Competing With Big Game Companies, Tencent Acquires Sumo

Tencent's headquarters in Shenzhen, China. (photo: unsplash)

JAKARTA - Tencent has announced plans to buy British video game company Sumo Group for 1.27 billion US dollars (Rp 18.5 trillion). The Chinese tech giant already owns an 8.75 percent stake in the developer. According to reports Gamesindustry.biz, the offer represents a 43 percent premium on Sumo's current valuation.

Based in Sheffield, England, renowned Sumo core studio Sumo Digital has done contract work for many of the biggest names in the gaming world. They developed the Sony PlayStation 5 game Sackboy: A Big Adventure and are the lead studio behind Microsoft's Crackdown 3 for Xbox and PC consoles. In 2017 Sumo released Snake Pass for multiple platforms.

“The three Sumo founders, who have worked in this business, Paul Porter, Darren Mills and I are passionate about what we do and are fully committed to continuing our role,” said Sumo CEO Carl Cavers.

“The opportunity to work with Tencent was one we couldn't miss. This will bring another dimension to Sumo, presenting an opportunity for us to truly make our mark in this incredible industry, in a way that was previously unattainable,” added Cavers.

Cavers said Tencent has "demonstrated its commitment to supporting" the work of the Sumo client, as well as its own original IP, so things are unlikely to change too quickly. However, the purchase gave Tencent another foothold in the international gaming industry, following leading investments in companies such as 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 the best creative talent, and the UK as a hub for game innovation," said Tencent chief strategy officer, James Mitchell.

“We believe the proposed transaction benefits all stakeholders, provides attractive value to Sumo shareholders, while enhancing Sumo's future business,” said Mitchell.

This will be the second billion-dollar deal involving a British game developer this year after EA completed its acquisition of racing game specialist Codemasters for the same price last February.