[allstar4eva] 09/9/2017 15:08

I'm thinking of an share price well in excess of £30 quid before the share price even begins to attribute extremely moderate success for JWE and subsequent franchises. If JWE is a real hit you could be talking of an share price more than double that mentioned above. These kind of opportunities don't come along very often imo.

JWE is potentially transformational for fdev imho.