Tencent has announced plans to buy British video game company Sumo Group for $ 1.27 billion. The Chinese giant already has an 8.75 percent stake in the developer Gamesindustry.biz reports, and the offer represents a 43 percent reward for Sumo’s current valuation.
Sumo’s prestigious core studio Sumo Digital, based in Sheffield, England, has done contract work for many of the biggest names in gaming. It developed the Sony PlayStation 5 release title Sackboy: a big adventure and was the primary studio at the back Microsoft Overview 3 For Xbox consoles and PC. In 2017, Sumo exempt Snake Pass for multiple platforms, its first attempt at the original IP.
“The three founders of sumo who work in the business, Paul Porter, Darren Mills and I are passionate about what we are doing and are fully committed to continuing in our roles,” says Carl Cavers, CEO of Sumo in a statement. “The opportunity to work with Tencent is one we can’t miss. It brings a new dimension to sumo, giving us the opportunity to stamp our mark on this amazing industry in ways that have previously been out of reach.”
According to Cavers, Tencent has “demonstrated its commitment to supporting” Sumo’s customer work as well as its own original IP address, so things are unlikely to change too quickly. However, the purchase will give Tencent another foothold in the international gaming industry by tracking significant investments in companies such as Epic, Riot, Activision and Ubisoft.
“Tencent intends to bring its expertise and resources to accelerate Sumo’s growth both in the UK and abroad by supporting Sumo in the high-end creative talent market and in the UK as a hub for game innovation,” says James Mitchell, Tencent’s Chief Strategy Officer. “We believe the proposed transaction will benefit all stakeholders, generate convincing value for Sumo’s shareholders and at the same time improve Sumo’s business in the future.”
This would be the second billion-dollar deal the British game developer took part in this year – EA completed it acquisition of Codemasters by racing game experts at a similar price in February.