With this acquisition, Chinese tech giant Tencent is further expanding the number of video game development studios it has under its belt.
Sumo Digital Ltd. is a British game development studio based in Sheffield, England. It is a direct subsidiary of Sumo Group. The studio has co-developed and produced games like Forza Horizon 2, Team Sonic, Crackdown 3, Dead Island 2, and more.
In addition to the games mentioned above, Sumo also developed one of PlayStation 5’s launch titles, Sackboy: A Big Adventure. Moreover, it had also partnered with Sony Interactive Entertainment in the past to produce Go!
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Tencent has steadily been spreading its reach in the international video game industry by acquiring major stakes at multiple renowned studios. Some of those studios include Ubisoft, Riot Games, Epic Games, Activision Blizzard, Supercell, Paradox, and more. Furthermore, it also recently purchased major stakes in the German game studio Yager Development.
Although, prior to this full-scale acquisition, Tencent had already invested a minor stake of 8.75% in the studio. This $1.27 Billion worth acquisition offer includes a premium of 43% on Sumo Digital’s current valuation. Sumo CEO Carl Cavers commented:
“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.”
James Mitchell, who is Tencent’s Chief Strategy Officer, also commented:
“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.”
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