According to the latest news, Tencent has announced that it is planning to buy British video game company Sumo Group at $1.27 billion. Gamesindustry.biz reported that Tencent already has an 8.75 percent stake in Sumo Group. The report also notes that the valuation Tencent is quoting is 43 percent more premium than the current valuation of Sumo.
Sumo is based in Sheffield, England. Its well-regarded core studio Sumo Digital has carried out contract work for many of the biggest names in gaming. Sumo Digital developed Sony’s PlayStation 5 launch title Sackboy: A Big Adventure, Microsoft’s Crackdown 3 for Xbox consoles and PC. In 2017 Sumo released Snake Pass for multiple platforms. It was Sumo Digital’s first foray into original IP.
Sumo CEO Carl Cavers said in a statement “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. 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.”
According to Cavers, Tencent has “demonstrated its commitment to backing” Sumo’s client work, as well as its original IP, so things are unlikely to change too quickly. However, this grants Tencent yet another foothold in the international gaming industry. Tencent has prominent investments in gaming companies like Epic, Riot, Activision, and Ubisoft.
Tencent’s chief strategy officer James Mitchell said “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. We believe the proposed transaction benefits all stakeholders, delivers compelling value for Sumo shareholders while enhancing the Sumo business for the future.”
Note that it is going to be the second billion-dollar deal involving a British game developer this yea. Previously, EA acquired racing game specialists Codemasters fin February at a similar rate.