Codemasters cements its dominance in car racing video games after popular new titles help sales double
- Codemasters has accepted a c.£750m takeover offer from Take-Two Interactive
- It signed an exclusive five-year licensing deal with the World Rally Championship
- The firm attracted a record-breaking 30m viewers to its Virtual Grand Prix Series
Motorsport video games maker Codemasters saw its first-half revenues double on the back of releasing three new titles and continued strength in its back catalogue.
The group’s year-on-year sales rose to £80.5million in the six months to the end of September thanks to a strong performance of its F1 2020, Project CARS 3 and Fast & Furious: Crossroads games. Its profits almost doubled as well to £19.9million.
F1 2020 was especially well-liked with gamers as it reached the number one spot on the UK physical games charts in July to give the company’s F1 series of games its best opening week in three years.
Codemasters is the official video game developers of the highly-popular Formula 1 series
However, this did not stop digital sales as a share of its revenue jumping by 11 percentage points to 73 per cent as the temporary shutting of stores due to the coronavirus pandemic encouraged more players to make their purchases online.
Codemasters, which recently agreed to a takeover offer worth about £750million from American firm Take-Two Interactive, also said its games-as-a-service platforms has been ‘performing well’ and is ensuring its releases have a longer life cycle.
Games-as-a-service (Gaas) is a business model whereby gaming companies offer content on a recurring revenue model. It allows them to continue making money on a game for more time after its initial early sales period.
Though the group said Gaas remains a small proportion of its overall earnings, it believes this will gradually form a much larger share of their revenues going forward.
Additionally, Codemasters observed that Dirt 5, which came out on November 6 and is the company’s latest release, has experienced good sales and that it anticipates bringing out another three games in the first half of the next financial year.
‘I am delighted to report a record first half in which we benefited from three game launches, including our most successful iteration of the F1® franchise,’ remarked chief executive Frank Sagnier.
Codemasters CEO Frank Sagnier: ‘We are fortunate to operate in an industry which has shown incredible resilience over the course of the year, shielding us from the impacts of Covid-19’
‘We continued to make significant progress against our strategic objectives, to strengthen the Group’s overall leadership position in racing, grow the audience and increase average revenue per user.
‘We are fortunate to operate in an industry which has shown incredible resilience over the course of the year, shielding us from the impacts of Covid-19.’
It has benefited strongly from people spending more time at home this year and has seen digital download of their games grow as a consequence. This enabled it to attract a record-breaking 30 million viewers to its Virtual Grand Prix Series.
Codemasters recently signed a five-year licensing deal with the World Rally Championship
During the series, Codemasters signed an exclusive five-year licensing agreement with the World Rally Championship (WRC) to develop videogames and associated e-sports tournaments.
That deal will not start until 2023 though by which time it will be over two decades since the company created an official WRC game. But it will mean it has the license for two major rally franchises – the other being Dirt, whose forerunner was the Colin McRae rally series.
Aside from car racing, the Warwickshire-based firm has also developed the Brian Lara Cricket series, the action role-playing game Overlord, and military simulation series Operation Flashpoint.
Shares in Codemasters closed the day 1.6 per cent higher at £5.
Shares in Codemasters