Frontier Developments Half Year Trading Update

Key insights

6 takeaways

01
Frontier Developments is transitioning to a self-publishing model, leading to a planned reduction in headline revenue and EBITDA for the six-month period ending 30 November 2013.See it on page 1
02
The company maintains a stable financial position with over £11 million in cash to support its ongoing investment in internal intellectual property.See it on page 1
03
Development of Elite: Dangerous has secured over £2.1 million in funding from more than 40,900 backers and has successfully launched Alpha Phase One.See it on page 1
04
The proprietary Cobra technology is being utilized for multi-platform releases, including Zoo Tycoon for Xbox One and Coaster Crazy Deluxe on Wii U and iOS.See it on page 1
05
A new partnership with Atari Interactive has been established to manage the distribution and format expansion of the RollerCoaster Tycoon franchise.See it on page 1
06
Operational infrastructure is being scaled across studios in the United Kingdom and Canada to support the company's shift toward self-publishing and e-commerce.See it on page 1

Summary

Frontier Developments is currently executing a strategic transition from a traditional developer for external publishers to a self-publishing model supported by proprietary technology. This shift involves significant investment in internal intellectual property and licensing, which has resulted in the anticipated reduction of headline revenue and EBITDA for the six-month period ending 30 November 2013. Despite these short-term financial adjustments, the company maintains a robust balance sheet with over £11 million in cash, providing a stable foundation for ongoing development and expansion.

Operational progress is anchored by the development of Elite: Dangerous, which has successfully raised over £2.1 million from more than 40,900 backers. The project has reached key milestones, including the launch of Alpha Phase One to 1,400 participants and the integration of the game code with Oculus Rift virtual reality hardware. Simultaneously, the company continues to leverage its proprietary Cobra technology to support multi-platform development, as evidenced by the release of Zoo Tycoon for the Xbox One launch and the cross-platform deployment of Coaster Crazy Deluxe on Wii U and iOS.

The company’s growth strategy is further bolstered by new partnerships, including agreements with Atari Interactive to manage the distribution and format expansion of the RollerCoaster Tycoon franchise. With studios in the United Kingdom and Canada, Frontier Developments remains focused on scaling its self-publishing capabilities and e-commerce infrastructure. Management maintains a positive outlook, emphasizing that the current investment phase is essential to securing greater long-term returns and reinforcing the company’s reputation for high-quality, innovative gaming experiences.