Frontier Developments Share Discussion Threads

[nimbo1] 02/5/2018 10:25

Thanks for that Makw61

[makw61] 02/5/2018 10:25

Hi Nimbo, cash spend will increase as more devs are hired, but there will a timing difference as to when those costs are expensed in the income statement. Also there is some interpretation as to what costs can/should be capitalised and which are just general overheads - some firms are more aggressive than others at capitalising costs, but i don't sense that Frontier are so some of the new hires may hit P&L.

As they get to more franchises it will all tend to even out such that costs capitalised and the amortisation charge may be roughly equal and there is little difference between cash costs and P&L costs.

[makw61] 02/5/2018 10:13

My understanding is that neither revenue nor costs for JWE will be recognised until the game launches. Pre-orders will sit in deferred income within creditors and development costs will be capitalised in intangible assets. Following game release these balances will be released / amortised, which is the matching principle that Melf identifies.

H2 revenue will therefore just be ED and PC, but does include the important Christmas trading period, the Easter sale and the various DLC's.

As we all agree, H2 is pretty irrelevant. Be interesting to hear in due course what pre-orders look like, although i do think consumers are a bit reluctant to buy these days until release. GLA

[nimbo1] 02/5/2018 10:11

good point, one Im not sure on. This suggests at least some costs are going through now.

1H18: an investment period, supported by a solid top-line performance. Set against a comp. that benefitted from a major launch event (Planet Coaster (PC), Nov-16), we think that 5% growth is a credible performance and highlights the resilience of Frontier's multi-franchise model. Group GM reduced by c.500bps to 69% – a function of a higher proportion of sales through distribution partners (e.g. Steam, Sony, Microsoft) and the launch of physical disc sales. Adj. cash opex grew by 11% to £7.2m (higher R&D and S&M) as activities ramped up ahead of Jurassic World’s launch. Amortisation also grew by £0.9m to £2.8m, reflecting a full six-month period of PC amortisation. Considering both factors (GM and opex), Frontier’s adj. EBIT margin fell to 16%, as expected. Cash conversion of 97% led to operating C/F of £5.8m and this funded continued development of new and existing franchises (totalling £5.0m). There was also a large one-off PPE expense (£3.0m) relating to Frontier’s office move. Following Tencent’s strategic investment, net cash remains strong at £29.1m.

[melf] 02/5/2018 10:05

nimbo, re the JWE costs.......I thought that under the accounting matching concept, costs should be matched with the revenue that derives from those costs. So it will be interesting to see if the JWE costs are deferred to next year.

[nimbo1] 02/5/2018 09:33

Regarding the trading update this is the opening paragraph from the fincap broker note after the prelims this year. Expectations are therefore for £12 mil of revenue from H2.

Its all academic really because this year / next year it doesn't matter in the medium term but I assume the pre sales for JWE to the year end will have to be included in this years results however its always been guided no JWE sales will fall into this period. Any comment? Its also worth mentioning all the costs from creating JWE will fall into this years results.

'Interims are in line with January’s trading update, with sales of £19m, of which £18.5m was ‘Self-publishing’ – up 7% y-o-y. Performance was driven by the continued success of both games, particularly Elite Dangerous, which launched on PlayStation 4 in June 2017. Sales also responded well in price promotion events – offered at Thanksgiving and Christmas (the latter being post period-end). Sales have since settled to a lower but healthy run- rate and to reflect this, we lift our full-year estimate by 4% to £31.0m. We continue to anticipate that Jurassic World Evolution will be the catalyst of Frontier's next step-up in financial performance. This game remains on track to launch this summer, but post period-end. Despite lifting FY18E sales, gross and adj. EBIT remain unchanged following a 3% change to our gross margin assumption following the introduction of physical disk sales.'

[mad foetus] 02/5/2018 08:37

Bought back at £13. Increased that holding by 25%, happy days

[mad foetus] 02/5/2018 06:34

I sold out half of my FDEV last Friday for a spectacularly well timed top up in IDP, but I feel underweight here so expect to buy back shortly. Speculation is that there is a new Indiana Jones film due in 2019 and that could be the next franchise. No solid basis for that though.

[hpcg] 02/5/2018 00:11

Let us not forget JWE hits the streets for real ever sooner. Getting in when it does is possibly too late, unless it is a major blockbuster in which case that is not in the price.

[mark4231] 01/5/2018 23:09

I think anyone who understands the company realises that there is currently a lull between releases and the impact that has on sales for now - so no particular reason for a trading update unless things are going worse or better than expected or there is new news to tell.

Watching the position of Planet Coaster and Elite: Dangerous in the Steam Top Sellers it seems to me that they're both continuing to sell OK - although its a gut feeling as it isn't clear how that is worked out or the numbers that can be gleaned from it.

[felix1] 01/5/2018 21:01

In the last two years FDEV have released a trading update in late April. I wonder whether one is likely soon. I don't expect it to be particularly positive in financial terms for the current year, but it may bring news of JWE pre-sales, marketing activity or the next franchise. Otherwise could be a top-up opportunity. Thoughts?

[nimbo1] 01/5/2018 10:59

the game is pre selling v well in germany on PS4 and Xbox for physical copy in July. Has been in the top 10 a few times in the bestsellers list. I think its down to the detailed PC Gamer article there. Hopefully they have some PR up their sleeve for China and the USA!

hxxps://www.amazon.de/Jurassic-World-Evolution-PlayStation-4/dp/B07BYMXJBM/ref=sr_1_1?ie=UTF8&qid=1524557216&sr=8-1&keywords=jurassic%2Bworld%2Bevolution%2Bps4&dpID=51OdrBvIffL&preST=_SY300_QL70_&dpSrc=srch&th=1

[mark4231] 01/5/2018 10:23

Yes, should be an interesting and I expect exciting, in a good way, few weeks.

[nimbo1] 01/5/2018 09:43

GL...Plenty of resistance at £13 and above...will be churned through eventually! I am looking forward to the next few weeks, as we learn more details about JWE and what Frontier's next project is.

[bamboo2] 30/4/2018 11:19

Started buying again. ;-)

[nimbo1] 25/4/2018 17:56

more confirmed actors in the game

hxxp://uk.ign.com/articles/2018/04/25/more-jurassic-world-actors-join-the-cast-of-jurassic-world-evolution

[nimbo1] 25/4/2018 17:55

nice spot ck1111 - this is the relevant text

Frontier is looking for a Principal Animation Systems Programmer to take a leading role in the development of an upcoming AAA title. You will work with programmers, animators and technical artists to take our in-house animation technology to a new level, and help us to stay at the forefront of visual quality in games. This is a very high profile franchise, which enjoys a global fanbase, and you can expect to be involved from the ground up in making a title that everyone will be talking about when the time comes. You will need to bring both player and non-player characters to life in a large and varied environment, and to do this you will have the exciting remit to explore a range of technologies, including current and next generation systems for procedural and physically driven animation, and leverage those that are most appropriate.

[ck1111] 25/4/2018 17:22

Lots of jobs advertised, with maybe a hint about the next 'very high profile franchise'?https://www.reddit.com/r/EliteDangerous/comments/8etlb1/psa_frontier_is_hiring_a_lot_of_people_including/

[allstar4eva] 25/4/2018 14:06

Some decent volume yesterday too...

[hpcg] 25/4/2018 11:15

Chart, whilst still noisy, is showing a clear up trend again.

[allstar4eva] 25/4/2018 11:12

impressive footage

[nimbo1] 23/4/2018 15:09

All FDEV need to do is make a decent game, it looks like they are well on track to achieving that. This gamer on you tube now has over 1 million hits for his gameplay video and its going up at c 20,000 a day. The original playstation trailer from last Aug has views of over 2.8 mil. The Jurassic Park Lego game sold over 4 million copies, clearly lego is also a big brand name but it shows people like dinosaurs!

[mark4231] 23/4/2018 13:19

I would expect them to at least do something marketing wise.

Interestingly the previews of the film don't seem to have been as well received as the previews of the game so I'm glad that the game is not completely tied into the upcoming film, more a game tied to the whole of the Jurassic franchise. Google Trends shows the volume of searches for Jurassic World Evolution and Jurassic World: Fallen Kingdom not to be too dissimilar - games are a big business these days!

[nimbo1] 23/4/2018 12:06

I wonder what frontier have planned (if anything) marketing wise for the 25th anniversary of Jurassic Park.

From universal - hxxps://www.universalstudioshollywood.com/things-to-do/events-and-seasonal-activities/jurassic-park-25th-anniversary-celebration/

Universal Studios Hollywood™ Events And Activities Jurassic Park 25th Anniversary Celebration.
Relive the movie that started it all at the Jurassic Park 25th Anniversary Celebration on May 11 and 12.

From Frontier's annual report 2017. Cant imagine they would mention it many months in advance if they weren't planning a major marketing piece alongside. Might be wrong of course.

'Jurassic World Evolution will be Frontier’s first self-published title (although not our first game) to debut on PC, PlayStation and Xbox simultaneously, and the first to benefit from such major marketing events in 2018 as the celebration of 25 years of Jurassic Park and the launch of the next film in the franchise, Jurassic World: Fallen Kingdom.'

[shanklin] 20/4/2018 06:52

Tickets now for sales for the film, and a lively film trailer...