China crackdown clouds future for UK gaming groups – Financial Times

A flurry of new gaming companies have sprung on to the UK market recently. According to estimates by Green Man Gaming, the video games industry is worth about £30.4bn and is set to increase more than 30 per cent to £40.1bn by 2020.

The company, an online video games retailer, recently said it intended to list on Aim, London’s junior market, in order to fund more “aggressive” global marketing and expand into “underserved international markets”. It has a valuation of about £100m.

But success relies on making a splash with new games that can take years to develop, or leaning on the appeal of old franchises.

Meanwhile, some lawmakers have not looked kindly on the sector. In China, the Ministry of Education announced plans to curb video-game releases and the amount of time young people can spend on online video games. Shares in China’s Tencent, the world’s largest gaming company, dropped by as much as 5 per cent on the news.

Frontier Developments

It has been a mixed year for Frontier Developments, the company best known for space combat game Elite Dangerous.

Shares rose rapidly in June when a new franchise, Jurassic World Evolution, was launched in tandem with the blockbuster film.

But this month, it posted a 8.6 per cent fall in revenues to £34.2m for the 12 months to the end of May, which it put down to the fact it launched no new franchises in that period. Full-year earnings before interest, tax, depreciation and amortisation dropped more than 25 per cent from £12.7m to £9.4m, which it blamed on increased investment in marketing and also in research and development for its latest dinosaur release.

Its shares currently trade at about £11, down from highs of £18 in June, but well above a price of nearly 300p at

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