Devolver Digital Maintains Momentum Amidst Industry Challenges

The video game industry has experienced a significant downturn in 2023, with numerous companies downsizing, laying off staff, and shutting down operations. Despite the market remaining healthy with rising game sales, the year has been particularly tough for many businesses. Devolver Digital, a well-established indie label, has not been immune to these challenges. The company's stock price has plummeted throughout the year, and several of its planned releases for 2023 have been pushed back to next year. Having gone public in November 2021, Devolver has faced a difficult couple of years. According to Graeme Struthers, Devolver's COO and co-founder, the company did not anticipate the market peak when they decided to go public. Struthers notes that Devolver benefited greatly from Team17's success, but failed to realize they were entering a peak period. The launch of three major projects between November and May did not meet expectations, and the impact of Elden Ring's release was underestimated. However, 2022 turned out to be a successful year for Devolver, with the commercial and critical successes of Inscryption and Cult of the Lamb, as well as the continued performance of Loop Hero and Death's Door. Despite this, Struthers acknowledges that the company's success may not be widely recognized due to the soft market. Devolver is focusing on each of its games and continuing to do what they do best: publishing video games. The company believes that everything will gradually return to normal, and they are not expecting a sudden change. Struthers notes that the appetite for games like Inscryption and Cult of the Lamb remains strong, and Devolver has a pipeline of new indie titles, including Stick It To The Stickman, Anger Foot, Pepper Grinder, and The Plucky Squire. The decision to delay some releases, such as The Plucky Squire, was made to ensure that the games meet their full potential. While this may mean compromising on the release schedule, Devolver believes that giving the games extra time will result in better quality and longer-term sales. Devolver's release slate for 2023 has not been empty, with titles like Terra Nil, Wizard with a Gun, Gunbrella, and The Talos Principle 2. The company is looking forward to a stacked 2024, with additional titles including Baby Steps and Neva. When asked about the challenges of signing new titles or doing their job as a publisher, Struthers replies that it is not more difficult. However, the consolidation trend in the industry has had a greater impact on Devolver's business, with several developers being approached or acquired by other companies. Devolver has also been approached by three different companies with acquisition in mind, which was a key factor in their decision to go public. Struthers explains that selling the company would have made Devolver part of another entity and tied the developers to a new parent, which was not desirable. Venture capital was also explored, but the idea was abandoned due to negative connotations. Going public seemed the best way forward, providing Devolver with the necessary funds and ability to bring studios into the company.