... BUT FRONTIER SHARES DIVE AFTER PROFITS HIT

SHARES in Frontier Developments crashed to a six-year low after it issued a profit warning following a grim Christmas.

The video game maker’s stock plunged 42.6pc, or 426p, to 573p after the company, whose titles include dinosaur park management game Jurassic World Evolution, highlighted a ‘general sales underperformance’ over the festive period.

In another blow to the sector, rival game maker Devolver Digital also slumped 12.6pc, or 8p, to 55.5p after cutting its earnings guidance following a ‘lower than expected performance’ in the second half of 2022, driven by weak Christmas sales and three underperforming titles.

A particular issue for Frontier was a worse-than-expected showing from its F1 Manager 2022 game ( pictured), which was released in August.

While the game’s initial performance was strong, its sales over the key Christmas season fell ‘materially below original expectations’ which it partially blamed on consumers cutting back discretionary spending amid the cost of living squeeze.

As a result of the ‘more challenging economic outlook’, the company no longer expects to hit market forecasts for the year to the end of May, which included a profit of £19m and revenues of £135m.

Frontier expects to generate revenues of at least £100m for the 12-month period, although it believed it was ‘still possible’ to surpass the previous year’s record revenue figure of £114m. Revenues of £100m would result in a profit of around £2m, much lower than forecast, while matching last year’s revenues would generate £10m.

‘It is very disappointing to be resetting our financial expectations,’ said Frontier boss Jonny Watts.