Frontier Developments Share Discussion Threads

[bamboo2] 04/1/2017 16:11

hastings, thanks, I guess that could mean Thursday 12 or 19 Jan. Then early Feb.

[hastings] 04/1/2017 14:23

Hi bamboo2, when I spoke with David Walsh a few weeks back he confirmed that there would be a brief update this month, followed by a more substantial release in February.

[bamboo2] 04/1/2017 10:53

Last year there was a trading update 14/01/2016.

Any chance it will be similar timing this year?

[culford] 04/1/2017 10:49

Glad its FDEV suing Atari - was worried it might be other way round! An extra $2m would be useful but not game changing for FDEV. Trading update, interims in early Feb, new game announced, then PS4 launch of ED in Q2 - plenty of positive news due in next 6 months.

[mark4231] 04/1/2017 10:47

That's interesting Matthew, nice that Frontier shouldn't have this sort of (alleged) issue in the future!

As for VR, I think it is awesome, I own an Oculus Rift and believe it is the future for many games so I'm pleased that Elite: Dangerous supports VR and think Planet Coaster should at least partially if not fully support it too - I expect that this will come from Frontier at some point and it's good that they now have the knowledge of the technology although probably not a huge amount of money in it for now.

[mathewawood] 04/1/2017 10:36

Interesting - hxxp://www.tmz.com/2017/01/03/atari-video-game-royalties-lawsuit/

[culford] 04/1/2017 00:53

Share price weak again today but underlying sales of PC on Steam powered on.

13,000 PC games sold yesterday per Steamspy, in the first day after the end of the Winter sale. At £30 per game that is £390k pre VAT, £348k post VAT and a gross profit/contribution of £244k. That is £89m annualised gross profit which is not realistic as daily sales won't stay at 13k.

In 47 days since launch it has sold 500k PC games (c10k per day) at an average price of c£27.50 which gives £13.8m inc VAT, £12.2m ex VAT and £8.6m gross profit. This would be an annualised gross profit of £66.8m, also probably unrealistic as daily sales won't average 10k.

However one could now see sales in its first 12 months being >£40m inc VAT (daily sales of £82k versus £294k per day in first 47 days and £390k yesterday) and gross contribution being >£25m. The positive reviews suggest that this game is the popular successor to RCT3 that sold 10m copies. Current FDEV market value of c£100m still provides fantastic upside in due course.

[bamboo2] 03/1/2017 18:12

p1nkfish, I see what you mean about the cup & handle, but I'm looking at this as a flag. The retrace has been a bit deeper than I expected, but currently showing quite low volume. There is a potential turn sometime in the next two sessions.

[p1nkfish] 03/1/2017 17:36

I'm not a TA person.
Is it on the way to forming a cup & handle?

[culford] 03/1/2017 16:31

Good idea GI. VR still a small % of market but should grow rapidly as prices fall.

Looking at Steam global top sellers today after the end of the sale, PC lies 6th. It is priced at £29.99 and all other games above it are priced at 1/2 that price or less with the exception of GTA5. Steamspy shows it has sold c1/2m copies now and it clearly has "legs" and will keep selling as reviews are >90% positive and suggest it is the new benchmark in roller coaster games.

Share price is understandably reacting to the vertigeous rise in December but would expect the ascent to begin again in due course. As outlined above, PC game alone is probably worth 450p per share and there is also ED and a lot of further games to come from this emerging Cambridge success story in the games publishing industry.

[thegaminginvestor] 03/1/2017 13:38

They should create an option to ride roller coasters in PC in VR.

[p1nkfish] 01/1/2017 23:35

As VR takes off, it's not even started yet, I see FDEV getting a major boost as ED is developed for VR from the base upwards and I would gather other FDEV games wil be too.

Good VR games will fly as must haves until VR become passe which isn't likely for the first few years. Big growth ahead.

hxxp://www.nanalyze.com/2016/12/what-is-virtual-reality-like/

hxxps://www.elitedangerous.com/en/made-for-vr/

[thegaminginvestor] 30/12/2016 23:01

Glad to hear thar AIM is at least working well for you guys.The easiest for me to trade (outside US) have actually been the Polish gaming companies and also Italien as they are on MIFID regulated exchanges. Soon Starbreeze will change its listing to a MIFID regulated market place so it will be easy to trade for anybody.

[m4ybe] 30/12/2016 12:34

I have similar issue investing in other European game companies outside UK, I don't think any of my brokers trade them (would like to know any that do) but the US listed ones are easy from our UK point of view.

[m4ybe] 30/12/2016 12:26

I think it just slows the liquidity and reduces the company's work on regulation. If there are fewer buyers there are also fewer sellers. ASOS (ASC) did very well on AIM, and had Anders Holch from Denmark buying chunks up to 27% in the years before the top, who is now buying up much of Scotland.

A lot of small software companies (TRD etc) have great trends but are a bit short term overbought at the moment, so I think this is just settling down so that we can see where we trend relative to the others longer term.

[thegaminginvestor] 30/12/2016 11:13

Re AIM.I am not sure how it is for you in the UK but for us in Sweden trying to reinvest our Starbreeze profits, it has been more difficult to trade on AIM than to trade illegal goods in Elite Dangerous.Has anyone spoken to the company about doing something about this horrible marketplace? The shares will probably always trade at a discount to peers as long as it is on AIM. For reference 3 of the largest Swedish brokers did not even allow me to trade on aim, and those who did had major problems getting the orders executed.

[culford] 30/12/2016 10:10

In posts above, makw61 and I speculated that the profitability may have moved up from break even to c£15m with launch of second game. Half yearly/yearly profits are distorted by timing of game launches so it will never be too important to focus on one period. If we look at y/e May 2017, we will 7 1/2 months of PC revenues for the first time. In the period to end 2016 it will have sold c500k PC games at an average price of say £27.5, or £13.75m gross, £12.3m net of 12% average VAT. The gross margin/contribution from this will have been at least 70%, or £8.6m. Those 500k of sales happened over 40 days during launch, autumn sale and winter sale at a daily sell through of c12,500. If we assume that in remaining 150 days of y/e May 2017, PC sells at c3000 per day at full price (launch and peak/sales season over but increased viral effect of 1/2m games out there with >90% positive reviews), then gross revenues in remainder of year will be £13.5m, post VAT £12m and gross profit/contribution will be c£8.4m.

Thus if ED has sold c£20m again in the year and covered all costs, the increase profitability should be c£17m. The if is a big IF as it looks as though underlying ED sales are running at a lower level on Steam and the end result will now depend very much on timing of PS4 launch, scheduled for Q2 2017. If this happens before end May, expect the profit of FDEV to be significantly greater than £15m. If it falls after May, the benefit will be in following year and profits could be £12-15m.

For the share price the rerating to 450p of £150m now should be a formality. If investors start to rate the company on the same basis of other listed games companies, and reflect on its high promise over future years, then it will rise significantly higher as discussed above.

[hastings] 30/12/2016 07:45

Yes looking very positive Culford.As an aside, the FDEV car park was pretty rammed in the run up to Xmas, which at the least suggests they are very busy people.

[culford] 30/12/2016 01:44

Up another 16,000 sales per Steamspy today to 467k games sold. Looks like PC should exceed 500k games sold by end of Steamspy sale on 2nd January 2017. That should make for a positive update in early January 2017 by FDEV. It was cash neutral with one game and must be generating good cash now its now firing on 2 cylinders. Look forward to FDEV announcing plan for 3rd game next month.

[bamboo2] 29/12/2016 08:54

I added this morning, on the basis of the chart pattern confirmation.

[bamboo2] 29/12/2016 08:47

culford, the end-of-day close above the all time high is a positive development on the chart. This means the resistance provided by the old high can be seen as support.

Dont rule out a re-test of the previous ath at approx 307. The price could really do with taking a breather and forming a consolidation zone. If a flag is formed I will calculate a new target based on the length of the previous flagpole.

The target for this pattern as a bowl/cup is a minimum of 371.

[m4ybe] 29/12/2016 06:31

The Steam global top sellers I have above PC are all heavily discounted, or alpha priced in the case of Astroneer. I'm tempted by a couple of those big names myself as the sale will be over in a few days. Impressive acceleration for PC, I guess the imminent end of the sale (2nd Jan I think) is drawing attention to Steam, so PC is benefiting from getting noticed.

Active players have become higher than for ED so there is high engagement too.

The tools.garry.tv/steamchart list has it in position three and above recently released Astroneer. It seems to be sorted by popularity, if so that's very impressive.

[culford] 29/12/2016 00:50

PC slipped down to bottom half of top 10 today but global owners went up by 20,000 to 450k on Steamspy. It is hard to understand versus its position in steam global top sellers list but underlying trend good and thats another £1/2m of gross revenue booked in a day!

I would think the company needs to update stock market in early January as to the level of success of its second game which is clearly impacting on the share price!!

Less turnover on the stock market today than on Steam with 100k shares or c£300k in value traded. That is improving liquidity for FDEV though and this should get better now it is above the £100m market cap. level. The share price closed above its historical high which Bamboo has said makes it v difficult to forecast now; he suggested c370p next i seem to remember. Thanks to GI we now know the comparative multiples of other listed emerging game publishing companies (8-10x revenues). If its heading that way we are very early in this share price action!