Frontier Developments Share Discussion Threads

[nimbo1] 10/2/2018 13:26

Next news will be in my opinion only - China strategy, jwe launch in the west followed by China (film time releases always differ due to permissions), 4th franchise title and loose game details for 2019 release. Should have all this within next 6 months. I suspect all this combined will put fdev on another level of market cap and growth rate.

[mark4231] 10/2/2018 11:47

I think the current price will be seen as a bargain in six months time. There hasn't really been much new news since the Tencent investment and JWE announcement last summer so I'm not surprised the share price has dropped a bit without anything new to talk about. I'm sure that is about to change!

[allstar4eva] 10/2/2018 10:58

Couldn't resist buying more on Fri as regardless what happens in the wider markets if FDEV execute their strategy well then this still looks like a long term multibagger. All imho of course.

[panic investor] 09/2/2018 18:46

Might get it even lower at this rate - I'm currently 100% cash - even day traded xlm for a few k - when this bottoms it's going to be a dream !

[melf] 09/2/2018 18:06

I don't think you be saying that this time next year nimbo :-)

[nimbo1] 09/2/2018 17:00

I must be mad, added some more before the close. Good weekend all and hope the volatility chills out a bit next week!

[ashehzi] 09/2/2018 12:31

Wondering if 1185p a good buy point here.

[makw61] 09/2/2018 11:07

2 page preview of JWE in PC Gamer this month, so i think we can assume the hype machine is starting to crank up. Should get something similar across the XBox and PS4 titles i would think.

We should also be due a new teaser trailer soon as the initial one is over 5 months old now.

The share price here has been buffeted a bit by market gyrations, but i don't see why the US 10 year bond yielding 2.9% or 3.0% has any bearing whatsoever! Great results from Nvidia last night, so perhaps that may stabilise the NASDAQ later. When companies are growing so fast then an unreasonably high PE is actually reasonable. Or as someone put it - unreasonable growth at an unreasonable price.

GLA

[scottishfield] 08/2/2018 16:45

Wow, great recovery here, bodes well.

[nimbo1] 08/2/2018 10:45

Yes thanks for that and v good purchase! I am relaxed, 30% sounds high but I reduced my equities exposure by 60% mid jan so it used to be c.10% - I just wanted to keep exposure here at the same level long term and buy a few more. Take it easy, I'll be back when there is something interesting to say on FDEV or the price goes up!

[mark4231] 08/2/2018 10:23

I know how you feel nimbo. I invested 5% at an average of £2.50, so it's now about 25%. I haven't bought or sold any for over a year. I'm considering selling some to take advantage of my CGT allowance but otherwise plan to hold on tight. I'm very optimistic for FDEV's prospects although always know that any share can go to zero overnight.

[nimbo1] 08/2/2018 10:02

Ha I wouldn't put myself in the i know what i'm doing camp, more in the continually learning camp. 30% feels a little outside of my comfort zone but I think FDEV is compelling medium term. I think its hard as a pi to really get to know the companies as most don't/can't meet management or see a presentation etc. I always think all companies should film them and put them on the investor section of the website.

I suspect the next time we'll see some exciting materials from FDEV will be when they start marketing the game properly, which I assume won't be for another few months. Their marketing budget for this game although I don't know the specific figure is a lot higher than planet coaster, which they only spent c.1.5 mil on. Hopefully it will be money well spent.

Someone is definitely selling a few shares at the moment though, looks to me like it wants to visit 12 again.

[allstar4eva] 08/2/2018 09:49

30%? Reminds me of the saying: Diversification is for those that do not know what they are doing;-)

[nimbo1] 08/2/2018 09:43

Glad it's of interest, I'm very glad I went because I now feel comfortable holding on to my shares through any wider market and FDEV specific volatility. Im now at 30% here so could do with this working out over the next couple of years!

[mark4231] 07/2/2018 22:16

Thanks for all the info nimbo. Although I don't have a particular target price, I'm confident it's plenty above where we are now. Now need to be patient!

[p1nkfish] 07/2/2018 21:53

Thank you nimbo. Excellent background info, much appreciated.
A long while back I'm pretty sure I posted this could achieve £1Bn market cap, so was about £2.
£3.5Bn target makes my stretch look puney.
Now I think it possible.

[nimbo1] 07/2/2018 10:04

regarding price action - it seems to be being messed around with and looks weak, but then it is very illiquid - i'm relaxed that there is probably another few months to play around with the price but when JWE is released, we eventually learn more about the china op and the 4th franchise is known the price will be higher imo. only a few months to wait.

[bamboo2] 07/2/2018 09:57

Thank you for the posts mark and nimbo.

Funny how thew price has come down today, yet it is still not possible to get an online quote to buy even 200. I had the same problem yesterday afternoon, but eventually got a few more.

[nimbo1] 07/2/2018 09:32

There was a lot said about China in terms of market potential nothing ref specific plans. Tencent have 80% of the Chinese games market - until now a lot of that has been mobile games driven. The problem with mobile games is they are very easy to make because effectively they use technology pc games were using from 7 years ago. The competition are focussed mobile. As the middle classes boom so are sales of pc's which is really only a major transition in the last 12 months but over the coming years provides a very good opportunity. Its why Tencent have been coming west to find new sales avenue and games content - because its where they'll generate some of their future growth.

When you look at the competitors out there - starting at the top (not including Tencent) Activision, EA and Take two - the 3 largest also happen to still be old world - they create a game and sell it on a disk. DB sees the future as games a a service - people buy the game on a platform like steam then over time they release in game updates, at first free then for sale, have in game stores - some items free and some for sale and engage with the player communities. Its this games as a service that provides the sustainable revenue base and makes the income repeatable. They think under this model games should have a shelf life of 8-10 years.

Specifically regarding elite and dangerous revenue all they said was as per the rns - it continues to perform well. I'll be holding on for the ride.

The 30% to the platform provides better margins than via traditional disk sales, its why gross margin dipped from 74% to 69% - it should normalise in the low 70's. The numbers included the launch of Elite Dangerous through distribution partners on disk for the playstation, hence the lower margin figure.

Another important thing to note is on costs - when they have five franchises up and running it does not mean head count is 5 times larger than if they have one franchise - a development team consists of c100-120 people. when a game is made - the team downsizes and then the core moves onto the next game.

In the competition table there are 14 players - tencent at the top and Sumo digital at the bottom. There seem keen to take FD into the top half - if thats to happen the market cap would need to be between Sega Enix at $3.6 billion and Square Enix at $5.7 billion.

Whether you think he can do it is up to the individual investor!

[mark4231] 07/2/2018 09:08

Thanks nimbo!

It'll be nice to get to 1 game release a year. Will remove much of the lumpiness in revenue.

I'm trying to remain calm about China until we hear their plans. The potential could be incredible.

I think 1-1.5 million copies is a conservative but sensible estimation for JWE. I'm sure it won't be under that, and has potential to be higher. Much, much higher. So, all potential is to the upside, little downside. Game sales always to have the chance to go through the roof if it catches on with the gaming community - e.g. PUBG 30 million, Rocket League 6 million (steamspy numbers).

Note, that about a year after release then the games are often sold via 'price promotions'. Planet Coaster and Elite Dangerous have both been on sale twice in the last 2 months.

Was there any mention about continuing revenue from Elite Dangerous? They're publishing big updates for 'free'. Is the plan to just continue getting sales from new players rather than additional revenue from existing players?

30% of revenue going to the distribution platform? Invest in Steam I think! :-)

[allstar4eva] 06/2/2018 16:25

Thanks nimbo

[nimbo1] 06/2/2018 16:06

V good presentation this am. David is a very nice man and a visonary. He wants to get to 5-10 game franchises. As stated FDEV are moving towards 1 game release a year - so in 2020 there will be five live franchises. The fifth franchise already has the first few people working on it scoping possibilities and the 4th franchise won't be announced for a while and is in development. China is an extremely exciting market because PC sales are going through the roof as the middle classes purchase them. China is hard to navigate - you need permission to launch films and games there - so I assume Tencent as a partner is useful.

When they sell a game through these platform c.30% of the revenue goes to the platform.

My thoughts only - analysts are conservatively estimating 1-1.5 million copies of JWE are sold. Lets fantasise for a second this was 5 million. 5 mil x £40 = 200 million revenue - 30% = 140 million of revenue achievable over the next coupe of financial years. Imagine @ 10 million?!!!

So in 3 years time if there are 5 selling franchises and a new game release every year I think the share price will be higher is my conclusion.

[allstar4eva] 06/2/2018 10:11

Possibly last dip now until release of JWE wider markets permitting. Double your money in 6 Months?

[rivaldo] 06/2/2018 09:47

Perfectly fine and as expected. If the markets hadn't been the way they are then the price would probably have been unmoved or even up.

Finncap today retain their 1700p target, and Liberum say Buy and increase their price target to 1480p (from 1250p):

[mark4231] 06/2/2018 09:00

Copy and paste of the trading update really. Difficult to tell the market reaction to it due to the wider markets fall although shouldn't have been any reaction really as results statement exactly as expected. I expect the same for the full year results. Looking forward to the JWE launch and then it will get exciting. :-)