Tencent buys Sumo for $1.27 billion, will take hands-off approach

Tencent has acquired yet another games company, this time with UK developer Sumo Digital.

Tencent has purchased Sumo Digital, the developer behind games like LittleBig Planet 3, Sackboy: A Big Adventure, and Crackdown 3, for $1.27 billion (£919 million). Tencent paid a 43% premium over Sumo's pre-buyout share value.

Sumo has demonstrated clear expertise with diversified third-party and owned IP partnerships, and Tencent says it will take a hands-off approach with business. Sumo will "maintain the independence of its high quality existing turn-key, co-development and work-for-hire projects" while Tencent invests cash into the team and projects when needed. The Chinese firm says it wants to help Sumo create more wholly-owned IP that can be stretched across multiple geographies and platforms.

Sumo Digital key stats

• 13 studios
• 2020 annual revenue of 6.8 million euros
• 1,084 employees
• 500,000 euro revenues from wholly-owned IPs

Games developed by Sumo Digital

• Sackboy: A Big Adventure
• Crackdown 3
• LittleBig Planet 3
• Hotshot Racing
• Two Point Hospital
• Football Manager 2021

"We hold Sumo's team and the games they produce in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years. 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 top-tier creative talent, and the UK as a hub for game innovation."

Tencent's growth aims for Sumo will be underpinned through its investment in Sumo's employees and, in addition, will actively evaluate ways to accelerate Sumo's growth via selective acquisitions.