[GIBiz] Weaker subscription deals have hit indie publishers, says analyst

[Gizmo_Duck]

I knew this would happen and this is why I don’t 100% put my faith in subscription gaming. Covid made everything seem way profitable than it was cause MAU were up like crazy everywhere. It would suck to see Devolver shut down

Smaller subscription deals and the underperformance of certain titles have had a severe impact on Devolver and TinyBuild, says stockbroking firm Goodbody.

Both companies floated at the peak of the games business in 2021 and have seen their share prices plummet over the past two years. Devolver has seen its share price drop 92% since its peak in January 2022, while TinyBuild's has fallen 95%

"The cheques coming from Sony and Microsoft are just not as big as they were. And that creates problems if you're concentrated on that side of the market.

"TinyBuild, of all of them, was most exposed. Devolver was exposed, but not quite as much."

Ultimately, however, O'Donnell feels Devolver is a business that has all it needs to turn things around.

"You have to look at the calibre of Devolver. The track record and quality of their products are almost always good. They have that hit-driven potential, which they've shown multiple times. That will be one of the key factors that will keep institutional investors in Devolver. Ultimately, they're protecting their IP. They did mention they had turned down some big subscription deals.

"Both TinyBuild and Devolver are both sitting at very cheap multiples, and there's a potential buy-out scenario here," continues O'Donnell. "There are a number of strategic investors that they've got in their businesses. Both have Netease as investors, and Sony is an investor in Devolver. These investors could look to acquire these businesses and take them off the market. Some in the market are expecting that around TinyBuild, as many of the more institutional investors have gone already."

Weaker subscription deals have hit indie publishers, says analyst

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[Gizmo_Duck]

i also feel like this is lending credence to the idea that indie games don’t really drive subscriptions, its the big AAA games that do. I remember when Stray came out it was the biggest thing of the summer, and sony didn’t get any growth in subscription numbers from it.

 

[MeachTheMonster]

GIbiz fanning those fanboy flames again

In reality very few devolver games are actually on subscription services and they say ALL their games are underperforming. And they’ve been hit by delays, and an economic downturn.

But put “subscription service” in the title and @Gizmo_Duck will run at break neck spreads to share your story

 

[Gizmo_Duck]

GIbiz fanning those fanboy flames again

In reality very few devolver games are actually on subscription services and they say ALL their games are underperforming. And they’ve been hit by delays, and an economic downturn.

But put “subscription service” in the title and @Gizmo_Duck will run at break neck spreads to share your story

Naw what will eventually happen is that subscription numbers are starting to flat line. Add on top of that the biggest payout was Microsoft because they had nothing else to put on gamepass to fill the gaps but indie and smaller titles. Now that they are going to be releasing their own games the payouts to 3rd parties will shrink with it.

 

[Mike809]

Sony about to acquire Devolver.

also , im surprised that Devolver is doing so bad. They the leaders in indie gaming.

 

[Rembrandt]

Sony about to acquire Devolver.

also , im surprised that Devolver is doing so bad. They the leaders in indie gaming.

It literally says they've delayed most of their games for the year. Are not pricing their backlog appropriately etc. They're not dying

Meanwhile, it was team17 is doing well and tinybuild is hurting because of how much they fumbled hello neighbor and the property

 

[MeachTheMonster]

i also feel like this is lending credence to the idea that indie games don’t really drive subscriptions, its the big AAA games that do. I remember when Stray came out it was the biggest thing of the summer, and sony didn’t get any growth in subscription numbers from it.

Expectations for Devolver this financial year were $115 million to $120 million, and they've had to go back to $90 million. The majority of that is the delay of big releases into 2024. I think those are decision for the right reasons, although investors won't like it in the short term.

"Also, although their back catalogue is resilient, pricing is down 5%, and that’s hurt their EBITA. And they don't have the big games they need to offset that anymore."

They discounted their own games to try to sell them. Why would Sony/microsoft not lower prices too?

Purchases and engagement are down on their games period. Has nothing to do with subscription services.

This exact same story is written without “subscription” in the title and you don’t share it. Nobody would care.

GiBiz knows where your fanboy buttons are

 

[Gizmo_Duck]

They discounted their own games to try to sell them. Why would Sony/microsoft not lower prices too?

Purchases and engagement are down on their games period. Has nothing to do with subscription services.

if that’s happening to Devolver Digital, the biggest ‘indie’ publisher, what makes you think its not happening to the smaller ones also?

Like i said, Indie games aren’t really selling subscription services. It’s not going to be lucrative long term for them to rely on them, and it was always the temporary gold rush for them. They will. Be singing a different tune after next year

 

[Diondon]

shyt, they say subscription numbers aren't going up like that
nut maybe starfield will help

 

[Gizmo_Duck]

shyt, they say subscription numbers aren't going up like that
nut maybe starfield will help

Yeah, the big AAA games help.

 

[MeachTheMonster]

if that’s happening to Devolver Digital, the biggest ‘indie’ publisher, what makes you think its not happening to the smaller ones also?

Like i said, Indie games aren’t really selling subscription services. It’s not going to be lucrative long term for them to rely on them, and it was always the temporary gold rush for them. They will. Be singing a different tune after next year

It’s hard to sell games. Lots of competition.

Devolver has tried to position themselves as a “big” publisher.

But as the story says they have no “big” games to fall back on.

that’s on them.

Other indies are doing just fine.

You just spent the last couple months talking about how larians independence is such an amazing part of their success

 

[Gizmo_Duck]

It’s hard to sell games. Lots of competition.

Devolver has tried to position themselves as a “big” publisher.

But as the story says they have no “big” games to fall back on.

that’s on them.

Other index’s are doing just fine.

Most indie companies aren’t public so we have no way of telling how well they’re doing.

Mimimi just shut down today. I loved the Shadow Tactics games

 

[Animal House]

Sony about to acquire Devolver.

also , im surprised that Devolver is doing so bad. They the leaders in indie gaming.

They haven’t dropped any piff in a minute, I know Cult of the Lamb and Shadow Warrior 3 are their latest hits but both games are hovering a lil above mid tier

I personally feel Inti Creates are better they been a hot streak

 

[Gizmo_Duck]

You just spent the last couple months talking about how larians independence is such an amazing part of their success

What does that have to do with what this thread is about? Larian isn’t relying on subscription services to make money

 

[MeachTheMonster]

What does that have to do with what this thread is about? Larian isn’t relying on subscription services to make money

Niether are these two companies in your thread