Full ‘Steam’ ahead for Frontier Developments?

It acknowledges that the Cambridge Science Park company’s share price “has given up all gains made ahead of its Planet Coaster 2 (‘PC2’) launch.”

“After a positive critic response (Metacritic: 80 per cent), a mixed reception on Steam (59 per cent rating) has curbed initial investor enthusiasm,” the bank reports.

“Yet encouraging hard sales data is emerging,” it adds. “Unit sales estimates from VG Insights and Gamalytic suggest 137k-162k digital copies sold within two weeks across Steam alone, implying £5m-£7m revenues from PC only, with console on top.

“PC2 also continues to rank in the top 35 sellers alongside top IP such as Baldur’s Gate 3 and CoD. Two free ‘hotfixes’ so far to address key user feedback, with more to come, should improve Steam scores.

“Overall, Frontier’s CMS execution looks positive, yet industry oversupply headwinds remain. We see PC2 performance as in line or marginally ahead of unadjusted forecasts heading into key Cyber Monday and Christmas trading. BUY.”