Tencent is buying British game studio Sumo for $1.27 billion
Tencent has announced plans to buy British video game company Sumo Group for $1.27 billion. The Chinese tech giant already has an 8.75-percent stake in the developer, as Gamesindustry.biz reports, and the offer represents a 43-percent premium on Sumo’s current valuation.
Based in Sheffield, England, Sumo’s well-regarded core studio Sumo Digital has carried out contract work for many of the biggest names in gaming. It developed Sony’s PlayStation 5 launch title Sackboy: A Big Adventure and was the primary studio behind Microsoft’s Crackdown 3 for Xbox consoles and PC. In 2017 Sumo released Snake Pass for multiple platforms, its first foray into original IP.
“The three founders of Sumo, who work in the business, Paul Porter, Darren Mills and I are passionate about what we do and are fully committed to continuing in our roles,” says Sumo CEO Carl Cavers in a statement. “The opportunity to work with Tencent is one we just couldn’t miss. It would bring another dimension to Sumo, presenting opportunities for us to truly stamp our mark on this amazing industry, in ways which have previously been out-of-reach.”
Cavers says Tencent has “demonstrated its commitment to backing” Sumo’s client work, as well as its own original IP, so things are unlikely to change too quickly. The buyout does, however, give Tencent yet another foothold in the international gaming industry, following prominent investments in companies like Epic, Riot, Activision, and Ubisoft.
“Tencent intends to bring its expertise and resources to accelerate the growth of Sumo both in the UK and abroad, supporting Sumo in the market for top-notch creative talent, and the UK as a hub for game innovation,” says Tencent’s chief strategy officer James Mitchell. “We believe the proposed transaction benefits all stakeholders, delivers compelling value for Sumo shareholders, while enhancing the Sumo business for the future.”
This would be the second billion-dollar deal involving a British game developer this year — EA completed its acquisition of racing game specialists Codemasters for a similar price in February.