Shares in fantasy worlds videogame developer Frontier Developments (FDEV:AIM) sank 2.8% to £32.80 after pushing back the release of two titles to the 2022 financial year.

The next major internally developed release is Elite Dangerous Odyssey which will allow Commanders to explore distant worlds on foot for the first time and will seamlessly merge with Elite Dangerous’ iconic cockpit experience.

Over its lifetime Elite Dangerous has generated over £100 million of revenues with more than 4 million base game units sold. The ‘large and engaged player community’ has high expectations for the new release and this together with Covid-19 related challenges of collaborative working on a large project has resulted in some minor delays.

The expected release on PC, which is the largest platform, will go ahead before the end of the financial year on 31 May 2021, slightly behind the original target of between January and March.

The game will now release on PlayStation and Xbox consoles in the new financial year. Remote working challenges have also impacted the company’s third-party publishing label resulting in Lemnis Gate also being released later than anticipated, falling into the 2022 financial year.


Frontier expects to report revenue of £37 million for the first half to 30 November, up 16% year-on-year. Revenue in December, typically the biggest month of the year were ahead of expectations pushing trading for the current financial year ahead of the board’s original expectations.

Management is sticking with its previously guided revenue range of between £90 million and £95 million despite the delays in console releases. Consensus analyst estimates are £93.1 million according to data provided by Refinitv.

For the 2022 financial year the current range of analysts’ revenue projections is between £133 million and £153 million according to the company.

It added, ‘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.’


Shore Capital commented, ‘we see Frontier as one of the long-term winners within the video games sector, however, due to the excitement of the industry over CY2020 along with encouraging trading performance of the Group, an FY21 PER of 77x and an EV/EBITDA of 32x is a high entry price.

‘Any drop in Frontier’s share price is likely to be short-lived, in our view, given the momentum within the business. Based on increased optimistic long-term forecasts, we upgrade our share price to 3100p but retain our hold recommendation.’


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Issue Date: 13 Jan 2021