A letter to Frontier Developments

[SurgicalGlitch]

Dear Frontier Developments (And the Fan's of Elite)

I read today some vary upsetting news about the loss of a reported £1.5 million for the last financial year from Frontier Developments. This obviously comes off the back of poring money into what I believe to be the greatest space simulation that you can get, Elite Dangerous.

I recently got my Oculus Dk2 as I am a indie developer making my own game. I quit my job of 6 years work to fund my own game. Any way, Just got my Oculus Dk2 kit in the mail so I can add support to my game but also to try it in Elite, and MY GOD!....The immersion. I have a X-55 Joystick and Throttle as well that add to the expiriance. But guys, do yourself a favour. I don't expect you to get the Oculus Dk2 as it is really for developers or people who cant wait. But when the full product is ready to go, get one for Elite Dangerous, by god it is worth every cent! They should be sold together they work so well. its like Elite Dangerous and the X-55, they work so well together its like bread and butter, the X-55 works better with ED than any other flight game I have.

Any way back to the point and enough about how well your programming of external products has paid off.

The financial loss of £1.5 million is a shock to me. well not so much when I look at a money hungry beast that shall not be named, that seem to think its right to slap a $350 USD price tag on a 3D Model for a object/game asset that should be sold in game by a NPC for in game currency by the player.

I don't know about this in game advertising. I am vary nervous. As long as its true product placement, but how would you advertise real world products in a sci fi setting....It would be like advertising Coke in Starwars right?! It scares me [redacted]less.

As for these Item skins in the shop that I am ALL FOR! I have cashed in on A LOT of them! as long as you have stuff that dose not alter combat and make it harder for another person to kill another like another space sim I will not name! then I am all for ship skins and will continue to buy the. But don't go selling Ship's for $150 USD and pulling that sort of crap. Please. That's all I say.

For more on the financial upset that I read about look below

http://www.kotaku.com.au/2014/09/not-everyone-making-epic-space-simulators-is-rolling-in-cash/

 

[Mazhurg]

Dear Frontier Developments (And the Fan's of Elite)

I read today some vary upsetting news about the loss of a reported £1.5 million for the last financial year from Frontier Developments. This obviously comes off the back of poring money into what I believe to be the greatest space simulation that you can get, Elite Dangerous.

http://www.kotaku.com.au/2014/09/not-everyone-making-epic-space-simulators-is-rolling-in-cash/

Planned transition loss:

The good news is the transition, so to speak, was entirely expected. As Insider Media reports:

Frontier said it had entered a planned transitional investment phase after its IPO to develop and launch Elite: Dangerous, its first large-budget self-published title.
Chief executive officer David Braben said: “We started the current financial year as we expected and are now executing the transition of our business to its next stage. I believe that the continued delivery of our plan will result in greater opportunity and return.”
​

Nothing to get upset about.

 

[MikeSnos]

They made a loss...

They're not bankrupt...

Many business make losses in development phases or during restructure...

They'll be fine!

 

[rand_h]

Let's buy more skins then to reduce the loss.

 

[ZeeWolf]

This is how businesses work.

How do you make profit during a period of planned investment?

They were partly self funding a very complex title during the financial period (remember that was last year so it doesn't reflect any of the recent income made from beta sales). This reduced their ability to take on work for third party publishers who would have carried some development costs on licensed software.

I don't see the issue myself, have worked for companies that did this.

 

[Yaffle]

For the avoidance of doubt I have no more data than that published by the company.

There is a difference between cash and profit. Profit is an accounting abstract, cash is the stuff that pays your bills.

Last time I checked the accounts (which you can get easily) there was over £8M in the bank. A long way from insolvency.

Just to put your mind at rest, Twitter is going strong and has yet to make a profit. Facebook made its first profit last year (I think, maybe 2012). Profit is not cash. When the cash runs out, that's when you have problems.

 

[Witzo]

As far as I understand it, it's a planned loss of £1.7m as development cost for ED. Necessary investment to build stuff.

In anticipation of improved returns beginning in the subsequent financial year we began a transition towards increasing our proportion of self-published revenue by investing £4.1m in the development and promotion of Eliteangerous and associated COBRA technology, which caused an expected and temporary operating loss of £1.7m.

Full year end result report here at the London Stock Exchange:
http://www.londonstockexchange.com/...rket-news-detail.html?announcementId=12072514


(Thanks to Googol for the link in his post: http://forums.frontier.co.uk/showthread.php?t=39471 .)

 

[Spectre Alpha]

Dear Frontier Developments (And the Fan's of Elite)

I read today some vary upsetting news about the loss of a reported £1.5 million for the last financial year from Frontier Developments. This obviously comes off the back of poring money into what I believe to be the greatest space simulation that you can get, Elite Dangerous.

I recently got my Oculus Dk2 as I am a indie developer making my own game. I quit my job of 6 years work to fund my own game. Any way, Just got my Oculus Dk2 kit in the mail so I can add support to my game but also to try it in Elite, and MY GOD!....The immersion. I have a X-55 Joystick and Throttle as well that add to the expiriance. But guys, do yourself a favour. I don't expect you to get the Oculus Dk2 as it is really for developers or people who cant wait. But when the full product is ready to go, get one for Elite Dangerous, by god it is worth every cent! They should be sold together they work so well. its like Elite Dangerous and the X-55, they work so well together its like bread and butter, the X-55 works better with ED than any other flight game I have.

I was totally unimpressed with the DK2 AT ALL! It is way too big and uncomfortably hot to wear for more than a minute or two at a time. I don't even like 3D glasses, but if this was the size of 3D glasses it would be way better. It is just another virtual boy with a little better tech, but no better delivery system. You strap it on your head and you feel like you have something strapped on your head. You can't look beyond it at all, and its cumbersome. Not a good product yet, but if it were more like google glass it would be worth getting. I have been using glass for a couple months now and it's a lot better system than this DK2 junk is. If oculous had a system like glass, maybe with dual units, one on each side, I'd get one and keep it, as it is I am sending this thing back until they get their act together.

 

[Tinman]

If there is one thing to take to heart from the latest financial news in FD end year results, it is this:

On May the 31st this year they had crowdsourced £3 million from 50.000 backers. This was the numbers after 1.5 years since the KS started.

Today, just 3 months after, they have doubled that figure to £6 million and a 100.000 backers!

Then take into account that the total budget for the first version of Elite is £8 million according to this article:

http://www.telegraph.co.uk/games/11051122/Elite-the-game-that-changed-the-world.html

Extrapolate those numbers and it's quite clear that even with a extremely pessimistic outlook the game will have reached break even before it's officially released. Everything beyond that point is pure profit and/or budget for future expansions.

Also...another thing to look at in the report is the amount of cash available in the company.

Last year the had £7.2 million of cash.
Exactly one year later they are now sitting on £8.6 million of cash.

So after investing money for a year into ED and the COBRA engine (plus other projects) they are now sitting on even more money...

I see very little reason to worry about anything financial at this point.

 

[Viajero]

Indeed. Most of the backer revenue has not been accounted for and still probbaly stated as a liability. No stated revenues this year from ED and active development costs mean a red operating result.

But that is the norm for start ups or new businesses doing their initial investing/developing before getting their first sales.

Cant see an issue yet.

 

[Ref Minor]

The financials were not worrying at all.

Think of it like this, you earn 10k a year and have 20k in the bank. Your job moves 30 miles down the road and you will earn 15k but you need a car to get there now. You spend 12k on the car. You have made a loss for the year but your financial situation is not bad, in fact now you can also use the car to deliver pizza in the evenings.

/end bad yet simple to understand analogy.

 

[ZeeWolf]

The financials were not worrying at all.

Think of it like this, you earn 10k a year and have 20k in the bank. Your job moves 30 miles down the road and you will earn 15k but you need a car to get there now. You spend 12k on the car. You have made a loss for the year but your financial situation is not bad, in fact now you can also use the car to deliver pizza in the evenings.

/end bad yet simple to understand analogy.

Yes this.

Or if the OP's "indie game" is moderately successful and he/she wants to write a sequel and registers a limited company, puts some of the original money made into the company account, hires a run down office on an industrial estate a few programmers an artist and a tester and spends a couple of years working on a bigger title than before.

No profit made during those two years. Nothing to cry over (unless you can't afford it in the first instance and run out of cash). Net result is lots of assets + liabilities. Projections are more profit than before.

You can stay and work by yourself but if you want to grow you need to put something back.

 

[CaptainKremmen]

The first computer game I wrote needed a computer to write it on.

I bought an Amiga 500.

When the game was written, I found a publisher, signed a contract, and got paid.


Nobody wrote me a "Concerned of Mayfair" letter between buying an Amiga and selling the game, telling me I was in trouble. But if they had, I would simply have stood by my approach, and my confidence in my own abilities as a developer.

 

[MikeSnos]

Nobody wrote me a "Concerned of Mayfair" letter between buying an Amiga and selling the game, telling me I was in trouble. But if they had, I would simply have stood by my approach, and my confidence in my own abilities as a developer.

Probably since most of your customers didn't live in Mayfair!

 

[CaptainKremmen]

This was back in the days when a developer had one customer - the publisher!