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Developing Our Business to Achieve Repeatable Success

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Developing Our Business to Achieve Repeatable Success OUR STRATEGY AND BUSINESS MODEL DEVELOPING OUR BUSINESS TO ACHIEVE REPEATABLE SUCCESS We invest our development resources in games with strong franchise potential. In order to maximise the return on our core skills and assets we target game genres where we have established expertise and intellectual property. How we create and nurture our franchises CREATE BUILDING PLAYER NURTURE Frontier uses experience gained Frontier avoids ‘pay-to-win’ features, from a track record in the games NUMBERS AND instead continuing to expand each industry over three decades to ENGAGEMENT franchise offering through an ongoing create franchises that build on our program of free and paid-for world-class expertise. expansions and add-ons HIGH QUALITY BOOST PLAYER EXPERIENCE INNOVATIVE EXPERIENCES INCREASING AWARENESS We continue to invest in our organisation Our development process uses our proprietary a level more appropriate to the local economy, to create a model of repeatable success. COBRA development tools and technology as we did with Planet Coaster in China in To accelerate our progress and increase to facilitate innovative features and the February 2017. In particular we note the the frequency of launches we are scaling creation of top quality self-published games growing Chinese market for premium PC up our organisation, not just in terms of staff with strong differentiation for the PC and games. Importantly, the recent strategic numbers, but also in terms of leadership skills, console audiences. Our control of this investment in our business by Tencent will training, organisational structure and process. technology also removes risk related to allow us to more easily take advantage of ongoing access to third party licensed their unparalleled expertise and distribution We are also investing in facilities. It is our technology alternatives, risk relating to capabilities in their home market for belief that having all our people in Cambridge ability to fix uncovered problems in that our franchises. working together in a single building will technology and lack of control over the maximise our operational effectiveness delivery dates and feature roadmap of such Major new releases will be key drivers of and efficiency, and in spring 2018 we will solutions. It also facilitates rapid response revenue. Because of the small number of achieve this when we move into new office to market opportunities like support for franchises and relatively infrequent major space on the Cambridge Science Park. virtual reality and augmented reality. releases Frontier is currently able to make, revenue is sensitive to the specific schedule Our development focus is on PC and console We continue to assess the distribution of such releases and may therefore exhibit titles, as together these segments represent channels and platforms we use to achieve ‘stepped’ behaviour, as those new franchises the majority of the available market by revenue an optimal addressable audience for each are released. In the future, as we successfully and generally the audiences on these game, and the monetisation strategy for scale the number and frequency of franchise platforms have valued games that exhibit each franchise. We participate in price releases, annual revenue growth should Frontier’s key development strengths. promotions on each of the distribution accelerate and our dependency on each platforms we use for each of our games as major release should decrease. We use online channels to create and engage appropriate to its life-cycle stage, allowing with a fan-base or community during game us to reach the widest possible audience. development, which provides a valuable source of feedback and an enthusiastic We also monitor the geographical performance community for each franchise before of our franchises and will continue to look first release. for opportunities to tailor our local price to FRONTIER DEVELOPMENTS PLC 06 ANNUAL REPORT AND ACCOUNTS 2017 STRATEGIC REPORT CREATING AND MANAGING FRANCHISES In order to maximise the return on our core potential, and plan for strong post-launch review potential acquisition targets that skills and assets we target game genres on PC franchise support to further help realise could augment our capacity or add new and console platforms where we believe we this potential. capabilities as well as IP that may help can both i) deliver high quality, differentiated us achieve our goals. offerings using our established expertise and We will continue to grow the capacity and intellectual property, and ii) have a strong capability of our organisation in both commercial We will endeavour to enhance and expand chance of successful market entry, based on and development areas in order to further our franchises and grow their audiences using past experience or knowledge of that sector. the successful evolution of our franchises. appropriate additional products, platforms, media, marketing, distribution channels and We use this repeatable model to invest As part of this process, we will explore charging models through investing in the our resources with the intention of creating potential partnerships and licensing necessary people, organisation, resources world-class games with strong franchise opportunities. We will also continue to and infrastructure. evolution ELITE DANGEROUS PLANET COASTER JURASSIC WORLD EVOLUTION Continuing to blaze a trail Redefining a popular genre Building our own Jurassic World Read more from page 08 Read more from page 10 Read more from page 12 FUTURE FRANCHISES We are already scaling up for the future All future franchises will be selected using review all possibilities to determine the so we can release new games more frequently the same approach described above that was optimum strategy for each franchise on a whilst continuing to develop our existing used for Elite Dangerous, Planet Coaster case-by-case basis. We are building a broad franchises. As well as Jurassic World Evolution and Jurassic World Evolution. The use of portfolio of franchises, each different to the being in full production we are in the early external IP in Jurassic World Evolution does last, and each with the capabilities to expand stages of planning our next two, as yet not imply that this will be the case for all over time, as we have already seen with unannounced franchises. our future franchises; we will continue to Elite Dangerous and Planet Coaster. FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2017 07 OUR FRANCHISES CONTINUED CONTINUING TO BLAZE A TRAIL Elite Dangerous is now in its third year of Having the base game and Horizons seasons full release. We have continued to release of expansions in the market covers mid-price expansions in the Elite Dangerous: Horizons entry to the franchise with an upgrade path, season, and corresponding updates to the and we bundle the two together with in-game original Elite Dangerous game, simultaneously digital items to create a Deluxe edition for a on both PC and Xbox One platforms following premium price point entry. We believe each the launch of Horizons on Xbox One in product in the franchise offers great value, June 2016. and our further in-game monetisation avoids ‘pay-to-win’ game mechanics. Simultaneous releases on all supported platforms is planned to continue going forward, The Elite Dangerous franchise continues to including Sony’s PlayStation 4 following the perform strongly and we continue to focus franchise’s debut on the platform in June 2017, on enhancements within the strategy of after the end of the fi nancial year, which further improving perceived quality and signifi cantly expanded its addressable audience. sentiment, adding signifi cant long-term new features and supporting the unique These updates add to the quality of the game, evolving player-driven story, which all renew the interest of existing players, and players experience together. We expect also generate additional coverage resulting to further expand the player base over in new sales. The attach rate of Elite Dangerous: the next fi nancial year, adding new Horizons to the base game continues to content and increasing the audience. grow steadily, helped by the regular updates. The Horizons season of expansions Each expansion offers new headline gameplay features 2.0 2.1 plus a large number of quality of life and other tweaks, fi xes and improvements, and there is an accompanying PLANETARY THE ENGINEERS ‘1.x’ update to the base game. LANDINGS MAY 2016 (PC), DECEMBER 2015 JUNE 2016 (XBOX ONE) The release of 2.4 ‘The Return’ will complete the Horizons Expanded gameplay Added loot and crafting mechanics season of expansions. Horizons will continue to be sold as to planetary surfaces to the game to allow players a substantial expansion product with all content available for the fi rst time. to upgrade the performance at the time of purchase. of their ship and weapons. FRONTIER DEVELOPMENTS PLC 08 ANNUAL REPORT AND ACCOUNTS 2017 STRATEGIC REPORT 2.2 2.3 2.4 THE GUARDIANS THE COMMANDERS THE RETURN FUTURE OCTOBER 2016 APRIL 2017 SEPTEMBER 2017 DEVELOPMENT Expanded the gameplay Offered the ability for multiple Supports the ongoing story ONGOING possibilities of each ship by players to crew a ship and arc related to Thargoids, the We have announced that adding ship-launched fi ghters. represented player characters franchise’s fi rst alien species, and the ‘season pass’ business in game with sophisticated their interactions with humans model will be superseded by an customisation options. in the Elite Dangerous galaxy. alternative after the release of 2.4 The Return. FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2017 09 OUR FRANCHISES CONTINUED REDEFINING A POPULAR GENRE Planet Coaster was successfully launched in November 2016 after a short Beta period, achieving the global #1 position on the Steam distribution channel and continuing to sell strongly through the subsequent holiday period. In accordance with our strategy we began to release free updates, each of which add headline features but also expand and improve different creative and management aspects of the game.
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