Devolver Digital Ditches Stock Market After 95% Crash

When Devolver Digital went public on the London Stock Exchange's AIM market in November 2021, CEO Douglas Morin said the IPO would "ensure our continued growth and support even more wonderful games." Five years later, the company's valuation has cratered from $950 million to roughly $46.63 million, a 96.27% wipeout, and Devolver now wants out.

In a statement posted to investors on August 6, the publisher behind Hotline Miami, Cult of the Lamb, and The Talos Principle proposed delisting from the AIM and returning to private ownership. Shareholders will vote on the matter at a general meeting scheduled for September 8. If they approve, Devolver ceases to be a publicly traded company on September 16.

The contrast between Devolver's IPO pitch and its current reality could not be sharper. The company rode a wave of cash from Fall Guys' massive 2020 success, with the game bringing in $150 million before developer Mediatonic was acquired by Epic in March 2021. That momentum made going public seem like a bold next step. Instead, it turned into a slow-motion financial disaster. Devolver's share price has plunged to just 7.15p ($0.10), and the company's filing reads like a post-mortem on why indie publishers and stock markets don't belong together.

A Candid Filing

Devolver's stated reasons for delisting are unusually blunt by corporate standards. The filing acknowledges that the games industry has been hammered by "widespread layoffs for studios and publishers, platform rationalisation and substantial impairments across the industry." But the most revealing passage is this one:

Translated from investor-speak: shareholders want consistent quarterly returns, and indie game publishing simply cannot deliver them. Games take years to make, their commercial performance is unpredictable, and long-tail revenue from a catalogue doesn't show up in the kind of neat upward graphs that markets reward. Devolver's directors believe the share price "does not reflect the true market value of the Company," and I think they're probably right about that. But the lesson here isn't that the market mispriced Devolver. The lesson is that a company whose entire identity is built around creative risk and long development cycles had no business subjecting itself to market expectations in the first place.

Going private is estimated to save Devolver around $1.6 million per year in compliance and reporting costs. The company is also proposing a return of capital of up to $5.0 million to qualifying shareholders through a tender offer. A Devolver spokesperson put it plainly in a statement provided to GamesIndustry.biz:

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.

Devolver isn't the first games company to learn that public markets punish the inherent unpredictability of game development. But a 96% collapse in value over five years, at a company that continued to ship well-received games throughout that period, is one of the starkest examples I've seen of the mismatch between Wall Street logic and how games actually get made. If the September 8 vote goes through, Devolver will be delisted by September 16, closing a chapter that cost the company nearly its entire market valuation to write.