Riot Games parent company Tencent to acquire major UK games developer

Riot Games parent company Tencent is set to purchase one of the UK’s well-known game development studios.

Chinese gaming giant Tencent has made a bid worth almost £1bn to acquire Sumo Group, which owns Atomhawk, Pipeworks Studios and Secret Mode, as well as Sumo Digital, which consists of several UK studios including Sumo Nottingham and Sumo Sheffield.

Sumo Digital has produced a range of games over the years, including LittleBigPlanet 3, Sackboy: A Big Adventure, Crackdown 3, several Forza titles and most recently Hood: Outlaws & Legends. It has also been hired by and partnered with other game companies and devs, for example it has partnered with IO Interactive on the Hitman series.

Tencent already had a stake of around 8% in Sumo Group, and this latest proposal could see it take full ownership of the UK games company. The actual bid is $1.27bn (£919m).

Tencent has a stake in many games and esports businesses, including 100% ownership of League of Legends developer Riot Games, 40% in Fortnite dev Epic Games, 5% in Overwatch dev Activision Blizzard, 5% in Rainbow Six dev Ubisoft, more than 80% in Clash Royale dev Supercell and others.

“The three founders of Sumo, who work in the business, Paul Porter, Darren Mills and I are passionate about what we do and are fully committed to continuing in our roles,” CEO Carl Cavers said in a statement, as reported by GamesIndustry.biz.

“The opportunity to work with Tencent is one we just couldn’t miss. It would bring another dimension to Sumo, presenting opportunities for us to truly stamp our mark on this amazing industry, in ways which have previously been out-of-reach.”

James Mitchell, Tencent’s chief strategy officer, added: “Tencent is proud to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership. 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-notch creative talent, and the UK as a hub for game innovation.”

Ian Livingstone, non-executive chairman of Sumo, commented: “The board of Sumo considers that the acquisition is in the best interests of all stakeholders in the company and intends to unanimously recommend this offer to shareholders. Tencent’s offer of 513p per share demonstrates the tremendous achievements of the management team, both financial and operational.”

Sumo Group employs more than 1,200 people worldwide across 14 studios. Earlier this year it was recognised as one of the Top 100 Large Best Companies to work for in the UK.

Earlier this year, EA purchased another UK-based developer: Codemasters.

Dom Sacco

Dom is an award-winning writer and finalist of the Esports Journalist of the Year 2023 award. He graduated from Bournemouth University with a 2:1 degree in Multi-Media Journalism in 2007.

As a long-time gamer having first picked up the NES controller in the late ’80s, he has written for a range of publications including GamesTM, Nintendo Official Magazine, industry publication MCV and others. He worked as head of content for the British Esports Federation up until February 2021, when he stepped back to work full-time on Esports News UK and offer esports consultancy and freelance services. Note: Dom still produces the British Esports newsletter on a freelance basis, so our coverage of British Esports is always kept simple – usually just covering the occasional press release – because of this conflict of interest.