Devolver Digital, the indie publisher behind games like Hotline Miami, Talos Principle, and Baby Steps, has announced plans to delist from London's AIM stock exchange and become a private company again. The proposal was posted to investors on August 6 and will be voted on at a general meeting on September 8.
Devolver went public in November 2021 at a valuation of $950 million, with CEO Douglas Morin saying at the time that an IPO would 'ensure our continued growth and support even more wonderful games' and help the company 'retain our culture.' The move came shortly after Devolver's success with Fall Guys, which brought in $150 million in 2020 and led to developer Mediatonic being bought by Epic Games in March 2021.
Since then, according to Devolver's own filing, the video game industry has faced 'significant disruption and volatility, characterised by widespread layoffs for studios and publishers, platform rationalisation and substantial impairments across the industry.' The company says its shares are now valued at just $44.6 million — a 95.3 percent drop from its IPO valuation — with the stock price plunging to 7.15p ($0.10) after the delisting announcement.
Devolver's board argues that public markets are fundamentally mismatched with how games generate money. The filing states that game development timelines are unpredictable and financial results can vary significantly between reporting periods, which clashes with the market's expectation of 'predictable, sequential growth' under semi-annual reporting. As a result, Devolver says it has faced 'increased pressure to deliver short-term market expectations that do not necessarily reflect the underlying long-term value creation potential of its portfolio and development pipeline,' and that its valuation has ignored the 'lifetime and long-tail revenue delivery inherent in the video games business.'
Beyond the philosophical rationale, Devolver says going private would save the company roughly $1.6 million annually, and notes that trading in its shares has been limited anyway. The company has also proposed returning up to $5.0 million in cash to qualifying shareholders through a tender offer, pending shareholder approval. In a statement to GamesIndustry, a Devolver spokesperson said, '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.'