Frontier breaks $billion valuation barrier
Frontier Developments, the Cambridge-based world-leading video games developer, has three times topped the magical $billion valuation in the space of a month.
While only privately held startups qualify as unicorns, Frontier’s achievements set against the impact of COVID-19 on capital markets is little short of sensational.
And there is much more to come: The industry is already valued at $150 billion and is forecast to grow at a conservative 10 per cent a year.
Frontier first topped the $billion mark on June 2 and again on August 3 and went even higher on Tuesday morning when the UK markets opened.
Frontier has gone from strength to strength since transitioning to a new business model and listing on the AIM market in 2013 and 2020 marks a golden age despite coronavirus.
The company has a number of highly anticipated partnerships on the table that are being rolled out imminently and over the coming years; its strong track record over many years as both a developer and a publisher has seen its share price grow more than ten-fold in less than four years.
Frontier’s ‘launch and nurture’ strategy for its immersive games including Elite Dangerous, Planet Coaster, Jurassic World Evolution and Planet Zoo, is holding the business in high esteem within the gaming community.
Its recently established foothold in the third-party publishing business also has investors excited. With five development partners signed in less than 12 months, this publishing business looks set to add further value to Frontier’s already prosperous portfolio.
Iconic founder and CEO David Braben said: “We’ve had another great year, despite the challenges of COVID-19. We achieved our biggest PC launch to date with Planet Zoo, we agreed two major new IP licences – with Formula 1 and Games Workshop – and we signed our first five third-party publishing deals.
“Our terrific team have coped so well during the pandemic – working from home they continue to collaborate to produce amazing content to support our player communities around the world.”
“Rich, community-focused games like ours that are attractive to play but take years to master, have performed very well during these challenging times and we have every expectation of them continuing to do so, notwithstanding the macroeconomic uncertainties presented by the pandemic.”
Frontier has moved metaphorical mountains to curate the welfare of staff since taking the decision at the start of lockdown to move operations out of office for the time being and says its teams have adopted superbly to remote working.
Braben says: “In an environment where creative coding and collaborative ideation are at the centre of the working day, you might think that the business would find it challenging to connect a team of 550 people, but we have managed to pivot to remote-working so effectively during a time where many businesses are finding it difficult to maintain productivity.”
Frontier has initiated weekly video updates from Braben to staff and maintained continued support for mental wellbeing with a dedicated psychotherapist, life-coach, group counselling sessions, care packages and virtual yoga and meditation classes made available to employees.
The company has also launched an internal hub with information on coronavirus and collaborative advice on how best to work from home. The Cambridge Science Park office remains open for a handful of employees who are valuing some social support but there are no immediate decisions for the full workforce to return to HQ.
Frontier is making plans for a potential phased return later this year while keeping a close eye on advice from the Government.
It has also found time and money to sponsor the Centre for Computing History in Cambridge to lend support to the museum’s ambitious video game preservation project. The centre contains the largest documented collection of video games in the UK.
Braben said: “As someone who has been in the video game industry since 1981, I believe the work that the museum is doing in ensuring that those early computers and video games are preserved for future generations to enjoy and learn from is vital.
“A whole generation of programmers learned on the open and easy-to-program machines in those early years and have gone on to found major companies. This was the inspiration behind Raspberry Pi, too, to give that opportunity to new generations. I would urge other game and software developers to support the Centre for Computing History and ensure that our legacy is carefully preserved and well-documented.”
• For the record, Cambridge boasts 18 unicorns – companies that hit the $Bn valuation mark as privately owned startups. Abcam, Arm, Autonomy, AVEVA, Blinkx, CAT, Chiroscience, CMR Surgical, CSR, Darktrace, Domino, Improbable, Ionica, Marshall of Cambridge, Prometic, Solexa, Virata, Xaar.
Of course, the science & technology cluster is also home to a number of multi-billion dollar valued businesses that are quoted and Frontier Developments this week joined the likes of AstraZeneca, GW Pharmaceuticals, Domino Printing, AVEVA, Johnson Matthey and Bicycle Therapeutics in that coveted cohort.