Updated price target for The Farm 51

Although Get Even is number 6 on Gamespot's Xbox One ranking at the moment the delay of the game and the lack of social media support from Bandai has gotten me worried about the promotional push for the game.

I have actually had the pleasure to play the game as I had pre-ordered it on Playstation and it downloaded to my unit beforehand. I really enjoyed the game. All the corner-gun and phone mechanics are cool but this is at the core a story focused game told in a FPS mode. Imagine the game as the movie Inception, but instead of going into dreams you are going into memories. Memories that can change while you are in them, become bizarre, play tricks on you etc. The music was 10/10 fantastic. I recommend anybody who is going to play the game to first listen to this podcast with the game's composer about the music in the game. Although the scanned environments make the wall textures really cool and immersive, the use of the old UE3 engine is evident in that lightning and shading is not at the best. People going into this game expected an Doom style FPS or RE horror game will be let down as the game is none of that. 

Anyway, without Bandai support the game will not be able to sell as well as I had hoped. Therefor I have adjusted my model to assume only 150,000 units sold. This leaves World War 3 as the core cash-flow generating project for The Farm 51 in 2018. Hopefully we will hear more about the game in the near future and potentially a publisher deal during Q3. The game development had already gone quite far the last time I saw the game earlier this year. With GameInn grants and bond funding the company should be able to complete the game without the need of more financing. My new target price has been lowered to 18PLN after lowering my expectations for Get Even sales.

It is important to keep in mind that The Farm 51 is probably the cheapest listed game developer with a full development team and a upcoming IP in the world.

Get Even delayed due to bomb theme in game,

Given recent terrorist events Get Even is being delayed to June 23rd. The theme in the game is a girl tied to a bomb which is understandably an inappropriate theme at the moment.

It is important to point out that the game is finished and the delay is not related to development issues. This is not CI Games.

This will probably effect the share price tomorrow, although Get Even at best is 10% of the value of The Farm51. This does not in any way influence the future earnings potential of the company and the ability of the company to sign a publishing deal for World War 3 at E3 and develop Chernobyl into a full shooter.

The ghost of CI Games haunts The Farm51 shares

According to Steamspy Sniper Ghost Warrior 3 had a very weak launch on PC and was thus also probably weak on consoles. As CI Games crashed it reminded everybody just how risky it is to have the future success of a developer tied to a single big IP. The whole Polish gaming sector was sold off as investors were reminded that launches can fail and gaming stocks can fall.

On of the biggest sell-offs was experienced by The Farm51. And it is understandable because on the surface it might be viewed as another developer reliant on a single IP. But in reality there are stark differences.

• The Farm51 has two promising IP:s in development, World War 3 and Chernobyl. CI Games has SGW and LOTF, non are very promising at this point.
• The Farm51 has no big intangible assets on its balance sheet as Get Even was developed for Bandai.
• The Farm51 is not at risk running out of cash in the short term as it has recently financed itself and has GameINN grants coming in.
• The Farm51 has a market cap of 117mPLN compared to the current market cap of CI Games of 270mPLN or the 400mPLN it had before the launch of SGW3. So expectations are not in the same dimension.

New investment idea published - The Farm51

I have been pretty quite on the blog because I have been very focused on my next investment case, Polish game developer The Farm51. I have written a few times about it, but now I have put together a comprehensive research report similar to the report on Frontier Developments back in 2016.

In the past The Farm51 has not been a company to get overly excited about, but now the company is moving into a new dimension with the release of their next game Get Even on 26th of May. In my view, it will establish The Farm51 as a first-rate studio and thus revalue the existing product pipeline (which includes a FPS MMO called World War 3) in line with other high quality studios.

Of course, investing in a company with almost no cash-flow in the past based on the release of future games is high risk so do your research and adjust your positions size accordingly.

Disclosure: I am long The Farm51 shares.

Read the full report here.