12th Feb 2014 12:05
LONDON (Alliance News) - Video games developer Frontier Developments PLC Wednesday said it swung to a pretax loss in the first half of its financial year as it increased investments in its transition, booked a hefty charge for the under-performance of its Coaster Crazy franchise, and saw self-published title revenues drop by a third.
The company is transitioning from being primarily a video game developer for external publishers, to developing and licensing technology to support games for external publishers, other developers and its own self-published titles.
In the half year ended November 30, Frontier Developments swung to a pretax loss of GBP1.6 million, down from a pretax profit of GBP921,000 in the year-earlier period. Frontier said that costs had risen as a result of its investment in its transition strategy, and also due to costs relating to its initial public offering on AIM.
Additionally, Frontier posted a GBP280,000 impairment charge for its 'Coaster Crazy' franchise after it found that the monetisation level of its free-to-play game was not as successful or as quick as the company had expected.
Revenue declined to GBP5.5 million, down from GBP6.0 million in the previous year, although Frontier said this decline was expected. The timing of the release of its title 'Coaster Crazy Deluxe' towards the end of November and a small recognition of revenues from its 'Elite: Dangerous' title meant that self-published revenues dropped 36%.
Publishing revenue also dropped 17% as a larger proportion of work was moved towards Frontier's self published titles, and it spent less time working on publishing.
Frontier expressed confidence in its 'Elite: Dangerous' title, which it funded via crowd sourcing website Kickstarter at the end of 2012 and launched in December 2013.
"The self-funded investment we are making in Elite: Dangerous will continue to bear fruit over the next six months as we make further releases such as the recent Alpha 1.2 multi player build and beyond, in parallel with developing new projects with strategic publishing partners," said Chief Executive David Braben in a statement.
Shares in Frontier Development were trading up 3.5% at 171.75 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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