Today Indie-focused publiser Devolver Digital announced its financial results for the six months ended on June 30, 2023, showing some decline across the board.
The publisher has delayed some high-potential games to 2024, to ensure that the developers have the time to make them succeed. As a result the first half of the year only had 4 new releases of which only Terra Nil was major.
Devolver also declined subscription deal proposals that it felt "Undervalued the titles' value" and revenue opportunities this year and the next, resulting in lower revenues from subscriptions,
On the other hand, revenue from titles released in the previous fiscal year was up 10% and counted for 87% of total revenue in 1H 2023. Notable is the continued strong performance of Cult of the Lamb.
Revenues for 1H 2023 were down 17% year-on-year, while gross profit was down 51%. This results in an EBITDA loss of $3.5 million.
The company has cost-saving initiatives underway and expects seven releases in the second half of the year, including major games Wizard With A Gun and The Talos Principle 2, on top of Gunbrella, KarmaZoo, and Hellboy: Web of Wyrd.
Despite the loss in Q1, the Devolver is still on track to break even at the end of the year and return to profit in 2024, expecting further acceleration in 2025.
It also has 30 games in the development pipeline due to be released over the next three years.
The press release also included a comment from executive chairman Harry Miller
"The first half of 2023 was a reset for Devolver, with delays to new releases as we prioritise the quality and long-term potential of major titles scheduled for the second half of 2023 and 2024. Devolver's DNA is to commit relatively low spend on high quality titles that stand the test of time. We look forward to returning to our normal cadence of releases in the rest of 2023 and 2024 with big titles to come such as Wizard With A Gun and The Talos Principle 2, as well as The Plucky Squire and Baby Steps.
As a result of our busy upcoming release schedule, steps to improve our return from our back catalogue and active management of our cost base, Devolver is on track to meet its previous guidance of break-even EBITDA profitability in 2023, a return to profitable growth in 2024 and then an acceleration in 2025."