Episode Transcript
Neil: Ladies and gentlemen, welcome to be inspired from the London Stock Exchange. My name is Neal Shah, and I have coverage of the tech sector. We love video games at the exchange, as do many of our investors. And we had to come here and interview President and founder of Frontier Developments. David Braben OBE. David, thanks very much for having us.
David: Thank you very much for coming to Frontier. It's an honour to have you here.
Neil: You founded this company in 1994, but I know you've been in the sector for a long time. Tell us a little bit about what you're doing here?
David: I'm a huge fan of games and always have been, and I was lucky enough to start writing games while still at university with a friend Ian Bell. And we made a game called Elite, which is possibly the first ever 3D game. And we've just gone from strength to strength from that. Forming Frontier, as you say, in 94, and then growing gradually from a farmhouse in Cambridge to the over 800 people now we've got on the Science Park here in Cambridge. Making games, you've probably heard of some of them and got some lovely things behind me. Planet Coaster, Planet Zoo, Elite Dangerous, of course and now Formula One manager and the Jurassic World Games. You know, so wonderful range of things to be proud of. And by all the wonderful people here at Frontier that I get to take credit for.
Neil: And I'm sure there's many serious gamers out there who would have played your first version of Elite. You wrote that in 1994, if I'm not mistaken?
David: Yes. Well, I sort of think we started it in 82 and it was released in 84 on the BBC Micro, which these days is seen as amazingly retro, but was the lead sort of, you know, the top notch computer at the day and newsrooms all round, like BBC, were all filled with BBC Micros.
Neil: I haven't met many developers who have created games for the BBC platform Atari, Nintendo, Sony, Microsoft. Do you think that's the first?
David: I think that we've we're a very big industry. We're probably the biggest component of the entertainment space. There are lots of people who have written for all those platforms, including lots of people here. So I don't think it's at all unique, but it's great and it's been fantastic to be there pretty well from the start of the industry because, you know, in in the early eighties, it was very much I mean, people talk about back bedrooms often. It was literally back bedrooms, you know, and people stuffing jiffy bags with cassettes. And, you know, the world has changed so much now from those days.
Neil: I'm sure you've touched so many people. I was talking to Dan, our producer, he mentioned that one of his editors had grown up playing Elite. Speaking to Kay Lawson and Neil Patel in the city, as well as Charles Cotton, and they all told me that you were a bit of a celebrity, David. They would go to conferences with you and there'll be a queue of gamers waiting to get your autograph.
David: You're very, very kind. I feel I've also there's a lot of luck in this sort of thing, you know, right place, right time. But I do feel very lucky to have had the opportunities I've had and the career I've had and to work with so many great people here at Frontier, including people like Jonny Watts and James Dixon who has just joined the board with Jonny Watts, who's now CEO who has been here 24 years.
Neil: You didn't raise any money before you went public. This was a bootstrap business that's quite rare. And when you IPO'd it back in 2014, you only raised £4 million. Tell us about that journey.
David: Okay. So it was an organic, based on work that was, had already been done, sort of folded into the business because I was working with people sort of freelance before then, before founding Frontier in 94, and the business grew from that. The great thing with the games business even then, where we're making I mean it was it's called perhaps wrongly 'work for hire', but we were specking out the games, delivering the games, but then being published by big publishers, you know, the likes of Microsoft, Sony, Atari, publishing the games. And they make actually they make the biggest chunk of the profit but nevertheless, Frontier was profitable. So that's how we were able to grow organically and invest with more and more people and grow to more and more projects. So very, very lucky. And then in the summer of 2013, when we floated, you know, that we didn't actually particularly raise money for the company. It didn't it was more for going forward because actually we had at that point, the Elite Dangerous game had just come out and it was the crowdfunding and all that sort of thing. But what it enabled us to do, that money we raised was to bring forward some of our plans. So Planet Coaster, which did very well for us as well. And I think also in those days the city was very sceptical of games. I think it was seen as boom & bust. I think, you know, one of the things that wasn't quite yet apparent then was, you know, with the rise of the Internet and the idea of games that could be successful over many years, you know that there's another model which I think offers a sort of fire and forget model where you release a game, put the disk out there and then work on something completely different. And it either sinks or swims in the market. Whereas what we do, what we've done with each of our games is develop, launch and nurture type plans. So we develop a game, we launch it, but then we continue to nurture it, we support it, we listen to the fans. You know, amazingly, people when they see a game, when they're getting really, people get angry about games as well as positive towards them. But that means they care. So we listen to them and we try to make the games as good as we can. And so you see that games like Elite Dangerous have been out for coming up for ten years now. We've got Planet Coaster came out in 2016. You know, we've got a lot of our games are still going strong. Planet Coaster is still at the same retail price when we launched in 2016. You don't see that in many, many markets and we do blip the price during Thanksgiving or Christmas. But the point is the retail price is still the same. And so I'm really proud that how we've managed to support those games and build wonderful communities around each game, because the key thing is the game is its community. They support the game and we support the community.
Neil: And how do you decide which genre to develop a game in?
David: Well, obviously there are lots of people make lots of suggestions to us, but what we try to do is stack rank the opportunities and look at them that make the most sense for us, where there's a good community we can sort of enter. And what we've been looking at is what you might call adjacent genres, where we've got expertise nearby. You know, if you look at some of our games, we've done well. Obviously we've got historic experience with Elite Dangerous, but also Planet Coaster and Planet Zoo. We did one of our most successful games pre float was a game called Roller Coaster Tycoon 3 and it's a logical looking at that. So we knew Coasters really well. We knew the market really well. The pretty well the last or the last big title we did for Microsoft was again called Zoo Tycoon. So we all also know that knew the zoo space very well. And quite often when you're working with external people, you see something say, Oh, we could do it much better if we do it this completely different way. And so, you know, you build the expertise in the team over the time. I mean, a lot of the people working on those games worked historically on the earlier games when we were in the work for hire model. So what we do is we look very carefully. We have to understand it very well. But also, you know, all our games have simulation at their heart and we've got to make them authentic and that sort of thing. So it's capturing that, that feeling, that spirit, that love in the games is what's very important. The players can see that. And the other thing is we are players, we are gamers, we see it and we can always be really better if we do. So why don't we do that? Why don't we put that in and that I think that's the sort of thing. And, you know, I've always thought if you don't love what you do, it won't be as good as if you do love it.
Neil: It's great saying and I think about some your domain expertise there in zoo that's probably explains why Jurassic World evolution was so successful as well. I mean, you've done Kinetics, but Planet Zoo, Jurassic Evolution, was that your bestselling title or has something topped that?
David: I think Jurassic World Evolution is still our best selling, but the others are all pretty good, you know it's actually a and many all of the games actually have been performing very well, you know. So but I think you're right, that probably is the top one. So I was just hesitating thinking any before we floated all of those high. But they're all they're all really good in numbers. So I think it's probably Jurassic's the top one..
Neil: What was it like being the CEO of a public company? You're a fantastically creative person. David you've created some amazing games was some of that creativity curtailed by life on the public markets? Is there anything that you would have liked to have done differently?
David: Not at all. I mean, firstly, it's a huge creative team have made those games. You know, it's not just me. In fact, I'm only a small cog in a giant machine. And that's that's the great thing about having a company, the firepower it brings of what we can do. And, you know, looking at every different aspect of these games, someone cares about that aspect and has made it the way it is. But in terms of being CEO of firstly of the private company, the being a private company isn't so much the issue. It's more we have a number of big customers and we become very dependent because it's low margin business on all of that. You can't schedule quite so far ahead, whereas the big change was because we were going straight to customers and that flotation essentially enabled that. And what that meant is we could plan months, years ahead in terms of how we were supporting things, what we were doing, what the teams would be working on, giving forward visibility. So I think that was the biggest change for me, and not having to worry about cash flow in quite the same way as you do certainly in those early sort of the early decade of the company, you're forever. I was forever thinking, oh, where where's the payroll coming from if we don't get this deal type of thing? Whereas when we floated, we're looking much more strategically. You know, we've got we've got a lot of cash in the bank, which is always a good position to be in because you just don't then have to worry about that. We're thinking, well, would it be better to do this or that? How how is that going to look five years from now? You know, how will we grow? Where will the company be? And all of those that sort of thing is what's really important. But to say, what would I have done differently? I think I and the team here have much more experience now than compared to when we floated. You know, and and if you look at the performance curves of our games, for example, you compare Planet Coaster with Planet Zoo where you know, similar style of game both PC only for the first sort of five or six years. Or obviously Planet Zoo hasn't run that long, but you know what I mean, it started off PC only and the point is we have a lot of understanding of that, but we've learnt so each time we do an update pack, you know that initially we started doing them quarterly, but then very quickly we realised actually if you do them before a selling period. So we've learnt a lot about the process, about the market, I've learnt a lot working with, with shareholders and investors and you know, hopefully we're very visible, very supportive. But with all of those things, if i'd have had that knowledge at the start, we'd have done much better, but that's true in life, you know. So I think I'm very lucky the way things have worked. We've had a supportive shareholder base, we've got a fantastic team here. So I don't think I'd change a huge amount other than to be able to teleport back with all that knowledge.
Neil: If I could do that as well that would be fantastic...
David: Exactly!
Neil: David, you recently stepped up from CEO to President and Founder. Tell us a little bit about that decision and why you decided to pass the baton to Jonny Watts and why now is the best time?
David: Well, firstly, Jonny Watts is a great guy. He's been at the company for over 24 years. He's been integral to so many of our games. And, you know, it's what we've been looking at is how we grow the company to the next stage. You know, lots of things from a board point of view need dealing with the more projects you have, and the more opportunities that come up frankly. And having the delightfully ill defined President and Founder role means that it's very practical to fit those in with the normal workings of the company. And as those have come up in the past, it's been great. Actually Jonny has done a lot of the day to day CEO things already, has been doing it before we sort of acknowledged that role. I mean, we have a very collaborative, very supportive board and so with there's already been a lot of sort of sharing of roles. So and it's worked very well. So this it seems like a natural step, you know, to give us that ability to bring more, more firepower to the board, more, more things we can do to look strategically as we grow to that next stage. You look at the entertainment business and you look back five or ten years how completely different it was. And if you look forward five or ten years, it's going to be it's not an unreasonable assumption to say it's going to continue to change and be different, you know, looking at the rise of streaming and all that sort of thing, you know, looking back ten years, you wouldn't have named half of the companies that are now the top ten entertainment companies, Amazon, Netflix, but actually a lot of others. And I think that's going to be true in the future. And you look at the migration of screen time from non-interactive to interactive to games essentially, which is great and actually is anything it's probably been accelerated by COVID and we've got lots of evidence just that's very sticky, as we say, you know, once people start sort of socialising in games, which is what it's all about, you know, where when when I was a kid, you probably socialised in the pub or in the bar, whereas now people socialise in games and....
Neil: I see it with my children, David I've got a ten year old and a six year old they are playing Fortnite. They're speaking to their mates. I mean it's what's kept them sane throughout lockdown.
David: And if most of the talk isn't about the game, right, you know, it's about their girlfriends, boyfriends or whatever, you know. And it's to me that is just like the pub in the same way, almost very little of the conversation is going to be about the beer, it's going to be about what's happening in the world and what politicians have done and to, you know. And so I think it's that change the people socialising. I mean, you see it like in the US where you've got various diaspora that are distributed around the country, but they keep in touch via well originally social media, but social media within a game provides a venue. You know, games now are venues for people to go and socialise and they can dip in, dip out chats. They don't necessarily even need to participate much in the game. And it's that sort of thing, that sort of change. Now this presents a raft of opportunities for companies like us to continue being disruptive. It's not being disruptive just because there are opportunities and change, change is a good thing in many ways. You know you look at we've mentioned the rise of streaming services, but all of these things, you know, I remember hearing that more people voted in the UK and the general interest in Big Brother than in the general election. To me, I thought that was terrible, even as a as a gamer. But it just shows that desire to interact, to be listened to, you know, people care. And what we find with our communities, people really care. They want to have heard have their voice heard. So whether it's forums, whether it's chat rooms and all that sort of thing. And I think that that sort of kind of online socialising is is a real positive. And games are an obvious venue for that.
Neil: And I've been really impressed by what you've built so far. You have been able to promote people like Jonny from within is a sign of a good company, but also not needing to follow the herd and rush into mobile. You know, you've been pretty successful on PC, on consoles. Do you see any of that changing?
David: No. Well, we see continuous change. That's why I'm hesitating to say no to change. But we've never we never looked at mobile as a platform. We always looked at it as a play style. Because what mobile means to me is a five minute play session where the context of the game is immediately apparent. You go, I know I do that, do that, there. Oh, do that. Oh, excellent. Yeah. And it's designed to put down very easily. So you don't need to remember that he hates her, she stabbed him in the back, but he doesn't know yet. You know, all of those sort of things. The context is what I mean, right? So our games, we make cinematic experiences where we expect a typical play session to be at least 20 minutes, half an hour. I'm not saying you can't play it shorter than that, but that's where you get the best sort of juice out of it, if you know what I mean. And that is as a skill. It's much more like the box set TV or film than it is, say, a Tom and Jerry cartoon. And I'm not, both of them are wonderful pieces of art, but our skill set is in the cinematic experiences. Now some of our games are on mobile, but to me they're not natural mobile games. I mean, I see our kids sometimes playing games on mobile platforms, but they're often plugged into the wall and sometimes seeing it on the big screen, you know? And that to me isn't a mobile game because literally, you know, mobile means the networks going in and out, you might be on a train, you might have so much distraction. So with that, it's would you expect the big film directors to start making 5 minutes experiences on tick tock or whatever? You know maybe, but that means that that's a different skill set. And I think similarly, you know, looking at, you know, we've been, we carefully look at new opportunities, things like streaming services coming up and, you know, how much we, we support them or not, it depends on what we whether we believe, how well how successful they're going to be. So that's very important. I think we'll see these opportunities continue to come up and we will see the business model continuing to change. But actually, the last five years or so has probably been the most stable it's been. That seems bizarre, because most of the changes have been in audience, but not so much how you make the games. And that stability has been great because it means we can we can raise our game and we can look at what the opportunities are for the future, you know, because there are so many big, very, very powerful, very interesting, really great companies out there that we can work with people like like Universal, like Formula One, where together we can make something that's truly excellent, you know, I'm really proud. F1 manager for example beautiful game but actually it's, it's, it reaches new audiences that way and we help build things. It's a really good position to be in and hopefully they will be they're pleased as well, you know. And so with all of these things, we're making the experience for the player, for the viewer better by doing this. And so the opportunities for the future are obviously endless. So what we try and do is look at the ones that are the best fit for us.
Neil: What advice would you give to other entrepreneurs out there? We had 40 people in our offices last week for industry drinks, some really talented folks from other developers, other publishers. The UK is not short of talent in this sector. What advice would you extend to them as they're building their businesses?
David: I would say follow your dream. Whatever it is that you end up wanting to do, you're going to be spending a big chunk of your life doing it. So make sure it's something that you really enjoy because I think you will then put your best foot forward. The end result will be better, you will love it and you won't resent spending long hours trying to finesse it or trying to get that, you know, that that extra 1% that you know, you can do in your heart of hearts. And if the whole team who are working on it is very rare, it's just one person doing it. gel together and get on well together, then you're set up for success. Now, I'm lucky enough outside work to be a member of a group called Cambridge Angels. So we see a lot of Start-Up companies coming through and you can see the ones that are going to work well because they gel as a team. And when you see people not gelling, you go umm that's interesting. You know because that will that will be multiplied multiple fold down the line when, because to be honest when things are going well it's easy. But there are always going to be challenges with a new company, things that you thought of but didn't realise how serious it would be or partner, you know all of those things. So I would say, follow your dream, do something you really love and that you will be proud of. Think of yourself in 40 years time looking back. Would you say, I'm proud I did that? And you and you're telling your children, your grandchildren or whatever.
Neil: Great advice.
David: Thank you.
Neil: You're a busy man. We're big fans of Cambridge Angels and everything that Simon Forbes is doing. Tell us what else you're up to in your spare time?
David: I love sailing. Really enjoy it because it's such a big contrast to what I really do day to day. I love film. I love the whole creative process and actually start-up companies. I actually do enjoy that, particularly the environmental sector doing some very good things there. But that's a whole other interview, I suspect.
Neil: And I think this is the first company I've been to with their own streaming room. Tell us a little bit about that.
David: So this streaming room you see around us, we make more than 100 hours of what in ten years ago would have been called television. So that's on Twitch TV, YouTube and things like that where we talk about our games. This year for the first time, we did our financial results in this format. So conversation on these very sofas, we've actually got other streaming rooms here in the building as well because we do it for each of our games. So sometimes they clash, and so that's that's why we do it, but it's how we engage with community and that's the sort of thing. And you know, investors are also key community for us, so it seems a logical thing to do. So that's where we are.
Neil: David, thanks so much for having us. It's been an honour to be here and spend some time with you. And thank you all for tuning in and listening to this and and hopefully watching it as well.
David: You're very kind. Thank you, everybody, for watching.
Neil: You can see more in the series at lsegissuerservices.com/spark.
