On July 19th, 2021, the China-based tech company Tencent announced its plans to buy British game developer Sumo Group for more than one billion dollars – $1.27 billion, to be exact. Tencent Holdings Ltd. is the world’s largest video game vendor and already has its hands on some of the most influential video game developers of the century. Riot Games is one of many subsidiaries of the company, and Tencent holds shares in even more companies, such as Epic Games and Ubisoft. Tencent already owns 8.75% of Sumo, and now they plan on taking ownership of the company entirely.
In acquiring Sumo, Tencent is gaining access to a large repository of video games and intellectual property Sumo has developed over the years. Although Sumo has delved into its own IP over the past few years, such as its original game Snake Pass, it is mostly known for its work-for-hire projects. From the award-winning Sackboy: A Big Adventure to work within the Sonic franchise, the new partnership between the two companies brings many new opportunities and prospects to both.
Over the years Tencent has expressed its interest in the international gaming market and has already made several successful endeavors on this front. With strong footholds at home and abroad, owning the UK-based Sumo seems to line up with Tencent’s goals of expanding its international game development. Tencent’s Chief Strategy Officer James Mitchell announced that Tencent plans to, “…[support] Sumo in the market for top-notch creative talent, and the UK as a hub for game innovation.” Tencent already has connections with Sumo and plans on continuing its positive relationship with Sumo in the future.
Tencent is proud to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership.
Sumo seems equally as excited about their upcoming partnership with Tencent. Sumo CEO Carl Cavers stated, “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.”
If the deal goes through, Sumo will be the second UK-based game development company to have sold for more than one billion dollars this year, following EA’s purchase of Codemasters in February.
With many new opportunities coming to both Tencent and Sumo, fans can look forward to some big changes coming up in the international gaming market.