Keywords Studios Share Discussion Threads

[rivaldo] 02/5/2018 08:45

That's not a bad problem to have :o))

Won't be long at this rate.

[villarich] 02/5/2018 08:18

Price seems to be struggling to pass £19.

[rivaldo] 02/5/2018 06:46

Interesting article about the huge growth of gaming in China, with a mention for KWS as follows:



"Breaking into China

Game localizer Keywords Studios’ mentioned in their 2017 annual report published on April 30, 2018 that China is a market they are interested in. Of course, Keywords also benefits from games going the opposite direction as the company wants to help Chinese publishers going overseas.

“The astounding success achieved by battle arena games led by Fortnite and Player Unknown Battleground seem set to continue and we are fortunate to be providing services for those games too,” the report reads. “The mobile games sector continues to grow faster than the other platform types, with much of this growth originating in Asia where we continue to expand and build upon our relationships with the major games publishers in China, Japan and Korea.”

Keywords’ revenues in China remain small at EUR 3.68m (USD 4.44m), and was most probably boosted by the acquisition of Red Hot CG and Mindwalk Studios, but the company is keen on expanding in the region as part of their growth strategy."

[pyglet] 01/5/2018 09:27

Mr Euro. Go your own way. I expect that SUMO will eventually be swallowed by KWS although nothing is guaranteed.

[rivaldo] 01/5/2018 08:42

The latest Edison report notes that KWS are on a PEG of only 0.8 for FY16 to 18.

Furthermore, in addition to the high organic growth, KWS have a whopping €95m to deploy for acquisitions.

And then there's the potential in AR/VR, elearning, esports....

All of which means that KWS' P/E could drop extremely quickly.

[mr euro] 01/5/2018 08:31

Incorrect on many counts, but whatever, I'm not here to educate you.

[phowdo] 01/5/2018 08:24

SUMO are an old-school developer - no disruption or anything new. They develop complete games for publishers for a fixed fee and a small royalty sweetener. The industry is rapidly changing with the powerful developers like Epic (creators of Fortnite) and FDEV publishing their own games digitally. SUMO will go the way of AGT and RGE and SEG and EID and countless others. The number of SUMO insiders who took money off the table on the IPO is telling you something.

[mr euro] 01/5/2018 08:15

Don't get me wrong, I like KWS a lot, but they are really expensive. Perhaps they break out and test £20, it's probable, but I dont see much upside v the risk at these levels. They are not going to grow into a £2.5bn company in the next 12 months. I will be back in at some stage but prefer a lower entry point.

SUMO are very interesting, much smaller, mainly looking at organic grown, solid firm who play in the same space as KWS (although they have successfully dabbled in developing their own games). Don't expect fireworks but at these valuations they have massive upside. Not to mention they will be somebodies target at some stage. I have researched them a lot and like what I see.

[scooper72] 01/5/2018 08:01

Just had a look at them. They seem to have some decent experience on their board of directors. What are your reasons for preferring/liking the look of them? Was trying to work out their P/E but Stockopedia has it at .52 which sounds a bit strange. Perhaps it is down to them having just floated a few months ago.

[mr euro] 01/5/2018 07:34

Recipe for success given all the factors, that said you are paying for it; massively expensive right now on all multiples, one slip in growth numbers and they will be whacked hard. A risk I see is integration of larger acquisitions doesn't go well or inst accepted by some customers. I prefer SUMO right now.

[bigbigdave] 30/4/2018 16:42

With riv here, held since the early days and no intention of selling unless things change with KWS. Anyway, a blue sky breakout looking on the cards fairly soon.

[scooper72] 30/4/2018 16:23

Thanks for your thoughts Rivaldo. U got in at a v good price! My KWS holding now makes up 60 percent of all my SIPP's value - but for now I'm planning to just leave it alone and not do any top slicing.

[rivaldo] 30/4/2018 16:02

Scooper72, the cross-selling opportunities for KWS in their core gaming sector are vast, quite apart from the blue sky areas open to them - AR/VR, esports, elearning etc. I'm sure management are far too canny to venture into making their own games - they should know the pitfalls better than anyone, and their track record is exemplary.

I bought most of my stock around 140p-150p from memory, and I intend to hold for some time to come unless the story changes.

[snew] 30/4/2018 15:56

After writing down my thoughts above I have bought some more at £18.11. Hope they stick to the business model long term. The technical indicators look good for an entry (although I am just learning the technical stuff - may not be reliable)

[scooper72] 30/4/2018 12:18

Many thanks for those estimated percentages

[aimingupward2] 30/4/2018 12:09

The AGM is on 25th May and we are told that there will be "a short presentation for investors". Presumably encouraging, otherwise why would they do it!

[aimingupward2] 30/4/2018 11:43

I don't really know the answer to that, scooper, but have read that, whereas only around 50% of the gaming industry services are outsourced (and KWS are looking to that rising to 80% in the future), the corresponding figures for the film and T.V. industries are both above 90%.

[scooper72] 30/4/2018 10:51

Appreciate the quotes from the company report - let's hope the next leg up breaks through all the brokers predictions. When they talk about moving into providing support services for the TV market what are they thinking of? Back to where they started out with games - Translation services?

[scooper72] 30/4/2018 10:47

Put that way shanklin I get the point. Thnx

[panic investor] 30/4/2018 10:44

If they did that I would sell immediately - they are not game developers - do what you know !

[aimingupward2] 30/4/2018 10:40

scooper, I concur with what snew has written and also think that KWS is still in the early stages of it’s development. They said as much at the end of August last year - “acquisitions within the gaming services industry are still at an early stage”. If you read back at what the company has said in it’s reports to shareholders it is clear that they foresee not only plenty of growth in their current areas of operation but also in several other related fields, e.g. “e-sports, e-Learning, film and T.V. remain part of our longer term road map”. Broker Berenberg has also spoken of “vast opportunities “ for KWS.

We saw adoubling of the share price from late July to late July to late October last followed by 6 months of going nowhere. A second leg upward seems to have started which, if we get clear of 1850p, could possibly see another doubling to take us well beyond brokers current target prices.

I bought in almost a year ago at just over £8, added recently at just over £15, and am now going to sit tight!

[snew] 30/4/2018 10:28

Scooper - If it is any reassurance I was doing the same at 17, 10 years later and have not turned into a zombie yet!

Still play here and there, but don't have as much time on my hands these days. I still spend too much money on games which is a good sign for KWS!

[shanklin] 30/4/2018 10:23

I think it would be most unwise for KWS to start competing with their customers by producing their own games.

[scooper72] 30/4/2018 10:21

Thanks for your thoughts snew. Good point made with your publishers analogy. Agree with u on the 18+ market. Bit worried about my 17 year old going into his adult life with gaming being his main social hobby. But like u say it is a generational thing. I used to wander the streets with my friends as a teenager on a Friday evening. The current lot are on the sofa communicating through head sets.

[snew] 30/4/2018 09:53

Scooper -

I personally think they are still quite early in their journey and hope there is plenty of growth to come.

I think it could be a mistake for KWS to start developing (and publishing) games from scratch. I think this would be further outside their current business model than many realise as they do not have the creative talent on their books to come up with the concepts and story writing for games. It may be a stretch but,the only thing I can compare it to would be a book printer deciding to start writing their own books.

Personally I hope their stick to their business model of providing a service for publishers and take on more clients. Publishers will be able to produce games cheaper if they can outsource components to KWS. This will lead to a lower entry barrier for new games publishers, more games being produced and more titles for KWS to get revenue from.

Being a millennial, I am convinced that gaming will continue to grow. People no longer stop playing video games when they become adults. Games for 18+ is now a growing market.

Just my thoughts on the wider picture.