Tencent acquires Sumo Digital for $1.3 billion

Sumo Digital comprises of approximately 700 employees across 5 of its teams in the U.K., with the HQ being in Sheffield. Sumo also has 8 subsidiaries; Lab42, Red Kite Games Sumo India, The Chinese Room, and PixelAnt Games. More recently (2017 onwards) Sumo acquired Atomhawk, Pipework Studios, and Secret Mode as recently as March 2021.

Perhaps best known for their work on Crackdown 3, Sackboy: A big adventure, Sonic All Star Racing and Hitman 2.

Sumo most recently released Hood: Outlaws and Legends on May 10th to mixed reviews and commercial failure, with a current daily player peak of around 100 players on Steam.

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This is my first OT so I’m sure I’ve done something wrong, but I figured people would be wanting to talk about this 😵‍💫

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Prank Lol GIF by America's Funniest Home Videos

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A fantastic team but that price is pretty surprising to me. Then again I didn’t realize that there were 700 employees there and, now that I think about it, they do work on many projects at once.

Daaamn they really liked the GOAT Crackdown 3 :weary::eggplant::hot_face::pensive::pray:

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1.3 billion, wow. So nobody at Tencent entered a car in Crackdown 3.

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Hahaha I’ve never played C3 but this was hilarious and makes me want to try it on GP.

Crackdown 3 is a very fine game if you like 3D plattforming and orb hunting. But never, NEVER ever enter a car or do one of these racing events!

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Sumo is a giant support studio which works for everyone in the industry, I find strange nobody is crying, it’s the biggest UK studios, a giant consolidation move.

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its acquisition season

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Not bad for a primarily work for hire/support studio.

Sumo has created some pretty decent games over the years.

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Gross. I was holding out hope that Xbox would grab them despite their lack of IP. Why did it have to be Tencent…

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Is there any IP involved in this deal? Maybe new IP?

I really don’t understand the price of the *multiple studios being bought here. It looks like they are a work for hire outlet so the one thing going for them is the num of devs - which they have alot of granted.

Two points here

  • Buying (num of devs) - means you are buying the responsibility of paying the salaries, overhead, insurance, equipment cost, etc - this is a significant amount.
  • People are free to leave the company - you might be able to have them agree to work for you for x amount of time.

The other question - this is unquestionably a support studio. Is Tencent buying them to support there own initiatives (likely but look at bullet two above) - this also makes any predictability in future cashflows with current cashflows very difficult to extrapolate (and thus value). Or in Tencent going to allow the studio to basically operate as is and take the equity off of earnings?

This is also out of character for Tencent to buy - Does sumo operate any live service / long tailed revenue generators? Is Tencent buying them to support there long tailed revenue generators?

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Tencent is expanding into Console and PC AAA, they’ve started establishing several in-house studios for exactly that, the coming generation and forward we’ll be seeing a lot of big projects from them, and for that, Sumo as a support studio infrastructure within the company would do them wonders. Just hope it won’t become like an Activision situation where everyone is working on one or two cashcows.

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I don’t think Tencent will stop Sumo from doing high profile support work and work-for-hire projects. That’s Sumo’s bread and butter. From Forza Horizon to Sackboy to LittleBigPlanet 3 to Crackdown 3.

download

For Crackdown 4 lol

Don’t think Sumo is the biggest problem here. :stuck_out_tongue_winking_eye:

Crackdown 4 It a meme. I know Tencent is bad with all the censorship.