Video game: Chinese giant Tencent spends more than $ 1 billion to acquire Sumo studio

Posted on Jul 19, 2021 6:35 PMUpdated on Jul 19, 2021, 6:43 PM

And one more video game company in Tencent’s shopping cart. The Chinese tech giant has acquired the entire capital of the British studio Sumo in which it already had a minority stake. The operation valued the latter 1.27 billion dollars, an additional premium of more than 40% compared to its market price at the close on Friday.

Founded in 2003, Sumo is a well-known name in the industry, the Anglo-Saxon group has produced many games (“Sackboy: A Big Adventure”, “Hood: Outlaws & Legends”, “Crackdown 3”, etc.) for the account of renowned publishers such as Electronic Arts, Activision Blizzard, the French Ubisoft and Focus Home Interactive or for console companies Microsoft (Xbox) and Sony (PlayStation).

Today, Sumo has 14 development studios in five countries. In 2020, the group saw its revenues increase by 40.7% year on year, to just under $ 100 million. Like the entire video game industry, Sumo has taken advantage of the health crisis which has further democratized the practice.

Tencent increases transactions

For its part, Tencent has established itself over the years as the world number one in the sector. And stepped up acquisitions or equity investments. In 2015, the owner of the flagship application WeChat struck hard by getting his hands on the American Riot Games (“League of Legends”) for $ 400 million, then on the Finnish Supercell (“Clash of Clans”, ” Clash Royale ”), for 8.6 billion.

In the years that followed, the company then entered in particular the capital of the creator of “Fortnite” (Epic Games) or Ubisoft. In January, the Chinese group took another 25% of the French studio Dontnod.

In the video game sector, mergers and acquisitions operations have intensified in recent weeks, beyond just Tencent. The reason ? The content war is in full swing with the current industry boom and industry giants are flocking to development studios. Sumo’s $ 1 billion buyout is the latest illustration.

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