Devolver Digital Acquires Astroneer Developer System Era Softworks for $40 Million

Publisher Devolver Digital has acquired Astroneer developer System Era Softworks for a total consideration of up to USD 40 million.

The news was announced through an official press release from Devolver Digital just now. The total amount of $40 million will be satisfied by a combination of cash and shares of which US$22.0 million is due as an initial consideration. According to Devolver Digital, this purchase allows the publisher to expand outside of its "core strength of premium indie titles, leveraging System Era's knowledge of Expandable Game style development, as well as its live operations technology and existing IP".

Released in 2016, Astroneer has since been played by over 13 million people and generated over $87m in revenue. "The thing that excites me the most about System Era is the cultural and strategic fit with Devolver", Devolver Digital's CEO Douglas Morin said. "This is a highly experienced, talented group of developers who come with a proven hit, Astroneer, in its eighth year.  Their know-how in Expandable Games development opens up a new player-base and revenue stream for Devolver.  We are looking forward to bringing the fun to new players in new, innovative ways - and above all welcoming the team to Devolver in coming days and months." 

System Era Works' CEO Brendan Wilson added, "Devolver and System Era have been mutual admirers for a long time. We've always seen Devolver's banner as a mark of quality, but they also represent an approach to developing and publishing games that is unique in the industry. Their developer-first orientation lets bold and unorthodox ideas thrive. We're thrilled to be joining into a confederation of like-minded people where System Era's games will get the support needed to reach global audiences, and our developers will continue to work within the culture they love."

We've included the highlights of the acquisition below, as shared in the press release:

• The acquisition represents a strategic opportunity for Devolver to expand outside of its core strength of premium indie titles, leveraging System Era's knowledge of Expandable Game style development, as well as its live operations technology and existing IP.
• Devolver will capitalise on System Era's development expertise in creating quality, community-centred, long-life titles, which it has proven through the success of its debut title Astroneer, a game that in 2022 achieved its highest annual unit sales figures
• The Acquisition adds Astroneer to the Group's current portfolio of high-quality intellectual property, alongside future titles System Era develops.
• System Era's founding team comes from AAA backgrounds, having held senior positions at Ubisoft and Microsoft, working on franchises such as Halo, Assassin's Creed and Watch Dogs, and have instilled a strong team culture that aligns with Devolver Digital.
• Total consideration of up to US$40 million is to be satisfied by US$22 million initial consideration, made up of US$20 million cash on closing and US$2 million of shares and cash to be issued on the 12-month anniversary of closing, as well as US$10 million deferred consideration, and up to US$8 million potential earn out, both payable in cash and shares. Further detail is provided below.
• Under Devolver's accounting policies, based on an estimated restatement of System Era management's unaudited numbers, System Era generated revenue of approximately US$7 million, and adjusted earnings before interest tax depreciation and amortisation ("EBITDA") of approximately US$3.8 million, in the preceding 12-months to 30 June 2023.
• Under Devolver's accounting policies the Acquisition is expected to contribute positively to EBITDA in the year ending 31 December 2024, being the first full year of ownership.

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