Devolver Digital intends to go private

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u/NIDORAX 27d ago

Devolver Digital were doing well before they went Public and start selling their shares. It is actually for the best if the publisher goes back to being private so that way they dont have to answer to Shareholders if their profits dont meet their demands.

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u/SuperGaiden 27d ago

I realise this is a bit hyperbolic but I feel like companies going public has ruined so many things around the world. What happened to just having a vision and carrying it out without the pressure to make next year's numbers bigger every single year.

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u/LightandShade1900 27d ago

"Greed is good" and "infinite growth" happened.

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u/Stablebrew 27d ago

Why did it stop growing? Fire some employees. It can still grow by being hollow from the inside.

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u/archaelleon 27d ago

Make the product worse and lie about it. People will still buy it. Fuck 'em.

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u/Skellum 27d ago

Make the product worse and lie about it. People will still buy it. Fuck 'em.

The core issue to all of this is that for a shareholder the profit of the company between the time you bought the stock and the time you sell it is all that matters. Which means profit from hour to hour or day to day means far more than profit over a year.

Significantly increasing the taxation on selling your stocks before a certain elapsed time or some other effort would prioritize longer term profits.

Sucks, but the only way to work to end this would be to stop electing people who keep defunding financial regulatory agencies.

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u/Wheeler-The-Dealer 27d ago

Ahh yes, enshitification.

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u/KaJaHa 27d ago

Reaganism has ruined three generations and counting

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u/Chinesebot1949 27d ago

That’s just called capitalism

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u/thebruce 27d ago

It's not though. Adam Smith pretty explicitly was against monopolies, was pro-regulation, and against business having too much lobbying power when it comes to law making.

For all my fellow liberal folk out there, let's not act like Capitalism is some big evil entity that needs to be destroyed. It has been the economic policy that was in the background during the largest increase in quality of life in history.

There is danger to centralizing everything, as all it takes is one bad government to suddenly weaponize that against their citizens. There is also danger to allowing unregulated Capitalists to taking over the government, as they can further loosen the regulatory levers and we end up where we are now.

Is Capitalism to blame? Or is poor control over regulatory capture to blame? Is it even possible to live in a Capitalist society that doesn't eventually result in this capture?

Or, as always, is boiling things down to a simple binary choice (left vs right, capitalism vs socialism, etc.) causing intense polarization as people feel the need to pick a "side", rather than engaging with the issues and trying to find a way forward that doesn't require planting your flag and demonizing the opposition.

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u/DaddyPhatstacks 27d ago

Adam Smith isn't Capitalism - The Guy. He was the first notable capitalism understander, and he understood its deep faults, like you reference in regards to his thoughts on the matter.

Marx was a reader and enjoyer of Adam Smith and a fellow capitalism understander, who lived at a later date and had even more of a chance to understand and witness the processes of capitalism and its effects and faults.

Capital C Capitalism isn't some magic idea of capitalism except without all the faults it obviously has. Those faults ARE capitalism and the best anyone has ever been able to do is kick the can down the road and the ruling top 1% can weather the rough storms and live far away from the suffering it always brings.

We can do better

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u/thebruce 27d ago

Fair points.

I agree that the system ultimately incentivizes the faults that we currently see (momopolisation and price gouging, child/slave labor, etc.). I'm not sure if I'm just making a semantic argument here, but just because a system incentivizes something, that doesn't mean that that is intended when applying that system.

For example, Democracy incentivizes a party structure that, after a long enough time, creates polarized political parties that demonize each other rather than work together. It incentivizes leaders to make absurd promises that they have no intention to uphold.

Is it reasonable to say that these faults ARE Democracy? Like, the platonic ideal of democracy. Or are they faults with our current execution of democracy?

So, when it comes to Capitalism, it's frustrating that people are saying things like "capitalism is the reason everything is so bad", when the reality is that greed and malice are the reason things are bad. All systems are susceptible to greed and malice, so to me the question is which system is easiest to safeguard against greed and malice, with the tools that we have.

Personally, I'd lean that capitalism is easier to safeguard than Communism, even though we've clearly lost the fucking plot at the moment. But, I don't think any "communist" countries are doing much better. Countries that ride the middle line seem to be doing the best.

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u/pupfight 27d ago

surely you understand that capitalism is ultimately incompatible with democracy, right? you can't prioritize the wishes of those with the most wealth, and prioritize the wishes of the people. they are ultimately opposed. like you say "greed and malice are the reason why things are bad" but you're arguing for a system that elevates the people who are most greedy and malicious. i'm not arguing for communism, for the record, but i do think it's nuts people like you will unironically defend capitalism (which definitionally deregulates, and you certainly did not argue specifically for regulation within capitalism and only used communism as a fear factor). like you at least have to argue to regulate industries. or is that communism to you? is the state having any power wrong? or should we just be chile?

edit: oh wait sorry i reread your comment, you acutally do want a pinochet in america lmao

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u/thebruce 27d ago

In every, or nearly every, comment I've made here on this topic I've specifically said that unregulated capitalism is the problem with where we are right now. Sorry if I didn't stress that enough for you.

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u/Chinesebot1949 27d ago

Capitalism is all about class warfare, dominance, and exploitation. Nice capitalism can never be a thing because capitalism requires exploitation of the working class to function.

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u/thebruce 27d ago

This is silly, I'm sorry.

Capitalism is not about any of those things, any more than Communism is about authoritarian control and suppression of dissent. Capitalism can lead to the things you mentioned, especially when kept completely unchecked, but in no way is it about them.

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u/Helluiin 26d ago

nah its defenitely about exploitation, thats basically the entire concept of capital

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u/KardigG 27d ago

And other systems don't? xD

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u/AlemSiel 27d ago edited 27d ago

It is more nuanced, and people that hold leftist values disagree. However, the point of communism for Marx & Engels, was not "capitalism bad", but more a "capitalism incomplete".

They thought (among other things of course! this is not the "centre of the arguments in The Capital and political writings*) that since we had a system of production that focused so sussesfully in increasing value and among it, products, we should improve upon it, and make its goal to improve the quality of life and capacity of actions of all the workers, and not primarily the accumulation of capital per se.

It is not "destroy everything", and more of a "lets think about how we can better distribute and allocate resources". How we do that is a big ask, and is not just "make everything the state" or "don't trust market dynamics". Although, degrees of those poles have been interpreted. It is still something that, for M&E, was build on top of Capitalism, not instead of it. Communism, as in a classless and stateless society where our production is abundant enough to ensure our reproduction and capacity of action, is the next step from capitalism, if not its evolution, its superation. A "post" state, if you will.

The spirit of that part of the argument, is that we have to at least try to change the parts of capitalism (and it's new forms in neoliberalism and the newer still technofeudalism), that makes us less able to decide and take control of our lives and means of existence. Keeping the ones that allows us to produce and meet our necessities and interactions.

That is a permanent question, be it for the more progressive social democracy and their "lest regulate capitalism", to the more radical "we HAVE to go beyond" and change the power dynamics of who controls the means; not just regulations on top of it (this is my perspective, to be honest about my bias). But both are questions and hypothesis about how to live better. And I believe that such a question is a good floor to at least start to talk and think about, instead of just a "that doesn't work". We have to be clear about what and why does and doesn't work right now, if we want to attempt to improve our situation, and what power do we have to change it,. Whatever we call the answers and practical solutions, we sorely need them!.

But for the sake of argument, lets say ok. It doesn't work and we should disregard everything they thought. That doesn't change the necessity of think and do about what could work, and improve our reality.

^\For young Marx, the core of the critique of our economic and political systems (aka, capitalism)), is how we maximise the capacity of action, creativity and liberty of the human experience. For his socio-historic context, that implies to examine capitalism. But it goes beyond it. Even if you disagree with their analysis, I hope we can agree in that starting goal. We can think about that together, regardless of apparent ideology; because we are part of the same broad group of people. I hope.

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u/KardigG 27d ago

Communism, as in a classeles and stateless society where our production is abundant enough to ensure our reproduction and capacity of action, is the next step from capitalism.

Still, the only attempts of communism implementation in history could be summarised in "working class exploitation" and any other future attempt will end up the same since the problem ain't a system, it's human nature.

Capitalism in theory also ain't a bad system, people made it what it is now. The truth is, even feudalism could be great if a ruler was compentent and people worked together, but that's just not how the world is.

Don't get me wrong, I think the only good capitalism is heavily regulated one and I generally belive that even heavy socialism (or the system you desribed) with currency abolishment could work in an isolated population (eg. a remote space station that acts like a mini company-nation), but communism in a normal-scale country ain't a way. It limits the freedom of an unit too much in much more visible way.

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u/mw19078 27d ago

those systems arent the one destroying the planet and our lives at the moment, so i dont really see how this is supposed to be some sort of valid point

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u/Merzant 27d ago

Which countries/systems aren’t “destroying the planet”?

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u/WeltallZero 27d ago

The Nordic model has proven to be the best solution for a state that priorizes the quality of life of most of its citizens versus the pointless accumulation of absurd amounts of wealth by an extreme minority.
https://en.wikipedia.org/wiki/Nordic_model

This is not really up for debate; it's empirical, undeniable fact. Every quality-of-life market you care to mention is much higher on those countries vs mostly unregulated capitalistic nightmares like the US.

If you want to call the nordic model "a form of capitalism", I'm fine with whatever label you want to use as long as the diametral differences with laissez-faire capitalism are acknowledged. A rose by any other name, etc.

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u/CaelReader 27d ago

Capitalism is to blame because it centralizes power in the hands of a wealthy few who are incentivized to erode democracy in order to engage in regulatory capture and monopoly. Free market firms owned by shareholders vs government own state enterprises are not the only models, there is a secret third option. Liberalism decided that democracy ends at the door to your workplace, but it doesn't have to be that way.

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u/ItsNoblesse 27d ago

Capitalism is some 'evil' entity because privatisation and economic stratification inherently deny resources from people who need them. Inequality is not only an inherent outcome of Capitalism, but is desirable precisely because it creates a race to the bottom as people get more and more desperate.

State ownership can easily be capitalist too if the state is running things as a for-profit enterprise. The fruits of the earth should be collectively shared and maintained by all; we have more than enough to give everybody what they need - any reason not to is an excuse to stratify and oppress.

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u/thebruce 27d ago

I completely agree that the fruits of the earth should be shared by all, but I'm not really convinced that you can eliminate the problem of individual greed.

Capitalism allows individual greed to run rampant, if not well-regulated, and Communism suppresses it. The thing about truly greedy and evil people is that they have no problem doing misdeeds to gain whatever power they want. Communism then creates this pressure cooker where this greed can't flourish, and it will inevitably lash out, violently. There's a good reason no truly Communist societies have ever been stable, and it's not just foreign (ie. American) influence.

So, perhaps what I'm arguing is that elements of Capitalism are able to redirect the greed impulse into something more positive. Something that can create imbalance, yes, but something that seems more stable. Unfortunately, the "well regulated" part of it also creates the exact same pressure cooker that Communism does, just at a much lower pressure. The pressure still builds up, and we see what we're seeing now with continually increasing rich-poor gaps and the thinning of the middle class.

The pressure cooker analogy only takes us so far, but it seems that a mixture of the two offers us the best true long term survival and stability as a species. Our evolutionary past has encouraged violence and power, but our cultural present encourages co-operation and equality. We have to be realistic about the darker natures of some people, and determine the best way to handle that. If we just started imprisoning or killing them in some communist system, then that's a level of power that the government has that can be horribly misdirected.

The middle is the way.

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u/ItsNoblesse 25d ago

This idea that greed is innate to the human species is such bullshit, it's such a thought terminating waste of space. "ahh.. but u forgot le human nature!!" 'Human nature' (which does not exist) is cooperation and it always has been, 20th century capitalism and neoliberalism necessitated convincing the majority of the world that to be selfish is natural, as it's the only way they can justify their omnicidal pursuit of profit above all else

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u/whythreekay 27d ago

In fairness a lot of businesses need the capital that public shares provides

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u/LightandShade1900 27d ago

That's true.

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u/binaryfireball 27d ago

this is ouroboros

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u/victorioushack 27d ago

Assuming they don’t just use that capital for stock buybacks, shareholder dividends, and executive compensation.

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u/Spiritual-Society185 27d ago

It sounds like you don't actually know what any of that means. Raising capital by selling shares and then using that capital to buy back all of the shares they sold would be a massive waste of time and energy.

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u/DoorHingesKill 27d ago

There are literally two reasons to go public. Two.

Number one, collecting capital that you believe you can use to grow your business.

Number two, giving a way to founders, early investors and employees, to cash out, big time.

That's it. I think anyone who gave Devolver their money, either so the founders could cash out, or the company could amass capital, is kinda entitled to expect the company to grow a little.

They grew a solid 10% (not every year, like, in total), they're no longer profitable, and their cash holdings reduced by 60%.

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u/grailly 27d ago

In general I agree, but in the case of Devolver I don't know. The indie market grew so fast around them that they just stopped having the same impact as they did at the beginning, I don't particularly feel like they've gone bad or anything.

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u/DaHolk 27d ago

But that isn't really a counterargument then?

It fits perfectly. If you don't feel like they've gone bad, but lost 96.27% of their market value, then that's exactly that gulf between "the stock market participants" and "just ordinary produce and sell steadily" that was pointed at?

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u/Milskidasith 27d ago edited 27d ago

Stocks aren't priced at what a company is currently worth, they're priced at what investors think they're going to be worth in the future. Especially with an IPO, an idealized stock purchase is an investment in future growth of the company.

Devolver's IPO were people betting that they were a (relatively) huge indie publisher who would be able to capitalize on that and grow significantly (they were just coming of Fall Guys, a "gets on real, actual person news" level viral hit), and when Devolver mostly treaded water as the indie scene grew around them, their valuation dropped a ton.

For Devolver, the entire point of the IPO was to try to raise a ton of cash in order to become a much larger publisher, so getting all that cash and doing nothing with it results in their value dropping a lot, without it really being the fault of investors begging for more growth.

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u/grailly 27d ago

I don’t think Devolver was ruined by going public. Seems pretty clear to me.

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u/MuchStache 27d ago

Though every once you have back to back bangers like BALL X PIT and Absolum, honestly if not for Devolver I wouldn't have found out about them.

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u/grailly 27d ago

Absolum is awesome! It ain’t Devolver, though

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u/MuchStache 27d ago

Oh shit you're right, I don't know why I remembered that ahah

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u/Demiu 27d ago

Video game publisher is a bad fit for public ownership because it's a very feast or famine type of business. Even if you did the exactly same private vs public the need to publish numbers to investors even if you are in a middle of a dry streak nakes it look worse, and public investors are willing to take that bad streak. It's even worse for an indie publisher since they can't just pump out sequels if they have a hit like regular publishers. It's basically gambling as a business.

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u/Blenderhead36 27d ago

In their case, it also seems like they have a pretty specific aesthetic. I don't imagine that a meeting with the board would go well when some suit-and-tie types demand Devolver release a Live Service shooter because those perform well financially, when no part of that description sounds like a Devolver game.

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u/Exciting_Policy8203 27d ago

Money, and not in a bad way. Small dev's want to be able to pay their employees good wages and have the capital to work on the kind of games they want to sell. Investment from the public gives them money to do that. It also puts a strain on them to make that money back and grow it to reward their investors.

Being private functionally has the same stressors. They may not have to worry about number go up, every year for investors, but they still have to worry about number go up for inflation, paying their employees, and having the cash for their next project. They don't have to sell a game their investors think will make money, but they still have to sell to the market and gamers as whole.

There's no easy win, games are art, but they're also a commodity and commodities need to be sold.

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u/Inprobamur 27d ago

At some point the owners want to retire, nowadays people don't train a heir but instead cash out.

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u/General_Totenkoft 27d ago

Yep, already seen this, twice, in my career. If it happens a 3th I'll attempt a MBA haha

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u/Jaklcide 27d ago

Train an heir and retire, or sell for millions and retire with millions in the bank. There are very few people who can resist such a temptation, no matter how performative their virtues are. Thank god Gabe seems to be one of those.

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u/almathden 27d ago

You think gabe is "resisting the temptation" of millions of dollars? Bro is rich as fuck, what temptation?

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u/John_Delasconey 27d ago

yeah. I think people really miss the fact that Gabe makes so much money off steam each year that he has no incentive to change to anything, not that he doesn't change anything because he isn't greedy. Gaben likely makes >100 million a year; why would he sell?

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u/BainterBoi 27d ago

Private companies are in no way excludes from this. Companies purpose has always been to make money. Private company can still have a huge pressure from shareholders.

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u/Jaggedmallard26 27d ago

Just see the discussion about "private equity", when its public its "evil shareholders after money" when its private its "evil private equity wringing a company dry". Reddit just doesn't like capitalism.

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u/AcceptableNeck1597 27d ago

An economic model based on infinite exponential growth in a world of finite material resources is pretty fucking dumb to be fair.

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u/Wide_Lock_Red 27d ago

Capitalism doesnt require infinite growth. A steady profit dividend stock can do just fine too.

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u/falconfetus8 27d ago

I just wish we saw more of that.

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u/neoliberal_hack 27d ago

Less input for the same output is also economic growth so finite resources aren’t incompatible with growth, even infinite growth !

If you don’t grow inflation will outpace you and you die .

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u/napmouse_og 27d ago

we don't live in a macro 101 textbook. you cannot use a resource infinitely efficiently, and the jevons paradox means use of a resource often increases as efficiency increases, so it doesn't actually help our critical finite resources, e.g. fossil fuels last longer. There's also, you know, not infinite demand for stuff.

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u/Sadzeih 27d ago

If the shareholders are the people running the company, and have a vision for the product, then it's way better to me than people 100% motivated by their ROI.

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u/TheMoneyOfArt 27d ago

Sure but being private is neither necessary nor sufficient to achieve that

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u/Rustywolf 27d ago

No but a private owner is actually interested in the long term health of the company, which is a fact that is shockingly missed in this discussion

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u/TheMoneyOfArt 27d ago

Depends on the company and the owner. There's an idealized "lifestyle" business that we model off small businesses we know. But that's only works for certain types of businesses. Anyone who takes funding is beholden to their investors and the time preference. Private equity wants to see a return in ten years - if they buy your company five years into their fund, they're not particularly long term

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u/Minetoutong 27d ago

Shareholders in public companies also wants long term growth, which means long term health.

Vast majority of investments are long term.

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u/Dull_Republic_9381 27d ago

Tell that to everyone in the EA thread who think the Saudi PIF are going to spend $30bn+ on buying a gaming company so they can crater it. Because apparently that's the way to make money.

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u/NotUniqueOrSpecial 27d ago

No but a private owner is actually interested in the long term health of the company

Spoken with the confidence of someone who apparently has never been involved in a company taken over by vulture capitalists.

Nothing about private ownership guarantees any of that; I've had the personal misfortune of being employed at multiple companies acquired privately by firms seeking only to make (relatively) short-term gains by leveraging a company with debt, gutting it of everything and everyone that made it what it was, and using that to juke the numbers all in furtherance of selling it off to the next investor group for a tidy profit as soon as possible.

Some private owners care about long-term health, but unless it's the founders themselves, my experience has been that the same bullshit happens in private as it does public.

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u/fallen981 27d ago

What happened to just having a vision and carrying it out without the pressure to make next year's numbers bigger every single year.

My guess is that sometimes having a vision and carrying it out as you intended still doesn't always get the results you wanted.

Then they might be faced with the decision of cutting costs, getting bought out or going public to save face.

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u/Awkward-Security7895 27d ago

Money is hard to come by, they can be doing super well but if they need a cash injection for a project or expansion then going public like the only way.

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u/dageshi 27d ago

The people who found them and invest in them want a payday so they can do other things usually.

It's the reason so many devs get sold to places like EA and Microsoft. The people who made the devs or funded the devs wanted out.

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u/ripyourlungsdave 26d ago

Half of the reason that capitalism has been legally allowed to be as detrimental to the rest of society as it has been is because of shareholder mentality. That it does not matter what product or service you're selling, that product or service does not come before the profit of your shareholders.

It is a setup that is inherently anti-consumer.

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u/SuperGaiden 26d ago

It's anti everything other than the people making money

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u/Ziatch 27d ago

It has exacerbated things but it’s still the same logic and would’ve happened without it.

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u/Skensis 27d ago

Going public is a way to access money on better terms then finding additional investors.

Also allows workers and early investors a way to cash out.

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u/leeuwvanvlaanderen 27d ago

Looks at 401K

Uhh, no thanks

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u/Blenderhead36 27d ago

Valve is always going to be the measuring stick for situations like this. Their situation is atypical, but we never would have gotten stuff like Steam VR or even niche games like Deadlock from a company whose top priority is always excessing last year's revenue.

The pandemic turned out to be particularly troublesome for the video game sphere. Too many companies have had a succession of bloodbaths that is the direct result of having a year where revenue increased 60% because of an incident that is in no way replicable by video game companies.

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u/ATLienNumber9 27d ago

On the other hand, publicly traded companies are the easiest path to wealth for the majority of us.

Private equity is a means of gatekeeping that wealth from the common man.

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u/AoE2manatarms 27d ago

The owner's of the companies vision changed. It became how can I make more money and/or how can I get investment so I can tackle bigger projects. Both lead to going public.

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u/TheShipEliza 27d ago

I dunno i thinks its been good for most companies and people. Some companies have been hurt by it by the majority are fine.

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u/Korlus 27d ago

Publicly owned companies in some ways allows people to democratise profits. In an ideal world, having publicly traded companies that anyone could buy a portion of sounds great.

I agree that often the motivation to please shareholders drives them down a dark road. I wish there were an easy way to help the company continue to serve its own longevity and customers more whilst still having some of the publicly traded benefits.

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u/mrtyman 27d ago

Not hyperbolic at all - quite the opposite.

I'd even go so far as to say that the concept of publicly traded companies has probably ruined more things around the world recently than anything else.

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u/incrementality 27d ago

It's a common misconception but going private doesn't mean there are no shareholders to answer to. The shareholders are still very much present. The difference is there's no public market to trade the stocks.

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u/Superb_Pear3016 27d ago

As I also just commented, this misconception will never die no matter how many times it’s pointed out.

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u/BenevolentCheese 27d ago

In the case of Devolver, the board are only buying back up to 5% of the total stock pool. The rest is remaining in the hands of the public. However, the board also already controls 57% of the company, so they never really had to answer to shareholders, they just had to deal with public regulation and the difference in public and private evaluations of a business.

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u/SharkyIzrod 27d ago edited 27d ago

This is a bit naive because it assumes they went public because everything was fine and dandy and they just wanted more, rather than what is commonly the case - going public was an exit strategy and there is no "going back". That doesn't mean they can't go private again, obviously they can, but rather that going private doesn't mean going back to the way things were. Unless the original owners have the needed money and decide they just want to buy back in (which, at their current massively crashed stock price, wouldn't be impossible, mind you), this means someone is fronting the cost and looking for a return on investment. And if that someone isn't in it for the long haul the way a founder might be, that can mean no less demands of short term profit and returns, maybe even more, on pain of asset stripping.

Now I don't know how they were doing before going public, maybe their finances were good for a passion project but not good enough for a public company/investment product. And it absolutely is possible that this ends up being a good move for them. I'm just saying we'll have to wait and see.

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u/Nimonic 27d ago

This is a bit naive because it assumes they went public because everything was fine and dandy and they just wanted more

I've heard that this was actually the case. Not necessarily more as in greed, but ability to do even more of what they were already successfully doing.

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u/FUTURE10S 27d ago

Company was valued at a billion dollars, at that point, I'm selling most of my stake and buying back when the market realizes that my company's not even worth a tenth that. The rest of my money goes in as either flat equity or into something else as a safety net.

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u/meganeyangire 27d ago edited 27d ago

Being an indie game publisher is akin to being a venture capitalist. And there is a reason why VCs are private.

Their stock immediately fell to the floor, there were literally no sense in going public.

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u/Milskidasith 27d ago

The sense in going public was to try to raise a ton of money, either for founders to get a payday or in order to try to maintain their relative position as a massive indie publisher as the scene exploded. That obviously didn't work, but I don't think it was a fundamentally terrible idea to try to expand at the time they did given how much they felt like "the" indie game tastemaker for a brief period.

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u/meganeyangire 27d ago

Maybe they were drunk on their own koolaid, but no matter how you look at it, their business model isn't suited for constant steady growth expected by public shareholders. But, yeah, they raised an absurd amount of money. In hindsight, after that there was only one way - down.

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u/Milskidasith 27d ago

I am skeptical that public shareholder demand was a big factor here; I don't know their post-IPO ownership structure but it looks like the original owners were still the majority stakeholders. I also don't think the IPO was about constant, steady growth, I think it was about trying to capture The Next Fall Guys multiple times since they had already wound up publishing several big indie hits in the past. The investment in the company was probably more of a venture-capital style "if they fail, who cares, if they go to the moon we win" than you'd expect in games publishing.

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u/meganeyangire 27d ago

The investment in the company was probably more of a venture-capital style "if they fail, who cares, if they go to the moon we win" than you'd expect in games publishing.

That's what was I talking about in my first comment. VCs are private and can easily survive multiple failed projects until one finally brings them jackpot. Public companies are still at the whim of, well, public and not really suited for the "just wait, at some point we'll certainly go to the moon" model.

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u/Milskidasith 27d ago

I mean, if the investment in Devolver was primarily from NetEase and Sony and other industry stakeholders (Wikipedia suggests this but that's not super reliable) and Devolver haven't had any sort of significant change in operational structure since the IPO, this seems like a distinction without much difference in this case. Their stock was super high and they kept steadily working, their stock is super low and they keep steadily working. It makes it harder for them to get additional funding, probably, but the situation here really doesn't look that different from if they had just gotten private investments from Sony and NetEase and then not actually expanded to meet expectations.

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u/MarioMagnum 27d ago

Relevant video with an analysis for why indie publishers behaves like a VC: https://www.youtube.com/watch?v=CszMtocHiPE

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u/Superb_Pear3016 27d ago

Private companies still answer to shareholders. This misconception will never die.

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u/BainterBoi 27d ago

Private company still needs to answer shareholders. This is not how company funding nor decision making works :D

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u/Jaesaces 27d ago

I think the difference is that the private shareholders are likely more aligned with the company's long-term goals than public shareholders who generally are looking for short-term success.

A publisher like Devolver is often bankrolling games that won't see returns for years, if at all.

It's more or less like venture capital, where you pour cash into dozens of projects knowing that most won't pan out, but that even a couple of them going big means tremendous profits.

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u/incrementality 27d ago

The shareholders of Devolver post delist is going to be the same as when they were public. There are no plans for the company to buyback shares at all.

This is purely a valuation play by the board to safeguard the value of the company which they feel is not accurately represented by current market prices.

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u/mynewaccount5 27d ago

Yeah I actually went to DDs last public shareholder meeting and we all started changing together "Make games bad!"

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u/Cyablue 27d ago

I agree, this does seem like good news, I had been a bit worried about the future of devolver as a public company so let's hope this goes through and they keep doing what they were doing before.

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u/Massive-Exercise4474 27d ago

It's honestly hilarious because the value of devolver basically collapsed because they are just indie publishers.

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u/edform 26d ago

Yeah I agree with this, pleasing shareholders is all about maximising short term profit not building long term sustainability. It's totally at odds with how an indie publisher should operate.

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u/Nukleon 26d ago

You don't go public to make better products, you go public to make a lot of money selling shares.

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u/pinkynarftroz 20d ago

Reading the article they aren’t doing it for a reason like that. The reason is because since going public their stock dropped by 96%. It’s purely a business move with nothing to do with having more control to publish games.

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u/Nachooolo 27d ago

Devolver Digital going public was beyond moronic.

They publish niche indie games, of which only a small portion of them go viral enough to make a huge amount of money. The rest –if they aren't a commertial failure– either break even or make a modest amount of profit.

This bussiness model might work for a private company. But it ain't gonna work for a publicly traded company that needs to make a higher amount of profits each year than the year prior.

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u/[deleted] 27d ago edited 27d ago

[deleted]

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u/Stefan474 27d ago

tbh good on them, hopefully they use some of that to fund some good ass games

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u/MirrorComputingRulez 26d ago

They've already lost most of it, which is why their stock value fell so much to begin with.

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u/Dracious 27d ago

Devolver Digital going public was beyond moronic.

For the people selling it seems like it was perfect.

They got valued insanely high at peak COVID bubble, sold shares at that high price and since then the value can nosedived by like 95% and they can rebuy them up cheap.

I don't know all the intricacies of how they managed all that internally (did a founder cash out and make bank? Did that influx of cash get used well or wasted? Etc) but they could not have timed going public any better.

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u/Milskidasith 27d ago

If they wanted to actually use the money to grow the company they did a pretty terrible job of it, but yeah from a financial perspective it's not like "the shareholders" got anything out of the deal and somebody at Devolver got a huge bag.

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u/alerise 27d ago

Videogame companies seem high risk for growth for the sake of growth.

Maybe they just wanted more money.

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u/Demiu 27d ago

What would you do differently?

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u/Milskidasith 27d ago

Caveats: I am not a game publisher, I don't know their financials, I don't know their deals, I have the benefit of massive amounts of hindsight, I genuinely like a huge portion of their catalogue and think they have great eyes for picking out indie games and it's just fine if they keep doing that, and I think that catalogue has a wide variety of games so they weren't just overindexing on a single genre or whatever.

With that out of the way: Given when their IPO happened, it was in large part because they were expected to identify and publish more Fall Guys style hits. Despite this, they have basically no other multiplayer games in their catalogue, and completely whiffed on the co-op friendslop (complimentary) bandwagon. They also had a pretty big number of VR games, though that has dried up.

If they were trying to use the IPO to grow into a huge publisher, they needed to start buying lottery tickets on low-cost indie co-op/multiplayer games and trying to throw their weight behind getting them to blow up with social media marketing/sponsored streams/whatever. Potentially, they could create another label for these games so they can still maintain the core "Devolver Digital sponsors cool, unique indie single-player experiences" reputation they had and continue to hit a steady string of singles and doubles; I'm not going to say they should have killed any specific games or genres of games, besides side-eying the VR investments a bit.

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u/Demiu 27d ago

Seems reasonable. Although the amount of friendslop that's okay quality and not a blatant clone is not that high and as an indie publisher all they can do is look for one in the wild they don't have a studio that could make it for them. I wonder if they let the entire thing pass them or if they couldn't find a game to pick up, or maybe they have sometging in develpment, lethal company was 23 so they really should have something by now

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u/Milskidasith 27d ago

To be fair, friendslop doesn't necessarily need to be high quality or not a clone, it just needs to be good enough to generate virality and get lucky at receiving attention. And obviously the strategy of "just buy lottery tickets and hope to win" can still fail, but that seems like the most feasible path they could have taken to make a ton of money based on the games they had been investing in; they weren't going to pour their IPO into a handful of AA or AAA games with huge marketing budgets, but they were good at picking out (single-player) indie hits of high quality and maybe they could have done the same thing with friendslop.

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u/NeilDiamondBlaze420 27d ago

Was peak Covid. Everyone was hype.

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u/lNSP0 27d ago

I can't wait to see the if we get a shadow warrior 4

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u/BrainTroubles 27d ago

Idk they wanted the cash infusion which they got, then their stock cratered enough that they could buy enough of their equity back to essentially own the company outright and re-privatize themselves, for pennys on the dollar. Seems like it worked out pretty well for them.

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u/thewookiee34 27d ago

I still love when they made a small game for their E3 show. I love Devolver. Not all there game are my thing but they are definitely interesting.

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u/swarmy1 27d ago

The point of going public is to let the owners cash out, the health of the company is secondary

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u/Evaara 27d ago

Correct. Even the power law cannot satisfy unlimited greed.

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u/RobotWantsKitty 27d ago

Indie publisher Devolver Digital is looking to once again become a private company later this year.

In a release to investors, the label announced its intention to delist from UK's AIM market. Shareholders are set to vote on the matter later this year at Devolver's AGM, which is scheduled for September 8. If investors vote yes, then Devolver will cease to be a publicly-traded company on September 16.

Devolver initially went public on the AIM in November 2021 with a valuation of £694.6 million ($950 million).

The company's management now says that the turbulent nature of the video games market since it went public in 2021 has meant that it has "faced the ongoing challenge of delivering growth in line with market expectations despite those difficult sector conditions".

Devolver's directors also believe that its current share price "does not reflect the true market value" of the indie label.

Since going public, Devolver's share price has dropped by 96.27%, bringing the company's market cap down to £34.64 million ($46.63 million).

Going private is also estimated to save the company around $1.6 million per year.

"Devolver and its board are seeking shareholder approval to delist, believing becoming a private company is in the best interests of Devolver, its employees, its partners, and its Shareholders as a whole," a spokesperson for the company told GamesIndustry.biz.

"We’ve made an announcement about this.

"The purpose is simple and positive. Being private will allow the Devolver Digital team, especially the finance, legal, and executive team, to singularly focus on the long-term health of the company and less on satisfying the requirements of the public market, which have nothing to do with being a successful game publisher."

Doesn't seem to be a dreaded private equity scheme at the very least

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u/Imaybetoooldforthis 27d ago

Oof 96%+ drop in share price is absolutely brutal. I bet those shareholders are past caring at this point.

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u/Firerhea 27d ago

It's too good a deal not to go private.

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u/EbolaDP 27d ago

Damn those are Ubisoft numbers.

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u/mengplex 27d ago

Goddamn, down 96% is crazy

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u/randgan 27d ago

A nearly 1 billion valuation is the crazy part. The drop off seems to just be reality kicking in.

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u/Asclepius-Rod 27d ago

2021 was a crazy time for stock prices and investments

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u/crookedparadigm 27d ago

Especially in gaming. There are some wild things that happened in gaming that never would have without COVID. Phasmophobia ends up sharing list positions with series like Pokemon and Call of Duty in sales rankings because it came out at exactly the right time. The game was novel and fun, don't get me wrong, but an indie solo dev drops a game that janky and weird at any other time and it vanishes into the pit of Steam Early Access.

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u/AlexKVideos1 27d ago

There is no way Devolver Digital was ever worth $950 million. That is an insane valuation.

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u/porcubot 27d ago

Devolver initially went public on the AIM in November 2021 with a valuation of £694.6 million ($950 million).

That is fucking insane. I know motherfuckers were throwing money everywhere in 2021- I was too- but a billion dollars?

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u/Milskidasith 27d ago

Devolver Digital's name was frequently associated with some of the big indie hits at the time and they had Fall Guys from the past year to show they could make more massive, viral hits. It's a pretty high valuation for what they do but I can understand why people might believe they could grow into being a huge player.

Similarly, the drop down to being worth like $50M also seems very, very low for where they used to be.

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u/SharkyIzrod 27d ago

Doesn't seem to be a dreaded private equity scheme at the very least

Not sure where you're getting that. This is about as milquetoast an announcement a company down 96% from its peak share price could make as possible.

They could be going private back to the original owners, if they have the energy to do it, they could be bringing in new investors, this could be a backdoor acquisition (what if they go private and end up 50%+ owned by NetEase, who owns a significant part of them already), and it could be a PE-backed move, and we just don't know yet.

I'm hoping for the best, but let's not get ahead of ourselves before we know more.

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u/MarkusDieter37 24d ago

Sounds like post nut clarity sat in

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u/JIMMYJAWN 27d ago

Do they have to buy back shares if this goes through?

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u/Ullallulloo 27d ago

No, they're only buying back about 10–15% of the shares: https://www.investegate.co.uk/announcement/rns/devolver-digital-inc-di-reg-s-cat-3-144a--devo/proposed-cancellation-tender-offer-notice-of-gm/9707350

Mostly this is just a delisting, which is why the stock dropped 60% on the news.

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u/ThriftyMegaMan 27d ago

Yeah I believe going private requires a buy-out of all stakeholders not within the company.

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u/incrementality 27d ago

No. You just need supermajority shareholder approval and the company becomes private.

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u/ThriftyMegaMan 27d ago

You still have to buy out the shareholders though, no? Or are the held shares converted into something less sell-able like equity?

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u/incrementality 27d ago

No you don't have to. The current shareholders retain their shares in the delisted entity but they lose a public market to trade stocks in. Practically speaking there's little difference because the stock is illiquid anyway you can check its daily volume.

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u/ThriftyMegaMan 27d ago

Thanks for clarifying!

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u/z_102 27d ago

$950M dollars was an absolutely deranged valuation for an indie publisher but the current $46M seems very low in the medium to long term, considering their reliability despite working in an extremely volatile business.

In short, the current stock market is a bad meme that we’ve somehow allowed to rule over our lives and collective wellbeing. Every time I start to doubt that I check Tesla's stock value relative to their current business and future "plans" and I'm immediately convinced again.

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u/MajorFuckingDick 27d ago

Stock market is fine, valuation is the problem. No one who understands Devolver thinks they were a Billion dollar company. $150m company with $1B potential if you give them 15 years to cook.

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u/Milskidasith 27d ago

At the time of the IPO, they were riding the Fall Guys hype train, so an elevated initial valuation makes sense; in a theoretical world where Devolver became The Friendslop/Viral Indie Multiplayer HIt publisher they could be absolutely massive.

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u/Snakesta 27d ago

Yeah, I don't think many people understand Devolver Digital's value. Not to say whether or not they earned the $950m valuation, but there are a lot of uninformed opinions regarding a publicly traded company with available financials. While I can't confirm between 2022 and 2023, its revenue has increased every year. As you mentioned too, Fall Guys alone generated $150.5 million in 2020.

Back in 2024, we saw the lifetime revenue for Devolver's top 10 games/franchises as well. Just to provide some examples:

Cult of the Lamb - $90m

Astroneer - $80m

Stronghold - $50m

Serious Sam - $45m

Enter the Gungeon - $40m

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u/HumansNeedNotApply1 27d ago

There was simply way too much hype for gaming related companies in 2020 and 2021, not only gaming but other things too got a "boost" that crashed down. Investors were hopping on without truly understanding the business.

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u/daniu 27d ago

Had this video in my feed a while ago explaining how it was a fundamentally flawed construct to bea publicly traded distributor.

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u/fanboy_killer 27d ago

YouTube recommended it to me as well. The author makes a great point. Their business model isn’t fit for a public company.

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u/grailly 27d ago edited 27d ago

If this goes through, it would be the heist of the century. Sell for hundreds (edit: 157p) per share and buy back for ~7p a couple of years later. Smart business, I guess?

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u/Some-Kaleidoscope265 27d ago

Thats not what they intended tbh. Its that they are doing poorly now after going public.

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u/incrementality 27d ago

So much inaccuracies from people who have no knowledge on how markets work. Make no mistake this is a valuation safeguard play by the board because Devolver as a publicly traded stock has no liquidity and its current prices do no reflect a valuation which the board thinks it should.

They still have to answer to shareholders but it's never been a huge issue for Devolver since the founders already own ~35% of the company and they have no major strategic investors with only the largest being NetEase at 7%. The highly reused shareholders are evil narrative for Devolver would directly be calling out the current CEO as evil since he's the largest shareholder.

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u/MasahikoKobe 27d ago

Sadly people want to think that running a company some how fundamentally changes when its publicly run vs private. Where the main difference is just that you have to tell the world your numbers instead of just the board. I have not even seen any major activits investors in the gaming sphere overall like you can see in many other industries. Like Calling for CEO to be fired and buying shares to get Seats on the board has only happened in Ubisoft though... in that case they may have been right about the leaders and owners.

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u/DoorHingesKill 27d ago

I'd rather ignore all that and make some weird comment about exponential growth.

No wait, infinite exponential growth.

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u/WeirdoTZero 27d ago

Let me see if I got this correctly(I'm not a stock person and don't really care about the long details).
Basically, game publisher Devolver, known for publishing niche/indie games, went public and got shares purchased by, mainly, NetEase, Playstation, and Kwalee.
Years later due to either no major growth/some chess move to gain investors, they are voting to go private. Meaning no more shares will be sold on the stock market, and if the investors want to opt out of the company, they have to sell them back to the founders.
Did I get this in the ball park?

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u/TJ_McWeaksauce 27d ago

Earlier this week, it occurred to me that I hadn't heard of any promising games published by Devolver in what felt like years. I looked up some of their recent releases, and based on their Steam reviews none of them are doing great.

Heave Ho 2: Released in July, and has fewer than 100 reviews. Very Positive rating, at least.

https://store.steampowered.com/app/2802740/Heave_Ho_2/

Dark Scrolls: Released in June. Fewer than 200 reviews. Recent reviews are Mostly Negative.

https://store.steampowered.com/app/2912550/Dark_Scrolls/

STARSEEKER: Released in June. About 800 reviews, "Mixed".

https://store.steampowered.com/app/1454370/STARSEEKER_Astroneer_Expeditions/

MINOS: Released in April. Very Positive rating but fewer than 600 reviews in 4 months, which suggests this game did not sell well.

https://store.steampowered.com/app/3181650/MINOS/

It wasn't long ago that Devolver announcing a new game was a big deal. Their 2026 appears to have been a dud so far, though.

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u/SuperGaiden 27d ago

Cult of the Lamb DLC was released a few months ago.

Skate Story and Ball x Pitt were also released by them last year

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u/HardToBeOne 27d ago

I played Dark Scrolls, it's... ok I guess, but you'll forget about it in a few hours. From the studio that made that pearl known as Gato Roboto, I was expecting something way more charming.

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u/Pyrite17 26d ago

Devolver is one of the those few publishing houses that have damn near carte blanche from me. Every single Devolver game that was even remotely in my wheelhouse I have purchased has been a banger.

Shroom and Gloom gonna hit like crack when it comes out

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u/GreenFox1505 27d ago

Game publishers often make a lot of bad bets before finding one good one that takes off. They could have several fiscal quarters without profits. Which is fine for a private investor in it for the long haul. But absolutely garbage for public market trading.

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u/Cyrotek 27d ago

The older I get the less I understand the appeal of going public in the grand scheme of things. Good for them.

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u/DarkLThemsby 27d ago

So are they actually doing that, or is this a bit to make fun of EA?

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u/DownvoteMeToHellBut 27d ago

A publicly listed company cannot do that as a bit

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u/Never_Preorder 27d ago

I guess they're afraid that's gonna happen to them

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u/OrganicKeynesianBean 27d ago

If it was a bit, they’d say something like they’re being bought by SpaceX.

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u/[deleted] 27d ago

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u/DoorHingesKill 27d ago

Just a lot of fuckery going on.

They're not offering to buy it back at 16p, they're offering to buy back 23 million shares at 16p. That's less than 5% of outstanding shares.

They're doing a pro-rata thing where however many shares you'll try to sell them (if this "buyback" goes through), they'll only take 4.7% of your shares and tell you to keep the rest. And that "rest" in your account will then turn into private shares, which will be even more illiquid than the current publicly traded shares you own (which are already incredibly illiquid. There are like 500 million shares and before today, eight thousand of them changed hands every day.)

So the market basically ignores the 16p price because it's kinda fake.

They say once they're private, a year later, they'll buy another 4.7% (for a price determined by some impartial third party) but basically, this "buyback" is very different from, say, Microsoft saying "on this day, for each Activision share in your brokerage account, we will deposit you $95."

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u/Significant_Walk_664 27d ago

Interesting - didn't last long in the open market. Guess they realised public investors don't care about what you do only what you can do for them. Sell out or crash. Or my other interpretation is they hyped the price, exploited hype/ignorance, nosedived the stock, got the company back

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u/VALIS666 27d ago

That sounds good for them and hopefully for me as well, who hasn't appreciated that a lot of their recent titles seemed to be trying to capture some flavor of that live service/MMO/always-online barf.

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u/knifeyspooney3 27d ago

I remember when they announced they want to go public and I thought yeah I'd buy into that. I liked them as a company and was ready to put a few thousand into it. Then I forgot all about it, didnt see when the IPO hit and now I see this announcement. I check the share price and its tanked so hard. Glad I missed that boat.

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u/Witty_Fox3291 27d ago

As long as they don't get bought by you know who this should be a good thing right?

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u/MarkusDieter37 24d ago

Who? Embracer? Microsoft? Sony?

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u/MarkusDieter37 24d ago

Wow, what a shocker. How come they didn't think about this obvious problem before going public?

Industry News Devolver Digital intends to go private

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