Frontier Developments plc (5FD.F) Earnings Call Transcript & Summary

Let's get started then. So I'm Alex Bevis. I'm the CFO. Welcome to our financial '24 results presentation. [Operator Instructions] So with that, I will pass over to Johnny.

Yes. Thank you all for making the time this morning, much appreciated. So I'm going to run through the summary and obviously, we'll be talking about more detail as we go through the presentation. And obviously, we'd love to take your questions at the end. So if I was to categorize financial year '24, I'd say it was certainly a year of 2 halves. The first half was challenging. We had to take decisive action to turn around the second half and also to bring success to the future. In H1, we did a strategic reset to focus on our proven core strength. That's a creative management simulation games, CMS is from now on, so I don't have to get over that tongue twister. This was supported by an organizational review. We have to acknowledge this, it was very tough for our people, but it was absolutely necessary and we'll raise a focus on delivering it. I mean the 2 parts of that was the first one we had to reshape our teams. We have to encourage them to drive efficiency and to do more with less and that's exactly what they did. We also reduced the annual costs by around about 20%. Let me move on to the second half, and it was pleasing to see the strong H2 performance for our CMS back catalog, which delivered revenue ahead of expectations at GBP 89.3 million. These factors delivered a return to profitability in H2 on an adjusted EBITDA basis. And this was before the sale of the RCT3 publishing rights, which was around about the GBP 4.9 million mark. If you include those rights, we made an adjusted EBITDA profit of GBP 0.9 million for the year. And then finally, again, if we go back to our trading update in January, everybody was worried about our cash position. We've increased our traffic cash now to 29.5% during the financial year. So again, it was nice to see this turnaround and I would say, this foundation for the future. Alex, do you want to move to the next slide, please. So if I talk about the key releases and key events. Again, I think this really does illustrate that it was a year or 2 halves. So I'm going to work through sort of from top to bottom through this slide. So in H1, we launched 2 major games, Formula 1 Manager at '23 and Realms of Ruin, and we were very disappointed that they just did not deliver commercial success. Again, we talked about lots of that at the start of the year. This obviously contributed to that strategic CMS pivot, which I'll talk about and we will talk about more during the presentation. But then we move into H2, and it was really encouraging to see the launch of Planet Zoo Console. This was a critical and commercial success. I mean this is actually quite an important sort of landmark because it brought us back to releasing games, which actually make money. And also, I think it validated the CMS market, especially on Console. If you can recall, we actually said the premium -- we actually saw the premium SKU for GBP 99, which with the economic crisis and the cost of living, I think that just shows how passionate people are about our planet and our CMS games. Moving on, as part of our CMS pivot, we developed more PDLC for Jurassic World Evolution 2 and Planet Zoo. Just to drill and start a little bit more. Planet Zoo we did 18 PDLCs during this lifetime. And this is something that we decided to action. This is -- what's good about it is that we can forecast what it's going to make, and it delivers a really strong, predictable return on investment. So we've been doing more of that. And as I say, that really contributed to the revenue. I think Alex might go into this in a bit more detail, but we solve the option rights to Rollercoaster Tycoon 3. This is good for both parties. I think it was nice to accelerate some income coming into our business. And for Atari, it brought the whole franchise back together again. And then the final thing I'll talk about is these sales events in H2. As we know, the market has really congested and it's all about visibility. So having these future sales is really important. These relationships that we have with the platform holders is paramount to our success. Picking out a few of the Steam sales. We did the April Steam Frontier Publisher sale, which is our second most -- second biggest sale ever. This is bigger than all our Christmas sales that we've done before, and there's only one sale previously which was better than that and that followed a launch of a major, major title. And then the final one, which again was very, very pleasing was we actually call it the Planet Coaster, the Steam mega sale. This was where we did a 95% discount on Planet Coaster and within 9 days, we brought 1 million new players to the franchise. Half of those are from China. So again, this is all sort of reaffirming this CMS strategy that we have, the players is there readily want to consume the games that we make. So as I say, a year or 2 halves, it's pleasing to see how the business has turned around, and it is all about setting ourselves look for the future. Alex, do you want to move on to your slides?

Sure. Thanks, Johnny. So we'll move on to the cumulative revenue slide. So this is a firm favorite with investors. It's a great visual way of looking at our business. So this is cumulative revenue over the life of various games here, the vertical lines of months. So if you look at the furthest outline there Elite Dangerous, that's going to be coming up for its 10-year anniversary this December. So it's a pretty long period of time that we're able to sustain these revenues. I'm going to focus on the CMS games on the chart. So starting with Planet Coaster, Johnny already mentioned the mega sale day, you can see that blip towards the end of the blue line. So great performance from Planet Coaster. In terms of its revenue contribution versus the preceding year, it's very, very similar. So it's around about GBP 8 million for each year. I think we quoted in the RNS there is a 96% sustain. In other words, it only reduced by 4% in '24 versus financial '23, which is obviously a great result. Then looking towards the Jurassic games, the purple line at the top there is Jurassic World Evolution 1. So as you can see, that's the biggest revenue generator in terms of cumulative lifetime sales. That's still generating revenue, meaningful revenues. Of course, it was largely superseded by Jurassic World Evolution 2 when that came out, but it's still generating revenue for us on a bunch of platforms, including Switch. So we're very happy with the performance there. Then Jurassic World Evolution 2, it's pretty close to the level of performance of the first game. I'm very pleased with the revenue contribution in the year. It's actually our biggest revenue contribution, slightly ahead of Planet Zoo at just under GBP 23 million of revenue from Jurassic World Evolution 2. So another great performance. And as Johnny already articulated on the previous slide, PDLC is a really important element of that. As ever, what we want to do with these lines is keep them as steep and as straight for as long as possible. So great to see that performance from Jurassic World Evolution 2. And then I guess the kind of standout performance is Planet Zoo, as Johnny already talked about. Ignoring for a second, the Console Edition launch on PC, we achieved a sustained rate of just about 90%. So a great performance from Planet Zoo on PC helped by those PDLC packs. So we still bring a lot of people into Planet Zoo. And then, of course, on top of that, you see that bump up from the Console Edition launching. So what we want to do now with that green line is keep that as steep and as straight as possible. So great performance across the CMS games on a revenue basis. And I think turning on to the next slide now. So moving away from gross revenue. This is cumulative cash flow. And what we've done here, again, similar to the first slide is aligned on a time basis, the launches. You can see the launches coming in all at the same time. So the period before that, we are spending money because this is cumulative cash flow. So as revenue less all distribution costs or royalties, development costs and marketing costs. So what we're looking for is a strong launch to try and get back into profit very, very quickly. And typically, the CMS games have all done that within a month and then deliver substantial return on investments over time. So just going through the CMS games, again, you can see the strength of Planet Coaster there. Very good revenue generation turning into cash flow. Because of the lower cost to produce that game back when it came out in 2016, it's actually our strongest cumulative return on investment, something like 350% as a stat. So that's a great performance from Planet Coaster. Planet Zoo then is ticking up and has become our financially biggest generating game in terms of cash profit. So great performance from the Console launch overtaking Jurassic World Evolution 1. And then both the Jurassic games still obviously delivering very substantial cash contributions. So again, this is, I know, a firm favorite with investors, it's a great visual representation of the strength of our model of achieving those big launches followed by a long period of nurture. So moving on to the income statement, then we talked quite a lot about the revenue already and obviously, the CMS games being a good contributor. You'll see in the RNS, we quote a total proportion of revenue from CMS games at 62%. So great performance across those 4 titles. PDLC is an important element there. And broadly, it was about 50% across the whole of the CMS portfolio. So that Planet Zoo and Jurassic World Evolution 2, PDLC is still really delivering very well for us. Across the whole portfolio with all the other games, PDLC was, I think, about 65% -- sorry, base game sales was 65% and PDLC was 35%. But then we put within the base game the subscription deals. So excluding those, it was about 60-40. So PDLC is really critical for us, and we continue to invest on a case-by-case basis depending on the nature of the project. Moving on to gross profit margin. You can see that the substantial tick up there to 69%. So 2 main factors there. One is a bigger proportion from own IP games rather than royalty-based games in the revenue number and the other one is subscription deals. So subscription deals like game parts tend to come through with 100% margin, and this is any royalties to pay to the IP holder, hence, the bump up in gross margin. So this year, financial '25 that we've just started, I think will be similar to that level, probably not quite as high as that level depending on what deals come through. But certainly, 67%, maybe 68% gross margin is achievable for this year because of the substantial contribution we're expecting from Planet Coaster 2. Moving through the rest of the income statement, and then on an OpEx basis, you can see that over the whole year as a whole, we've reduced our cash OpEx by about 9% to GBP 65 million. I'll comment more on that on the next slide because it's more interesting, I think, to look at it on a half 1 half 2 basis. And then the RCT3 sale that Johnny already mentioned, in total, that was $7 million of income, GBP 4 million up front and GBP 3 million coming deferred. Accounting rules made us recognize all that revenue upfront with a discounted cash flow on the trailing $3 million. So it will take us quite a while, I think, to collect up that $3 million, but we've crystallized and recognized all of that gain in the year at 4.9%. But clearly, we're highlighting it as something of an exceptional so that we make sure we talk about the underlying performance, excluding that number as well. So moving on to the half 1, half 2 split. And here, I've put the preceding financial year on as well. So starting with revenue, you can see that revenue has ticked down actually in half 2. We had a much lower proportion from deals. Half 1 was very strong for deals. You might remember that we had F1 Manager 2023, going to Game Pass, for instance. So once you strip out subscription deals, we actually grew in the revenue terms, underlying revenue terms in half 2 versus half 1. So that's a great performance considering as well that we release 2 games in the first half with F1 Manager '23 and with Realms of Ruin. In the second half, Planet Zoo Console come through, which is obviously a very pleasing performance. But the underlying portfolio led by the CMS games and the PDLC has delivered really well as well. So I know when you look at the revenue, you think we're ticking down, but actually underlying sales in the second half were up versus the first half. Gross profit again, slight difference here, slightly stronger in the first half because of the contribution from subscription deals, but very happy with the 68% in half 2. And I think the other big thing to highlight on this slide is the cash OpEx. You can see we were running at sort of mid- to high GBP 30 million on a half year basis and we brought that down to GBP 27 million in the second half. So that excludes any restructuring costs. That's the underlying sort of cash cost. And that obviously positions us well to be able to get back into profit on both an IFRS and an adjusted EBITDA basis, hence, the statement we make in the RNS about being confident of achieving profit. We probably will have high levels of marketing spend in this first half with Planet Coaster 2 coming through. So I don't think it will be quite as low as maybe the GBP 27 million. But certainly, on a full year basis, our cost base is now probably at the high GBP 50 million of OpEx on a cash basis. Then just moving on to the IFRS numbers. I'm not going to run through all of these because a lot of these are duplicated by the slide earlier. I've put a box around some of the ones I'm going to talk about. So as usual, IAS 38, with the capitalization of dev costs and then the amortization or in our case, sometimes the impairment of those costs has come through. So percentage capitalized has fallen to just below 60%. There's a combination of factors there. Some of that is relating to F1, where we decided not to capitalize any costs given the financial challenges, the commercial challenges of that franchise overall. And the other one is Realms of Ruin, moving people onto other projects as maybe take a little while, of course, where you're planning for success there with a fairly long program of PDLC and nurturing. So moving those people across. We are -- we do have a lower percentage. That will tick up again in this year, maybe not quite to the level of FY '23, so somewhere in the 60s, I think. On amortization, then you might remember that in FY '23, we changed our amortization profiles, and we accelerated the amortization towards the launch and you can see that in the last couple of years, actually financial '23 and financial '24. So for financial '25, that amortization number will be coming down, although we have Planet Coaster 2 launching the underlying amortization overall in this financial year will be lower. And then impairments, we've had 2 years of pretty big impairments there. Of course, the previous year was F1 and Foundry titles and the impairment in FY '24 is for Realms of Ruin, which we've already talked about before. Other items to highlight there is the income tax credit, so video games, tax relief and some other credits are still very beneficial for us in terms of cash flow. In the income statement, we recognized 7, and we'll talk about cash flow in a minute. But I would think that we're looking at probably at least GBP 5 million of cash inflow from tax credits per year, which obviously is very helpful. And we don't put that in the adjusted EBITDA. That's on top. Moving on to the cash flow, then this is on an adjusted basis. So I highlight the tax number there, just over GBP 10 million of cash coming in from various tax credits, mainly VGTR. That's 2 years of returns in the U.K. So we posted the FY '22 and FY '23 returns and got those cash receipts in and that's obviously been a big factor in the cash generation, particularly in the second half, where we've increased cash in half 2 by about GBP 12 million, finished the year at almost GBP 30 million, and we're sitting now at the end of August at GBP 28.5 million. So I think Johnny mentioned it earlier, we're feeling good about our cash position and the future for that. So Johnny, I'll pass back to you to talk a bit more about CMS.

Yes. Thank you. So I think the question is why are we pivoting to the CMS strategy? I think Alex is Slide 5, which is a cumulative cash flow is really but the most point it basically shows that they make money and Planet Coaster having a 350% return on investment is amazing. But I want to say, why Frontier did CMS focused strategy. So the first one is a proven track record. We've been making games about CMS games about coasters and animals for over 20 years. It really is in our DNA. And I don't think it's the development, which is the most important part because I do think we did execute on Realms of Ruin and the Formula 1 management games are actually good games. The most important thing was is audience insight understanding how big that audience is understanding how the game can attach to that audience and how we can manage that long tail. That is what we really have learned over those 20 years. The other thing I like about CMS games is the subject matter really lends itself to PDLC. If you look, for example, at Planet Zoo, there are so many animals in the world that we can keep. There's always going to be a top 10 players want more coasters being launched. Dinosaurs being distilled all the time. And I think that's really important. Those long tails, the amazing sustained rates don't happen by accident. It really is an investment in Frontier to make content that delights our players and obviously, they spend their hard earned cash. The other thing I'd like to use this slide to sort of counter is that I hear questions about can Frontier release these games and the negate cannibalization. And I think if you look at the game -- 4 games in 5 years, which we show here, we believe that there isn't that much cannibalization. But even if there was, I mean the games are being cannibalized, and we're missing some of that data, the revenue that they're generating is absolutely, absolutely fine. Other point I'd like to make is do sequel sell. I'll be talking a lot about that with Planet Coaster 2 because it's a really clear question. But I think if you do a sequel correctly, it does sell. And again, I would illustrate Jurassic World Evolution 1 to Jurassic World Evolution 2. So I think there are the reasons. I'd say the final reason would be -- and Alex normally make this point is that this CMS genre is probably not appetizing for you electronic [indiscernible] Ubisoft, because we're looking at 5 million, 6 million unit sold and they're looking for 10 or 20 and it's probably out of the reach of the independent soon who will not bring that level of quality and that technical know-how to deliver games where there's lots of creativity. So I think we sit in a really nice layer where we're not threatened by the big boys or the indies. But I do think that our CMSs are successful for a reason, and that's why I want us to stick to it because I think the template is proven, it's a golden template. Alex, do you want to move to the next slide, please? And then this slide here may not be the greatest looking slide, apologies. But what it does is you actually puts our next 3 games on 1 slide, Planet Coaster 2 launching this autumn. Again, I'll talk a bit about that, but I'm very excited about it. We got this third Jurassic World game that we've announced, and then we've got that future CMS game, which is going to be tantalizingly still unannounced. But it really shows this visibility of our roadmap as we move forward, we have planned ahead and I think when we execute on these CMS games, we'll get back to where we were at our zenith 4 or 5 years ago. If you move to the next slide, Alex, I can start talking about some of the games in detail. Yes, Planet Coaster 2. So obviously, we're all very excited about this. We announced in July and what was quite interesting about the amount is that we have 5.7 million trailer views if you add all the aggregates together. You put this into -- I know it's an anecdotal evidence, but compared to our other big, big launches at the beginning of the year, the reception has been amazingly positive. We showed at Gamescom and again, this is anecdotal evidence but everybody who came through and did that 20 million demo. None of them bounced off it. They didn't leave 5 minutes into it, saying it's not the game for me. Every single one, and I mean every single one played it to the end. The next point I really want to make, but I think it's really important because I think it has to be true for Planet Coaster 2, and it has to be true for the next Jurassic game. For a true sequel, you can't keep the player. And the way I look at it, and I can't take all the credit for it because what I'm going to say is something that have been -- if you have read the book by Sid Meier, who made the civilization game. He coined this phrase the rule of thirds about making your sequel. And I think it is important to go through this because I think it really outlines our strategy as we move forward, how we're going to have that same success we have to Jurassic World Evolution 1 to Jurassic World Evolution 2. Rule of thirds. The first bid is familiar, keeping the essence of what players fell in love with also save a little bit of money because you've not thrown up the baby with the bathwater. But it's really important to make sure that game feels familiar to the players to advert what they want. The second one is innovation, second third, so you need to cross what's in there. So in the case of Planet Coaster 2, you really want to improve that customization. We want to have deeper management and we have -- want to have more ways to share and that's exactly what we're doing. And the third one is the standout feature, some of which can be grasped in one sentence and so for Planet Coaster 2, it's water park it all like [indiscernible] gameplay. Now interestingly, when we did announced, you would think that everybody would sort of look at the water park and say, well, that's amazing. And one of the things that we weren't concerned with, but the reason why I believe in this rule of thirds is that people were -- those are risks that people say, why isn't that expansion pack? Is that second, third, that innovation, looking at what the players want, getting that feedback in there, that better customization, better pass pauses, there's deeper management. I think that's what people certainly realize that this is a sequel and it's something that they really need to earn. But I do think -- and I know I've gone off piece here a little bit but I think it's really, really important that when you're doing a sequel, you don't seek the buyers. I'll get my soapbox and go the next slide, Alex.

Yes. Okay.

And so let me talk about traffic loading lesion. So this is our best-selling franchise to date. It's gross around about GBP 250 million. They have been really resonated with players. And what we want to do with third iteration of a Jurassic game is we want to leverage that brand awareness. I think what's really quite exciting is coming else in the same year as well as this film is coming out. So Universal now announced that's going to Jurassic World Rebirth and it's still scheduled for the 2nd of July. I believe that they're really going big on this. Again, this is not insider knowledge. It's just reading all the hype around it. The film director is Gareth Edwards, who did Rogue One, really well-renowned film director. The screen writer is David Cope, the person who wrote the original Jurassic World -- sorry, the original Jurassic Park with Michael Crichton and the leading actor is Scarlett Johansson. So I think they're going big. And we need to be part of that story. We need to really leverage the furor that's going to be around this film. And I think next year is going to be the year of Jurassic, and we want to be part of that. Again, I can't really say what features are going to be in, but we are definitely applying a rule of thirds. There's going to be the familiar lots of things we want to improve. And we think we've got 2 standout features which the players have been wanting. So if you went on Reddit, I'd be pretty sure that we will be capturing exactly what they want the next iteration of the game to be. So again, very exciting for this, again, I'd say, to do another Jurassic game is a privilege, and we need to work very hard to make sure it's as successful as the first 2. Final slide, do you want to do the first part?

Yes. I'll do the first bit, and you can then wrap up. So I think we called out in the RNS. We've had an encouraging start to this financial year particularly with the CMS games delivering across June, July and August. We have a clear plan. As Johnny has articulated, very CMS focused and we've got a sustainable cost base while having taken those actions in the second half. So analyst consensus, as we've added out before these results was about GBP 88 million for this year and very comfortable with that level of revenue. What we want to do is get back over GBP 100 million again, but I think it's sensible to be cautious for right now. And the other statement there in the RNS on the outlook is we are confident of delivering profit in this financial year, and that's both on an adjusted EBITDA and on an IFRS basis. So we will get there. Johnny?

Yes, yes. We are absolutely right to be cautious. But I do believe that this is our strongest ever pipeline. CMS games, I do believe we know how to make. And I do believe with our track record, we really do know how to engage with the players. It starts with Planet Coaster 2, which is going to be releasing this autumn. It's very important, and the signs are very positive. During the Jurassic World game, based around when the film in the window where the film will be present, I think, is very, very important. And the final CMS game, I know we haven't announced it and people are very curious about it, but it's in development, it's in full preproduction. And again, I think I'm very excited for that game. So yes, I want to just finish that. I do believe it's our strongest ever pipeline, and we've managed to manipulate the business to set these really strong foundations and it's all about execution for the next few years.

Great. Thanks, Johnny. Okay. We're going to open up to questions now. So I'm going to stop sharing and then we'll pop back into the slides as we need to, where they help to answer a question.

So having a look at the hands up, Caspar, I think you're first.

Yes, just a couple for me quickly. First, I think in the statement, you mentioned a 96% sustained rate on Planet Coaster, which is already very impressive given 0 new content added for that franchise. What are the sort of aggregate sustained rates across the CMS games inclusive of Planet Zoo's successful porting across the Console. And then secondly, Planet Coaster, I know the 6.2 million unit sales. What percentage of penetration do you see or Planet Coaster 2 of that base? And also, do you think that's the right way to think about it? That would be great.

Okay. Shall I take the first one on sustained rates then. So just to explain what we mean by sustained rate, we're talking about the revenue versus the preceding year. So if revenue has gone down 10%, let's say, we'd quote a sustained rate of 90%. So Caspar asked about the CMS numbers there. So I mentioned already, Planet Zoo actually grew overall because of the launch on Console. If you just look at PC, it was almost 90% sustained. Planet Coaster, as we talked about already, it was 96%. So across the portfolio there of CMS games, it averaged out about 90%, but that did include Console. If we take Console out it was about 80%. So a very strong level of sales, particularly with such a meaningful number to start with for both Jurassic World Evolution 2 and Planet Zoo. And then the second question was about the Planet Coaster units and the...

I'll take a little bit of that. Yes. Caspar, I do think it's the right way of looking at it, GBP 6.2 million on PC. Our aim, our goal is to surpass that, again, we need to be very cautious about what we say. Again, it's all about really managing expectations. But a few things which I'd probably point out and it goes back to Alex's Slide 5, that cumulative cash is we want to be closer to that green line of Planet Zoo. And how we're going to do that, again, within a simultaneous launch on PC and Console, we're going to have probably not announced, probably -- I would suspect we're going to be doing a deluxe pack. We're going to be -- again, I think we'll be following the same monetization strategy of our cadence of PDLCs, which we increase the frequency on Planet Zoo. So that's where we want to be. Obviously, in models, I think we need to be quite prudent but that's our expectation. Again, maybe slight counter to that is that the market may be slightly more congested, maybe money is a little bit tighter. There is that COVID bubble. But we want to really surpass what we've done on Climate Coastal on over time. So I think that's our expectation. Alex, I don't know if you want to add to that?

I think that's a good answer. Yes. Move on to the next one. Thanks, Caspar James.

A couple of questions for me, please. Just on the commercial events, the sales events that you did this year, not the sale of the publishing rights, but the sales. What were the biggest learnings you got from those during the year? Was it sort of the strength of relationship with Steam? Was it the use of data and was it the reception of PC1 read to PC2 going forward? And how will you ensure that you either meet or beat those commercial successes during '25? And...

Sorry. Go on.

So on Planet Zoo, obviously nice to see that it's now the highest cash generative game out there. But I guess the 2 things out, what does that tell you about the demand for CMS on Console specifically? Because obviously, with PCT, you're launching them both launching it, but at the same time, what that big our strategy going forward? How should we think about that? And then I guess, finally, just on the longevity of that game. Given your point around animals, there's always those ones that has your view of the longevity of Planet Zoo changed over the past couple of years?

Talk to the first one [indiscernible].

Sure. I'll take the first one. Just to repeat the question there. It was around but what the learnings on price promotions. Certainly a big one is the importance of featuring seeing on the top of the Steam website in the Carousel is incredibly valuable. So whilst I think the seasonal sales are always going to be important. There can be a bit of a feeding frenzy. So many games on sale. So that's why I think Johnny already mentioned that the April publisher sale that we had on Steam was our second best ever, only surpassed by Christmas 2020, which, of course, benefited from COVID. So the benefit we get when we are in a maybe a smaller sale or something specific to us with all that featuring on top of Carousel activity is really very valuable. So we'll always continue to participate in all the promotions. But what's encouraging about the CMS road map is that our partners, both Steam and Microsoft and PlayStation, obviously, very excited. Johnny has already said, there's not many companies that make these kind of games. They're quite different to a lot of the shooters or the RPG games that are out there. So that means, first of all, great potential for extra featuring and extra support the other thing that we certainly don't want to price into numbers, but we think is a real potential upside is subscription deals. They were valuable for us, last year and always will be. But the CMS portfolio, I think, is quite special in terms of its unique position to reach a lot of different people, and particularly the slightly more family-friendly audience. So I think subscription deal wise, I think we're well set. Next question, I think, was about Planet Zoo and the cash generation and Console split. So should I take that one, Johnny? And maybe you do...

Yes, I might do a little addendum too, but if you...

P Sure. Yes. So it's always difficult to assess the overall audience when we have a split launch for both the planet games. We obviously want PC and then Console later. If we look at Jurassic, actually, it's slightly weighted towards Console, which is pretty unusual, particularly for what you would describe as a management game to have more units sold on Console is quite unusual. I think the IP probably lends itself to being very accessible for people and maybe a bit more weighting towards the U.S. as well, which probably pushes it towards console. So we do think that the planet games will always be a bigger share on PC, I think a reasonable rule of thumb might be sort of 60-40 or maybe even 2/3, 1/3. And obviously, we're going to be finding out what that looks like very shortly with Planet Coaster 2. But as ever, each time we launch a new CMS a lot of effort goes into the onboarding for the player, making it as easy as possible. So an engaging way of teaching people, not forcing them to do a tutorial that feels like a tutorial but generally leading their hand through the game. So Planet Coaster -- even I manage to play Planet Coaster 2 at Gamescom, although Johnny was very disparaging about my park.

Constructive criticism.

Constructive criticism. It's very easy to get into. And I think that will lend itself well to Consoles. And as already mentioned, the subscription point that could open up Consoles even further. Johnny, do you want to finish up on that?

Yes, I just wanted to make one point. I can't believe I keep referring back to your cumulative cash flow chart is if you look at the tick up on Planet Zoo when we launched Console, it is very similar to what we were sort of talking about in previous sort of presentations that it would be similar to that of Planet Coaster. What I really like about our CMS games is the predictability. We have the data so that we can use that data in our forecasting. I think that's just really important since that's just one minor point. I think Alex's point, is probably stronger. But again, I just wanted to just highlight that. Maybe if I move on to the next question after that. So the next question was about sort of longevity of Planet Zoo and why are we doing more of these PDLCs. Again, it's a great question and we're always measuring. So this is all about franchise management. So at the moment, again, I'm going to talk about this predictability just return on the investment. Every time we launch a Zoo PDLC, the players really engage with it, they cry out for more they give us ideas for the next one and they spend the money on it. So this is just a really good business model. And as you can see on that green line, why that sustained rate is so very, very strong. There will come a time when maybe that attach does lower, and we need to look at what we're going to do to put that franchise in the future. A great example, which we maybe got wrong was Planet Coaster. Perhaps Planet Coaster, we should continue doing PDLC for a little bit longer then start and then obviously, we're going to be doing Planet Coaster 2. So it's all about -- I think we extend the life cycle of our games. So that's what we have learned. But there is a time where you need to move on to the next project. And again, another example would be Jurassic World Evolution 1 to Jurassic World Evolution 2. But isn't it great to have people wanting more content for your game. That's the holy grail, and this is where I think our CMS games deliver. And it's just so nice to give players what they want. And that virtuous circle that they then give us some money for it. We can keep that to only going. So yes, that's what I think what Planet Zoo is showing us with PDLC.

Patrick.

A couple of questions from me. Any comment on preorders on Planet Coaster 2. Secondly, I suppose with the [indiscernible] Switch, what angles are there on JW3, Planet Coaster 2 and [indiscernible] 40 for that Console? And lastly, when you look at Planet Coaster 2 relative's to when you launched back in 2016, what are you seeing different in terms of peers saying about the game, is it more positive and less positive in terms of the amount of time players are engaging with the title. I know you've mentioned that the stats around players appreciate, but just be curious relative to what you saw pre the launch of Planet Coaster 1 as well. And any comments on the Console end of it, what players are saying in terms of the beta testing on that?

Okay, quite a few questions. I think I heard most of them. I think your first question was about VR for Planet Coaster 2. Is that what you heard, Johnny?

Unfortunately, Patrick, you were cutting out on it. So I've got every other word. I'm just trying to join together.

I think Patrick asked about whether we're supporting VR on Planet Coaster 2?

Sorry, it was -- no, [Technical Difficulty].

Sorry, Patrick, we're not getting too much of that but I definitely heard the question about Switch. So Jurassic World Evolution 3 and Planet Coaster 2 to whether there's some potential there for Switch. Clearly, we just launched F1 on Switch overall, slightly disappointed in terms of the performance there and the engagement. I think Switch is probably quite a challenging platform because first-party Nintendo games do very well. There isn't always so much support for other games. So we are pleased with the overall performance of Jurassic World Evolution 1 on Switch. But I think it's likely that for the third Jurassic game, we'll be focusing on PC, Xbox and PlayStation. Then Johnny, there was a question about Planet Coaster 2 versus Planet Coaster 1 and how people are engaging, I think, maybe with launch content videos and assets and so on. I know you've been encouraged by what you've seen from the reaction from the community there.

Yes, I've been very, very encouraged. Again, just people -- response to the announced trailer was really strong. Games come. We are doing quite a lot behind closed doors, which will be -- we're going to be releasing that content when we actually announce when preorders are, which we're not ready to announce yet. So I'm getting information from that. I think people -- one of the things which -- again, this is a strange -- I'm going to do a strange anecdotal piece here because I do think it's important is feedback, and this was going along last night, we were doing many interviews is people are being openly positive about it. So not only when you present to Game Crest, they play their cards close to the chest. I think people are looking at Planet Coaster and smiling. We have nailed the features that they want, the things we wanted to be improved, and they are just loving the joy at the water parks. So this is not comparable data. This is all anecdotal, but the vibe is good. And the vibe, you got to be honest, is better than Realms of Ruin, better than the Formula 1, which was -- yes, people were enjoying it, but this seems to be more universal. I think Alex made a really good point about the approachability of the game as well. When your CFO can build a park, you're doing something good. So yes, I am very encouraged that I'm enjoying playing it as well, which is not a bad thing.

Yes. I think we'll move on, and we might come back to you, Patrick, if the connection improves. So we move to Will.

Just a couple from me. Firstly, is there anything different that you're doing in the marketing strategy with Planet Coaster 2? And I guess to that point, when can we expect marketing to ramp? And actually, how much are you looking specifically to spend on that? And I guess coming back to your point there, Johnny, about Planet Coaster 1, Planet Coaster 2, have you done any analysis of sort of wish list or follower numbers of sequels and sort of, I guess, could you frame that in the context of where we are for Planet Coaster 2? And then secondly, what can we think about gross R&D for FY '25?

Okay? So I think the first one was about marketing strategy for Planet Coaster 2. Johnny, do you want take that one? I know we had quite an interesting Twitch video campaign, didn't we?

Yes. Again, I think this illustrates one of the things I said very early on is when we were doing this organizational review. The challenge are set to one is how do we do more with less. And I think publishing have definitely stepped up to the plate. What we want to do is shorter, sharper and owner narrative. So rather than spending or investing lots of money to be on various sort of the opening show of Gamescom, we want to have our own narrative and really pushed out. So as Alex said, the announced support was very clever and that worked very well. We're going to go big on this preorder. So again, this is what we've been working on at the moment. So we're going to obviously have preorder trailer. We're going to have lots of content from various magazines. Again, they've come in and we're going to have some front covers. We're doing a lot of work with evangelists going to drop at the same time. Again, a big bang to start up these preorders. And then we go to launch, there'll be another big bang there. I think deal advantage that we have is that we're leveraging this brand awareness. We have people following this game. I see some people following it all the way back in the day from RollerCoaster Tycoon 3. It's such a head start compared to starting a new brand with Formula 1 and with Realms of Ruin. So yes, more or less and there are going to be some big bang on this. So far, we're very, very pleased with the coverage that we're getting.

Yes. So I don't want to hint too much, but you can imagine that in the next -- maybe even in the next few days, the ramp-up might start with maybe preorders. So we've -- as we've already hinted out with the autumn launch, if you look at when we've gone with games before, that early November period is typical for us. So it's not hard to guess where we might be going with that. Then you asked about the spend on marketing. So likely that the launch marketing is probably somewhere over GBP 2 million to support Planet Coaster 2. We already spent some of that clearly with these Gamescom. But as Johnny said, it's very much more angling on the digital side. And you'll see that ramp-up start in earnest pretty soon. Wishlist data, there's a question on that. Always a bit of a dangerous one because wishlists were actually pretty strong for Realms of Ruin, so they're not always a great indicator. But I think we're encouraged so far when we look at wishlist versus Planet Zoo, for instance, it does look encouraging, but the real data starts to come in from preorders, but ultimately, it's the actual launch of the game. That's a critical thing. Johnny, I don't know whether you've got anything else to mention on that one.

Yes. Again, obviously we monitor the wishlist. I think not trying to give any excuses. One of the challenges is that we are comparing apples and oranges because with Planet Coaster 1 we had alpha -- various alpha builds, Planet Zoo, we had preorders. But again, when I was looking around about game -- well, looking all the time, but get Gamescom, we were definitely ahead with the Planet Coaster 2 on Planet Zoo, which again was very encouraging, by a good percentage as well. But Alex is right. It's all about people passing with the hard-earned cash don't want to be seduced by wishlist really.

Katie.

Regarding Planet Coaster 2, did that start out as downloadable content that just grew and eventually became too big, so it became a sequel. And kind of what's that tipping point and thinking about other games in the portfolio like Planet Zoo. Is the scope then to get sequels or -- but just kind of thinking around the balance between content and sequels. And then the second one is just on how far can you push the Jurassic World franchise? How reliant are you on future film releases? Or actually, does this kind of tail off and it provides a blueprint for potential other license IPs?

Yes. Good question. Do you want to take that, Alex?

Yes, happy too.

So Planet Coaster 2, it didn't grow out of PDLC. We knew that water parks would be very, very big, a really big investment both from a technological point of view and from just a game point of view. Again, the inspiration comes or not, people think I'm a genius when it comes to Planet Coaster games and roller coaster games. I just did what Walter Disney did. He added water parks to Disneyland and the rest is history. So it was really a fundamental change to build the things that we wanted to build on it. There's lots of systems underneath which have been changed. One of the big things which, again, players are actually reacting really well to as a new pathing system. And if you go in any of the forms, the 2 biggest criticisms of Planet Coaster was performance, which, again, that's the whole assay in itself, if players can put infinite objects down, it is going to slow down, I guess. And the other one was pathing. And so what we've done is we've revolutionized that, tied into the pool system, so you can now have plazas, so your theme parks are just going to look amazingly creative. So that's how we think about all our games. It's making sure it's rule of thirds. So third is the familiar. It doesn't mean necessarily it's 100% the same code. The other 1/3 is innovating these features that people really want, and that's the meat of the game and then finding out what this real killer feature is or killer features. And yes, that's how Planet Coaster 2 was created. Second question was -- can you...

It is about Jurassic and how reliant are we on films. Clearly, where you're paying for IP. And it's a film IP, having an IP event like a film launch is really very helpful, and that was the plan with all 3 games, right? I mean the second game because of COVID, the movie ended up getting pushed out a whole year. And so we needed to change plans. We went for that double bounce strategy with the launch then following up the film content, which actually was very successful in the end. But clearly, ideally is you go much closer to the movie and get the benefits for that. So that's not to say that in the future, we wouldn't consider doing another Jurassic game that maybe fell between films or something, but ideal if we can get that movie time.

Yes. I think just to add a little bit, quite interestingly, when we work with Universal, they think of it as its own franchise. There's actually now a franchise of it in Universal, Jurassic World Evolution games and certainly have their own characters. And I think we're pretty smart in the way you manage to tie it back into films or film content, which is launched at a later date, all fields soft cannon but I do think the game is standing on its feet now. I think we have really got amazing sort of brand awareness, and we're just bringing new Jurassic experiences to players. So yes, it's been a really interesting sort of journey working on that game. And the evidence is that players really, really like it, and it's done very well for us.

Let's go to Jasmine.

I guess this kind of follows on slightly from Katie's question, but obviously, you've outlined the CMS refocus and you put a lot about how successful those games are. But the first 2 installments for '25, 26 'are titles and franchises where you have an existing audience, which helps to kind of derisk that process to a degree. So if we're thinking further ahead, what are the processes you have in place around thinking of either new internal own IP that's developed kind of created by your own teams or also new license deals and kind of also thinking on the lines of the Formula 1 and Warhammer partnerships were slightly less successful than what you see with Jurassic World. And if we're thinking about future projects, are there any learnings or any kind of particular guardrails that you're going to put around these projects?

So I think Jasmine was very generously saying that Realms of Ruin and F1 maybe slightly below Jurassic levels, clearly, Jurassic games have been incredibly successful and those other titles, particularly Realms of Ruin has fallen short. I don't think you can blame the IP necessarily too much, maybe some element of that, I suppose, with the IP within Warhammer, the Age of Sigmar IP. But overall, I think it's making the right decision and knowing the audience and clearly with the CMS games. We're very good at that. I think that -- we don't want to say too much about FY '27. I don't know whether you've been sneaky with your question to try and trap us into revealing what it is. But clearly, we already know, and we're developing that game. It is something which aligns well with an area we think we'll be successful with. We're not confirming whether it's kind of license or whether it's own IP. So Johnny, I don't know whether you want to say any more, but obviously be careful.

I'm not understanding more about the third one. I've already had my knuckles wrapped on that. Those are really interesting points about sequels. And this is actually a conversation that we have internally. I think sequels can be amazing. You look at films, the Star Wars, Trilogies, Lord of the Rings, you look at games where Sid Meier is going to be releasing in Civilization 7 and the amount of furor that's guessing is amazing. If you do the sequel well, you're extending that experience, that world that players just spend their life playing. So I think it is -- I just don't want to belittle them. I actually want to celebrate and champion and providing you invest correctly in them. And if you get it right, it does derisk. If you get it wrong, it probably does -- it could add risk as how many Eddie Murphy movies have not been successful the second time around actually. Yes, a few. That's not the point I'm trying to make. Positive. So again, I'm just don't want to belittle sequels. What I will say is that our selection process is so much more rigorous now. Again, the reasons why Formula 1 and Realms of Ruin didn't -- are not the same success as our Planet games is that there are certain things we just didn't understand. I still think from an engineering point of view, we executed on them pretty well. It's just the market wasn't there, the intersection between Formula 1 sort of fans and people like really technical games was small. And we just -- we captured a lot of them, but the market wasn't big enough. So what I would say is the next game and the game after that because we're in a greenlight process for the one for our fourth game, we are really doing a lot of measuring and part of that is understanding what a Frontier game is. Again, we want these games to have long tails. We want to be able to launch paid downloadable content. We want them to have like a core set of evangelists. The subject matter has to match the game. The game needs to be intelligent. And all these things then need to go into the calculation and see if the addressable audience is there. So I know it sounds like I'm waffling along, but it's trying to give some confidence that we're taking our selections more seriously because we just can't do things on intuition and comparative analysis, F1, we were saying, well, if it's the same as Football Manager, then it's going to be a growing franchise. And it's a very compelling hypothesis, but the data there just didn't convert into theory. So being a lot more strict about how we're choosing things. I do think the game that we have coming up in FY '27 fits up. And we're going to make sure that the one coming out the year after that or whenever that will be, is this going to fit that to.

Any more questions? I appreciate we've taken a bit more time having started a bit late, but anyone else want to pop up with a final question? So thank you all for your time on the call. Much appreciated. Thanks for your questions. I'm sure we'll see some of you maybe on the roadshow in the next few days. But if anyone has any follow-ups, just reach out to me directly, and we can deal with those. Thanks for your time.

Yes. Thank you, everyone.