Keywords Studios Share Discussion Threads

[rivaldo] 04/11/2019 08:11

Encouraging for the sector - and KWS - that Team17, a "global games label, creative partner and developer of independent ("indie") premium video games", issued this excellent trading update today:

"The Company has continued to experience strong customer traction from both new and established games throughout the second half of the year and now expects both adjusted EBITDA and revenue to be ahead of market expectations for the current year"

[1670127] 01/11/2019 17:26

Btw epic are suing the individual not KWS. Which is interesting. Security seems lax as they were able to email an image to their private account, you would expect this capability to be disabled. It is interesting that they are not suing KWS. Undoubtedly there will be an NDA in place between the companies so KWS should a duty of care to keep their IP secret. Will be interesting to see what happens if it goes to court. I would have thought that KWS should sue the employee as my guess is that the employee have signed thier NDA not Epic's but I could be wrong. Given the size of Fortnite, expect this to be all over the internet at the weekend now it is in the public domain. Could this be the cause of the recent share drop?

[1670127] 01/11/2019 17:14

@steeplejack .. I am under NDA with two of the KWS acquisitions and held very senior positions at both over 12 years. I am very careful about what I disclose as I don't want to breach them so only share generic industry knowledge and information that I have acquired since leaving each of those roles as that is not covered by the NDAs. Wish I could share more!

[1670127] 01/11/2019 17:06

hxxps://www.lapresse.ca/actualites/justice-et-faits-divers/201910/31/01-5247866-un-montrealais-poursuivi-par-lediteur-de-fortnite.php

For those that don't read french! Looks like a KWS employee leaked information relating to the new Fortnite layout. This is the risk of outsourcing which is really never discussed. The individual has been sacked but it raises big questions around how they were able to get the images out of KWS.

[steeplejack] 01/11/2019 08:44

Yes I agree,the presentation didn't entertain the prospects of a slowdown and for all 1670127's esoteric industry knowledge,I won't be questioning the managements optimism for now.This is a thin market,attractive to shorters and proprietary books.The volatile share price isn't that instructive in itself,there's a lot of boys with toys screwing with the shares.

[1670127] 31/10/2019 09:58

You are correct in the notion that H2 is bigger, this is mainly around game developers wanting to get their titles ready for Christmas. I would expect KWS revenues and margins to be higher this half as they maximise assets working double shifts. Share price is not based on short term moves. Acquisitions have been small this year compared to previous years, with a bigger starting revenue % growth will drop markedly this year. That's why the valuation is being questioned. I am also aware of some customer challenges from friends working there but doubt they are impacting the share price.

[mr euro] 31/10/2019 08:14

Sumo (results presentation) are not and do not forsee any slowdown, h2 is normally a much bigger revenue period than h1. Current valuation is not expensive and an opportunity to accumulate in my view. I am already maxed on kws but will buy more over the next few months if it gets cheaper.

The outsourced trend and market size increase offers a ton of growth however I would like to see them do more in the TV/film production area.

[the white house] 30/10/2019 17:09

A GBP300k sale gone through today, on a share with limited trade this has been an anchor for a while.Slowdown views below do not match what is happening down here in Brighton where their test ops are expanding soon into a large office block (in which I have previously worked myself spookily (in an unrelated field))

[1670127] 30/10/2019 14:55

We shall see what happens. All I can tell you is that the company worked for last time the game console cycle occurred saw a 50% reduction in testing and localisation services, these are typically back end in the development cycle. Games development, for AAA, titles can take 12-24 months. The added challenge is getting consoles to test on, which are not readily available and tend to go to the developers ahead of the test companies. So even if there was work kws would be limited by thier availability, even working tripple shifts. This is the reality.

[rivaldo] 30/10/2019 14:09

Game development expenditure should increase in the run up to the launch of next-generation consoles next year.

As Edison summarise:

"As game complexity increases, there is a continuing trend towards outsourcing to manage the risk and cost of the large team sizes required to create market-leading titles. This complexity is only likely to increase as we head towards the next console cycle. Consequently, we expect the market for outsourcing (estimated by Keywords to be worth c $6bn+) to grow more rapidly than the overall games market (we estimate c 11%) as developers increasingly outsource to focus on their core
operations and improve flexibility.

A number of drivers underpin the growth of the games sector. Keywords continues to benefit from the trend towards games-as-a-service (GaaS), which necessitates ongoing content creation to expand the core game release and drive continuing player engagement. As streaming services are rolled out (eg Google’s Stadia), support for a growing list of back-catalogue titles is likely to offer new opportunities for Keywords.

Another driver is the growing maturity of e-sports, requiring the production of marketing content, customer support materials and ‘live translation’ of event content.

Keywords also enjoys a strong position in the fast-growing mobile games segment of the market, offering continuous localisation work in as many as 50 languages.

Mobile games continues to be the fastest-growing games segment (Newzoo forecasts double-digit growth to 2022), with Asia the driver of much of this growth, where Keywords continues to expand its presence."

[phowdo] 30/10/2019 13:20

Sony results just out. Slowing ahead of console transition.
Its always the outsourced stuff that gets cut first when business wanes between the console cycles. Googles Stadia has proven some respite, will be interesting to see how that launchs.

[1670127] 30/10/2019 10:36

I think value is part of it. As I have indicated before the lead up to the release of next gen consoles can lead to a reduction in need for outsourced services for the 18 months before release. This could put a break on the growth story in the short term. After they are released there is a big uptick 12-18 months later. The last one almost took the company i worked for under (they are now one of the Keywords studios). The question for me is whether, with the size of the company, they can get through that period unscathed. If they can I think there is a good up story to push the price on.

[scooper72] 29/10/2019 21:03

What is the main case the shorters have for their positions. Is it just over valued? But then it's a growth business in a growth market that is v fragmented. Or is there some other concern about management? Can't imagine what.

[haggishunter] 29/10/2019 18:31

5.20% yesterday

[mp79] 29/10/2019 17:30

What is the shorts position currently..anybody knows?

[1670127] 28/10/2019 12:55

So that should be a good opportunity to go and sell their QA services!

[mr euro] 28/10/2019 12:09

They are not listed with any credits I can see anywhere. Game was developed by Visual Concepts.

[1670127] 27/10/2019 15:53

Anyone know if KWS worked on this. They have 2k games listed as one of thier clients and the previous version of the game. If they didn't could be an opportunity, if they did, could be problematic.

[the white house] 24/10/2019 11:32

25,000 share seller gone in the last hour...should make life easier...added

[mr euro] 22/10/2019 22:50

At this rating I have been a decent sized buyer. Accumulated stock that represents 15% of my portfolio, my biggest holding. I like the story, see growth ahead and I'm sure some turbulence. Tucking these away.

[1670127] 21/10/2019 19:32

Ps I'm in Montreal next month and will catch up with a lot of friends who still work there so should hopefully get a better view on how they are doing.

[1670127] 21/10/2019 19:31

It's much more likely to be caused by lower growth rates and the new console cycle which will likely see developers holding off developing to focus on the new platforms. What I will be interested in next results is the level of debt. With smaller acquisitions and limited investment the small amount of debt they had built up should disappear, if it doesn't then there may be something strange going on.

[aoiaoi] 21/10/2019 16:48

Being in Dublin has absolutely no effect on KWS business and Brexit. None at all .