The Chinese technology giant Tencent has revealed its latest acquisition today in the form of the UK developer Sumo Group for $1.27 billion, according to a new report from Reuters. However, the deal isn't 100% final just yet.
Sumo Group is made up of a few subsidiaries including Sumo Digital, responsible for developing the likes of Crackdown 3, Team Sonic Racing, Sonic & All-Stars Racing Transformed and the recently released Hood: Outlaws & Legends.
Here's what Sumo's non-executive chairman Ian Livingstone had to say in the report:
"The Board of Sumo firmly believes the business will benefit from Tencent's broad videogaming eco-system, proven industry expertise and its strategic resources."
Kotaku has been told that the deal has yet to have been 100% finalised as it still requires approval from Sumo's shareholders, but assuming it all goes to plan, it should be going through pretty sharpish.
What are your thoughts on Tencent acquiring Sumo Group? Let us know down in the comments below.
[source reuters.com, via kotaku.com]
I'm shocked they are worth so much tbh lol
I think this is a missed opportunity for Xbox game studios portfolio personally.
Sumo own quite a few companies. They recently acquired Chinese Room and the company that made the snooker games (along with the licence). They also have a couple of UK branches that make different games. A diverse studio that puts out quite a few decent games. Hopefully this buyout won't negatively affect their game quality
Only decent game they have done is little big planet
I think they are a talented studio, but have mostly worked with other parties IP's, sure they have dabbled with their own IP's too, but they are not strong enough to merit a high value.
I think the purchase is solely based on the quality of their output, although it does seem to be strangely high.
I wish them good luck, I actually know someone who works for them, I hope that Tencent looks after them and gives them the freedom to create more of their own original stuff.
How long before Tencent make a console?
The amount of studios they now own is probably more than Xbox and PlayStation combined.
They also have something like 40% stake in Epic Games that could be increased in the future.
Maybe Tencent was just really drunk and made an accidental purchase because, like, Crackdown 3....crack-down-3.
@SplooshDmg I think $1.27m for 13 studios worth of staff and assets is a pretty good deal.
Sumo might not own or have access to a lot of IP's, but do you know who does? Tencent.
@VenomousAlbino yeah but Sumo has yet to come with something worthwhile. Their latest game Hood was a disaster
@Vepra nothing worthwhile? Do around 30 seconds worth of actual research and tell me Sumo Digital by itself - let alone Sumo Group as a whole - has done nothing worthwhile. I'll wait.
Damn, tencent aint messing around...
That's a shame. Let's not forget their indie hit Snake Pass, and the fact that they're pretty much solely responsible for the quality of one of Sony's last two IPs that aren't just movies you move the camera on your own: Little Big Planet/Sackboy. They also did the X360 port of Forza Horizon 2, and various platform ports of the Hitman trilogy.
Sumo was a good studio, and I fear this also means the end of LBP/Sackboy just as it was finally getting good and moving away from Media Mollecule's obsession with it being a level design suite.
Anything absorbed by Tencent vanishes into a black hole. Sumo will either end up making F2P mobile games, or exclusives for the Epic Games Store. And, really, there's nothing that can come from anything Tencent that's not designed solely for data collection, particularly in their domestic market (Remember Tencent is the primary "company" (that's more like a wing of government than a business) that runs the "social credit" (read: total surveillance) system. )
As @blinx01 brought up, at this point a Tencent console is almost a guarantee. That's going to be scary. It will instantly become the official console of China by mandate, and that market the big 3 have been chasing after will suddenly vanish entirely for a massive market. From there it will dominate all Asia except Japan. That's massive damage to Nintendo. MS and Tencent will end up in a bidding war for buying as much of the industry before the other does as fast as possible like a video game proxy for the new cold war. Tencent's console hardware will come super powerful for cheap-ish because it will be heavily subsidized by the State to brute force through competition.
MS could compete toe to toe for a long time (and probably get secret government subsidy to play in the new cold war. They're already a GSO after all). I don't know if that would topple Nintendo or not. They're resilient and quirky but their niche would erode fast. Sony would be in serious trouble. Their hardware is nothing particularly special (nor is Xbox), and their content, while beloved by their fans, doesn't sell that well, they don't have a Fortnite level hit on their roster like Tencent does, they have a bunch of arthouse games that are critically praised but merely "market successes", not runaway hits and empires in the EA sense of the word. For Nintendo it depends how hard Asia shifts way. For Sony it depends how aggressive in pricing Tencent would be in the West.
@NEStalgia I thought you were going to say "It will instantly become the mandatory console of China by mandate" 😂.
Yep, Sony is going backwards in regard to software by closing or losing the few studios that were different and doubling the cinematic experiences that reviewers seem to love so much. PS5 is going to be the Hollywood console.
@BlueOcean "PS5 is going to be the Hollywood console"
Want a PS5? It's cheap. Yeah, the trajectory I see right now, the closures of the novel studios, the ramping up of movies movies movies......I really am not seeing a desirable future for PS5 other than playing Japanese games at higher resolution than 320p on Switch. Which....does justify owning one.... BUT, buying it was also kind of insurance. There's no telling where a gen goes over 7 years. 7 years ago I thought Xbox One would be the last Xbox, MS would absolutely be out of the video games industry, and we'd all be on Push Square right now. At that point Xbox was a joke for the Sports of Duty crowd and that clearly wasn't for me. Now look at it! It's certainly possible Sony becomes awesome at some point in the generation for some reason and it becomes an amazing console. So I'll let it collect dust for 4 years and see how it goes. Kind of like I did with my PS4.....
@SplooshDmg I agree but disagree as well. Tencent is a very dangerous creature. Not just because of where they are but what they are. They're not a "company" in a traditional sense. No Chinese company is, but especially not the big ones with ties into their "security" apparatus.
OTOH, a major market consolidation is bad for everyone, and instead of halting the problem of Chinese policy, we just replicate our own insidious clone of it.
A modern version of Hitler's hauntingly truthful quote: "The greatest strength of the totalitarian state is that those who fear it, must emulate it." He was referring to the war efforts and policies the "free" countries had to invoke to oppose him, and the reality that they effectively transformed into a replica of his state in order to be on equal footing to supposedly fight it. He was right. We irrevocably shifted into becoming more like his ideal as the only way to attempt to fight against his ideal. It's happening again with China. If our only solution to the threat of their consolidated, centrist, authoritarian control of all things is to consolidate all our things into centrist, authoritarian constructs on equal footing to theirs, then we already lost, we already chose their method as the only viable method and confirmed they were right.... Racing to consolidate and centralize everything only changes the names on the list of winners. And to add to it, then China just buys controlling minority shares in those companies and walks away with the prize in the end anyway!
People baffled by the evaluation shouldn't be. A lot of Chinese companies are buying total ownership or shares within western companies (not just gaming), especially at inflated prices, are not for the interest of the company or consumers. The main reason a lot of them are buying into western companies is to launder money due to recent Chinese regulations. China buying into western companies has surged in recent years due to laundering needs.
@SplooshDmg All different shades of gray. MS/Sony/Nintendo aren't literally the government. Tencent is. But yet, the government is little more than a collection of IOUs bought and paid for by the corporations, and most legislation in the US is not written by government but by the legal departments of the corporations that just submit it to congress to their bought and paid for rep/senator. Microsoft and Google may not be the government, but they did draft the DMCA which governs the IP laws. Shades of gray. And again, the worse part, who owns the companies? Take a look at the minority controlling shares China has bought into in MOST corporations. Are there really many companies left not largely controlled by China anyway? If the US government is controlled by the corporations that buy them, and the corporations are controlled by China that controls their boardrooms, then China technically is the government and the corporations, redirected through a smoke screen. Handfuls of corporations, especially GSO contractors, which includes Microsoft, but not Sony or Nintendo, are not minority-controlled by China. But there's few of them. That's been Chinas strategy for a while. Buy minority stakes that are controlling shares - gives them total control of the companies without being listed as a majority stakeholder and therefore lets them control from the shadows off the radar. The public would be going hysterical if they understood the total control China has over the majority of all business already.
I do think "every studio dreams of 1st party budgets" but those are the creators that spend people's money on what they want, not the business minded people that understands what has to happen to make that work. When MS bought Rare and ran them into the ground, they had first party budgets. Everyone that mattered headed for the hills. Same for Bioware at EA, and most other big buyouts. Those budgets come with leashes the creatives don't think about until they're tied to them. Not so much current MS under Spencer. But Spencer won't be there forever. And for every Spencer there's 4 Matricks & Koticks in the waiting. Except Kotick is beholden to his Tencent masters.....because of course.
@SplooshDmg I'm a fatalist. The lesser evil, the greater evil, who cares which kills me, I won't care when I'm dead. I'm very against China, obviously, but can't at all support emulating them to stop them, because the result of either outcome is effectively the same. The king is dead. Long live the king!
I honestly thought Sumo were a reliable choice to have a go with Banjo.
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