This Monday following a trading update announcing a reset of sales and profit expectations for the current fiscal year, Frontier Developments’ share price has dropped 42%. The Cambridge, United Kingdom-based game development company, known for titles such as Rollercoaster Tycoon and Elite: Dangerous, cited underperforming numbers for their latest title F1 Manager 2022 as well as low sales across their portfolio as reasons to reduce revenue projections for their current financial year.
While Frontier remains hopeful to exceed last year’s revenue performance of £114 million, expectations for the current financial year have been lowered to surpassing £100 million, netting an operating profit of £2 million. On the underperformance of F1 Manager 2022, Frontier stated:
“Player engagement at release in August 2022 and during the initial period after release was strong, and broadly in-line with original expectations. Unfortunately, sales performance during key holiday season price promotions fell materially below original expectations, potentially due in part to increased player price sensitivity related to worsening economic conditions.”
F1 Manager 2022, a racing simulator released for PC, Xbox, and PlayStation platforms, recorded sales numbers of 600,000, below company expectations. The game, while receiving a positive Metacritic score of 79, was the subject of controversy in 2022. Fans were disappointed by unfinished game mechanics and bugs found within the game, and Frontier received heavy backlash for stating “the development team’s focus must move fully onto projects beyond F1 Manager 2022” only 2 months following the game’s launch.
Frontier’s CEO Jonny Watts conveyed his disappointment at reset financial expectations:
As CEO, I am driving a change in emphasis to increase focus on our core strengths and skills, with particular attention to increasing the return on investment that we achieve from our world-class teams. We intend to grow the number of our development teams to increase the cadence of new releases, whilst continuing to nurture our existing portfolio, to achieve sustainable growth.
We have created a strong portfolio of games and we continue to learn and respond to challenges as we expand and nurture our portfolio. I am grateful to our talented people for their continued hard work.”