Devolver Digital Aims to Go Private Again, Citing Market Pressures

In a surprising twist, indie game publisher Devolver Digital, which made its debut on the London Stock Exchange just five years ago, is looking to revert back to private company status. The board of Devolver recently shared their candid thoughts on their current situation, stating that they feel their valuation is struggling due to fundamental mismatches between the video game sector and the stock market.

CEO Douglas Morin had previously expressed hopes that going public would strengthen the company’s growth and give them the ability to nurture more amazing games while preserving their unique culture. However, it appears that the ride hasn’t been as smooth as anticipated. In their latest communications, Devolver pointed out that the gaming industry has been experiencing significant disruptions over the past few years, marked by widespread layoffs, platform changes, and general instability.

Due to these challenging conditions, Devolver Digital has found itself grappling with the pressure to meet market growth expectations, which has significantly impacted its stock valuation. They noted that the nature of video game revenue, often tied to the timing of game launches, doesn’t align well with the stock market’s desire for steady, predictable growth.

The company believes that returning to private status could not only alleviate some of the stress associated with shareholder expectations but also save them around $1.6 (approx. Rs 440) million annually. With trading activity on their shares being low, staying on the market hasn’t been beneficial either.

Devolver’s board highlighted that becoming a private entity would allow them to refocus their efforts on the long-term health of the company, rather than the demands of public investors. This shift is seen as a means to evade the unfortunate trends in the industry, like layoffs and studio closures, that have plagued the gaming scene in recent years.

A vote on whether to proceed with this transformation back to a private company is set to occur in September, and many industry observers are keen to see how this decision will unfold for Devolver and its future projects.

Note: PKR figures are approximate, based on a rate of Rs 278.00 per USD. Exchange rates fluctuate — please check the latest dollar rate for exact pricing.

As an Amazon Associate, PakGamersHub earns from qualifying purchases.