Devolver Rejected Deals To Include Games On Subscription Services, As Offers Reportedly Get Smaller
Stockbroking firm Goodbody analyzes the challenges faced by Devolver and TinyBuild due to subscription deals and underperforming titles.
By David Wolinsky on
Subscriptions are becoming a more prominent part of the games industry, but smaller subscription deals and the underperformance of certain titles have significantly affected Devolver and TinyBuild, according to a report by stockbroking firm Goodbody (via GamesIndustry.biz).
«Subscription is under pressure at the moment [at Devolver and TinyBuild],» said Patrick O'Donnell, technology and video gaming analyst at Goodbody. «The checks coming from Sony and Microsoft are just not as big as they were.»
On Devolver's part, this could in part be explained by the company's latest financial results, ending June 30 and released Monday: In addition to delays on «high-potential titles,» the company self-reports that it «declined subscription deal proposals that undervalued the titles' values and revenue opportunities… resulting in lower subscription revenues.»
Following its 2021 initial public offering, Devolver experienced a 92% decline in its share price after hitting its peak in January 2022. Nevertheless, O'Donnell remains optimistic about the company's 2024 title Human: Fall Flat 2 having strong potential, as «the figures for that are overwhelming.»
TinyBuild's situation is slightly bumpier, with a 95% decrease in share price for the same period, in part due to the disappointing performance of Hello Neighbor 2. Over the summer, TinyBuild issued a profit warning in its June financial report. Citing increased development costs, TinyBuild also announced it would be moving away from publishing third-party titles and focus on games from its in-house teams, with plans to «invest in
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