13 January 2021
Frontier Developments plc
Frontier Developments plc (AIM: FDEV, 'Frontier', the 'Group' or the 'Company'), a leading developer and publisher of videogames based in Cambridge, UK, provides an update on trading following the Holiday period and in advance of the publication of interim financial results:
· Trading in the current financial year to date is ahead of the Board's original expectations
· Extended home working has created additional development challenges
· Elite Dangerous: Odyssey is still planned for release on PC in FY21, with PlayStation and Xbox releases now coming in FY22 to ensure the best experience for players on all platforms
· Frontier Foundry title Lemnis Gate is now planned for release in FY22
· Notwithstanding the decision to move these releases to FY22, the Board continues to expect that revenue for FY21 will be in the range of £90 million to £95 million
Trading in the first six months of the current financial year ('H1 FY21' - 1 June 2020 to 30 November 2020) was in-line with expectations, with strong performances from all four existing titles, including major new platform launches for Planet Coaster and Jurassic World Evolution in November, the final month of H1 FY21. Total revenue of approximately £37 million for H1 FY21 is expected to be reported when interim results are published on 3 February 2021, which represents a 16% increase over the comparative period (H1 FY20: £32.0 million).
Revenue in December, which is typically the biggest month of the year for videogames sales, was stronger than expected across all four titles, with both base games and paid downloadable content ('PDLC') selling ahead of expectations. As a result, trading in the current financial year to date is ahead of the Board's original expectations.
We successfully transitioned to working from home prior to the official lock-down in March 2020, enabling our teams to continue to work as effectively as possible. Our talented and dedicated teams performed amazingly through the challenges of 2020, continuing to develop and launch high quality content to our player communities, including the great technical achievement of expanding our audiences with Planet Coaster being launched on both current and next generation PlayStation and Xbox consoles, and Jurassic World Evolution having added the Nintendo Switch to its list of platforms. In general we found individual task-based working in most cases to be just as effective from home as from the office, but are continually trying to adapt our processes for group and planning tasks that require collaborative working. There is no question there are still some efficiency challenges, especially for larger projects, when working remotely.
ELITE DANGEROUS: ODYSSEY
Our next major internally developed release is Elite Dangerous: Odyssey, which is a major new paid era for Elite Dangerous, allowing Commanders to explore distant worlds on foot for the first time, taking on new missions and engaging in intense tactical combat, seamlessly merging with Elite Dangerous' iconic cockpit experience. Premiered during The Game Awards on 10 December 2020, reaction to the Elite Dangerous: Odyssey trailer has been positive and encouraging in advance of its release this year.
Elite Dangerous continues to perform well through an engaged and ever growing community of Commanders. During 2020 Elite Dangerous hit its highest ever player numbers shortly after the Fleet Carriers update at Easter, and then again higher still since on multiple occasions, including just before Christmas. There is a great deal of excitement around Elite Dangerous: Odyssey both outside the Company and within. Over its lifetime Elite Dangerous has already generated over £100m in revenues, with over 4 million base game units sold. A successful strategy to seed new players in advance of the launch of Odyssey yielded an additional 8 million base game owners through the launch of Elite Dangerous on the Epic Games Store in November 2020 including a 'Free Week'.
As always we are committed to delivering a high quality experience through the release of Odyssey, to a large and engaged player community with high expectations. Odyssey is coming together well, despite Covid-related challenges with collaborative working on such a large project, which are resulting in some inevitable minor delays.
Having reviewed project timelines to take into account the renewed need to continue with remote working for the near future, as well as our commitment to release only when we are certain that the experience for our players, on all platforms, will be as enjoyable as possible, our launch plans for Odyssey have now been updated.
Elite Dangerous: Odyssey is expected to release on PC, the biggest platform for Elite Dangerous, before the end of the financial year (which ends on 31 May 2021), albeit slightly later than our initial target for Q1 2021 (January to March). This will be preceded by an alpha period. Our plan for PlayStation and Xbox is to submit console versions for approval as soon as possible after we have released on PC, rather than putting the console developments of Odyssey under additional time pressure by planning for a simultaneous PC/console launch. PlayStation and Xbox console releases will therefore now come in FY22.
Covid-19 remote working has also adversely impacted some of our development partners under Frontier Foundry, our games label for third party publishing. Lemnis Gate, the awarding winning FPS game with an intriguing time-based strategic element, will now release in FY22 versus the original plan for a FY21 launch. We have a number of other exciting partner titles planned for FY22 release, and remain confident that Frontier Foundry will continue to grow and so become a material part of our business.
Our existing portfolio, including both base games and PDLC products, continues to sell ahead of our original expectations for FY21, and based on all currently available information the Board's projections for FY21 remain in-line with the previously guided revenue range of £90 million to £95 million, despite the Elite Dangerous: Odyssey console version and Lemnis Gate launch revenues moving into FY22.
The current range of analysts' revenue projections for FY22 is £133 million to £153 million. The Elite Dangerous: Odyssey console version and Lemnis Gate launch revenues will now supplement our initial estimates for FY22. We anticipate the continued strong performance of our existing portfolio in FY22 alongside contributions from an exciting line-up of new games, including two multi-platform releases incorporating major global IP licenses and a number of Frontier Foundry titles.
David Braben, Chief Executive, said:
"2020 was a hard year for a great many people because of the challenges of Covid-19. Despite this, and doubtless helped by lockdown boosting demand for screen-based entertainment around the world, we had a successful year through the hard work and adaptability of our talented teams. Our four great franchises have really long play times and engaging social aspects to them, which make them well-suited to lockdown.
We know that our Elite Dangerous community are looking forward to the arrival of Odyssey this year, and we're focussed on delivering the high quality experience that they expect and deserve. 2021 is set to be another great year for Frontier."
This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation (EU) 596/2014. The person responsible for making this announcement on behalf of the Company is Alex Bevis.
Frontier Developments +44 (0)1223 394 300
David Braben, CEO
Alex Bevis, CFO
Liberum - Nomad and Joint Broker +44 (0)20 3100 2000
Neil Patel / Cameron Duncan
Jefferies - Joint Broker +44 (0)20 7029 8000
Max Jones / William Brown
Tulchan Communications +44 (0)20 7353 4200
Matt Low / William Booth / Tom Blundell / David Allchurch
About Frontier Developments plc
Frontier is a leading independent developer and publisher of videogames founded in 1994 by David Braben, co-author of the iconic Elite game. Based in Cambridge, Frontier uses its proprietary COBRA game development technology to create innovative genre-leading games, primarily for personal computers and videogame consoles. As well as self-publishing internally developed games, Frontier also publishes games developed by carefully selected partner studios under its Frontier Foundry games label.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.