Tencent Betting Billions on Gaming

Issue 80

Tencent has struck a nearly $1.2 billion (£919 million) deal to buy the UK games developer Sumo as the Chinese tech company continues its multi-year-long gaming acquisition spree. Sumo, which was founded in Yorkshire in 2003, has developed games for Sony, Microsoft and Sega including instalments of the Forza, Hitman, Sonic and LittleBigPlanet franchises.

Consolidation has been accelerating rapidly in the video games industry, as console-focused publishers snap up mobile app developers and larger platforms try to secure exclusive content. Tencent’s offer of £513 per share in cash, via its subsidiary Sixjoy Hong Kong, comes at a 43% premium to Friday’s closing share price. Shares in Sumo jumped to £508 in early trading on Monday morning in London. “The board of Sumo firmly believes the business will benefit from Tencent’s broad videogaming ecosystem, proven industry expertise and its strategic resources,” said Ian Livingstone, the UK gaming veteran who serves as Sumo’s chair.  Sumo went public in London in 2017 at £100 per share.

Source: Financial Times