Chinese gaming giant Tencent will acquire gaming studio Sumo for $1.27 billion, according to a report by VGC. Although Tencent currently owns 8.75% of Sumo, if the transaction goes through, they will own 50% of the company shares.
The acquisition of Sumo would certainly help Tencent continue to broaden their reach and capacity. Sumo’s catalogue is extensive, working across platforms and gaming styles. Their most notable games include Sackboy: A Big Adventure, Team Sonic Racing, and Snake Pass.
However, as VGC notes, Tencent’s approach to Sumo will be hands off as, according to analyst Daniel Ahmad, “Tencent is acquiring Sumo Digital for its breadth of experience developing and operating AAA games and live service games… [and] will continue to support Sumo on these work for hire projects, but the company could also be an invaluable partner for Tencent as it looks to push into AAA game space itself with its own projects.
Tencent already has a large reach in the gaming landscape, notably working with Nintendo to bring the Switch to China. In addition, they currently own Riot Games and hold shares in companies like Epic Games, Activision Blizzard, Ubisoft, and more.