Blackfriar: Team17 is a great Yorkshire success story

The Wakefield-based global video game developer has built a large portfolio of both its own and third-party games, across many genres and platforms, that strategically target its own niche in the global industry at a low cost.

Despite only being listed on AIM since May 2018, analysts at Shore Capital said the company has adjusted well to market life and it has already become a popular choice for investors wishing to build video game exposure.

Team17 said it performed well over the peak Christmas sales period following a particularly strong performance in multiplayer games on Nintendo Switch.

The firm now expects both 2019 earnings and revenue to be ahead of market expectations.

The group said it is on track to launch more new, original games in 2020 than it has launched in any previous year.

The current pipeline for 2020 includes Moving Out, Hammerting, Neon Abyss, Going Under, Rogue Heroes: Ruins of Talos, Main Assembly, The Survivalists and Golf with Your Friends on Console. Additional titles will be announced during 2020.

The company will report its full year results for the year to December 31 on March 10.

Analyst James Lockyer at Peel Hunt said: “Team17 has done it again: it has released another trading update that is a beat and raise, truly earning its premium rating.

“This is the fifth upgrade for 2019 over the past 12 months. Our 5 per cent increase in EBITDA estimates means it has been upgraded by 40 per cent in total.

“2020 looks to be a strong year too, with more new game titles confirmed today than this time last year. Team17 remains one of our top picks.”

Earlier this month, Team17 bought rival company Yippee Entertainment for £1.4m in a deal that will increase studio capacity and give it access to a new talent pool in the North West.

Team17 said Yippee, which is based in MediaCityUK in Salford and run by industry veteran Mike Delves, will work with Team17 on new games and projects.

Analyst Katie Cousins at Shore Capital said: “We believe the share price does not reflect the unique qualities and growth within Team17 and therefore we initiate coverage with a ‘buy’ recommendation and a fair value of 480p, implying 14 per cent upside potential from the current share price.”

Maybe it’s a sign of the times, but more and more people are turning to video games to escape a reality that includes US President Donald Trump running amok in the Middle East and the prospect of Britain waking up to the fact that Brexit really won’t be done on January 31.

This year Team17 will launch a new game called The Survivalists, which will launch on Nintendo SwitchTM, PlayStation 4, Xbox One and PC.

The game, which was developed in-house, will involve players being shipwrecked on islands where they will train monkeys, gather resources, build structures and fight off threats.

Bearing in mind the reality of this new decade, it’s perhaps surprising that more people aren’t turning to fantasy games to escape from it.

Team17 said The Survivalists will combine the crafting, combat and building elements of The Escapists, another Team17 game that gives players “a light-hearted insight into everyday prison life with the main objective being that of escaping”.

Team17 is a great Yorkshire success story and as the decade unfolds, it offers players a much needed escape from reality.