The Year’s Second Major Deal Involving a British Video Game Company
China’s Tencent has become an absolute gaming powerhouse with stakes in countless gaming companies around the world, and now it’s poised to acquire British developer Sumo as well. This $1.27 billion deal will add Sumo’s racing and snooker games to Tencent’s high-profile, chart-topping portfolio of titles.
Apparently, the purchase is intended to boost Tencent‘s international presence, but the deal is coming just days after China’s market regulator prevented Tencent from merging 2 videogame streaming sites on antitrust grounds. One may get the impression that Tencent is snapping Sumo to replace this failed project.
Tencent to buy British video game company Sumo Digital in $1.27 bln deal
"The opportunity to work with Tencent is one we just couldn't miss," said Cavers, who founded the company 18 years ago
— Roberto Serrano' (@geronimo_73) July 19, 2021
According to Tencent, Sumo’s shareholders will be receiving 513 pence in cash per share, which is a 43% premium to the last price, valuing the company at 919 million pounds. This will send Sumo’s shares surging skyward by 42%–a record high for the developer.
Several have begun to comment on the acquisition, including Business Analyst Roberto Serranò and the unofficial PlayStation Studios news account PlayStation Studios News. So far, the reception of this news has been mixed, with some users refraining from offering personal opinions, some asking what Tencent is, and some worrying about the number of developers now under Tencent’s umbrella.
Tencent is the world’s second-largest videogame group by revenue after Sony, with stakes in giants such as Call of Duty’s mobile versions, Fortnite, and League of Legends. Sumo has worked with Microsoft’s Xbox, Amazon Game Studios, Apple, Google, and the BBC, and has seen its value soar over the years.
“The Board of Sumo firmly believes the business will benefit from Tencent’s broad videogaming eco-system, proven industry expertise and its strategic resources,” said non-executive chairman Ian Livingstone.
⚠️ I see a lot of people retweeted, please ignore the last sentence, further collaborations with PlayStation are possible ! https://t.co/sN6on8E02q
— PlayStation Studios News (@PS_Studios_WW) July 19, 2021
PlayStation Studios News announced the acquisition over Twitter, both celebrating the purchase and mourning the loss of any new collaborations between Sumo and PlayStation, which previously worked together on titles like Sackboy: A Big Adventure. However, the account soon posted a correction stating that Sumo would still be able to collaborate with PlayStation in the future.
How do you feel about Tencent buying Sumo? Let us know down in the comments, or hit us up on Twitter or Facebook.