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%
“We have seen from Devolver and TinyBuild that subscription is under pressure at the moment,” says Patrick O’Donnell, technology and video gaming analyst at Goodbody.
"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.”
They are in a no-win situation. If they aren’t making enough from subscriptions they can pull their games, but then they lose a massive amount of marketing and visibility. Much like Spotify and other streaming services, smaller artists just aren’t making much from these. And with the way that contracts and subscription fatigue works, it’s unlikely a competitor is going to be able to offer better deals while also attracting sufficient customers.