Premium video games developer Team17 (TM17&:AIM) continues to ride the wave of home gaming even as lockdown measures ease. Increased time to play socially distant, internet connected games was flagged in a trading update ahead of six month results to 30 June.
Shares in Team17 pushed 2.7% higher to 530p.
In particular, franchise titles such as Worms, Overcooked and Escapists, plus new 2019 titles Hell Let Loose, Moving Out and Golf with Your Friends, enhanced earnings. The latter two titles were released in April and May. On 11 June Main Assembly was launched into early access on the Steam platform.
The transition to home working in lockdown was made easier because over 90% of sales are already made through digital channels. It also helps that most third-party developers are small operations easily able to work from home.
RECORD GAMES
The company has more games in late stage discussion that at any other time in its history while it confirmed signing seven additional games in the first-half for release in future years. This includes first-time partners in Mexico and Russia.
Management said the unusual level of gaming activity seen during lockdown is starting to return to more normal levels, and alongside the prospect of next generation consoles and new game launches in the second-half, creates ‘a more unpredictable backdrop.’
Accordingly, the board believes it is too early to assess the full effect that strong recent trading will have on full-year results.
Analysts at Shore Capital adopted a cautious tone, saying ‘we continue to like the vast low cost portfolio and huge digital presence. However, we believe this remains an area with a lot of competition and low barriers to entry, due to improved technology becoming more accessible.’
