Tencent will buy British video game developer Sumo for a $ 1.27 billion during the pandemic online at home to achieve new high scores.
Sumo and Sixjoy Hong Kong, a subsidiary of Tencent, announced the deal earlier this week. Mount Emei Investment, another subsidiary of the Chinese billionaire Ma Huateng s Tencent already owns about 8.75% of sumo.
Bans and social distancing accelerated a global market leap in gaming. According to market research firm Strategy Analytics, the global gaming market is expected to grow from 150 billion US dollars in the previous year to 250 billion US dollars by 2025.
âSumo offers Tencent one n world class game developer with global reach outside of China at a low cost, âsaid Neil Mawston, Executive Director, Strategy Analytics. “Sumo is recognized in the UK as one of the best game developers in Europe, working with Sony, Sega and others.”
Sheffield-based Sumo expects Tencent’s “broad video game ecosystem, proven industry expertise and strategic resources, which will help secure and foster the aspirations and long-term success of sumo, “said Ian Livingstone, Sumo’s non-executive chairman, in the announcement.
The benefits would work both ways. “The acquisition of Sumo will add significant gaming content to Tencent, both for the large Chinese gaming market and for its global business,” said Rajiv Biswas, chief economist Asia Pacific at research firm IHS Markit. Sumo’s games include Hotshot Racing and WST Snooker.
Tencent sumo isn’t the only deal chasing the popularity of online games, notes Chris Marshall , Associate Vice President for IDC Asia Pacific. Marshall names “a number of major M&A deals” over the past two years, based on the growth of gambling in the Covid-19 era.
The popularity of online gambling is expected to decline after the pandemic, but don’t go back that far, younger people like to pass the time and 5G mobile technology makes gaming easier. Most new players are expected to keep playing and 75% of the recent net increase in games will keep up with them, IDC can be found in a survey .
“When the companies reopened worldwide after the pandemic is expected to lead to some decline in online gaming, most of the market growth is expected to continue and will continue to grow rapidly in the medium term, “says Biswas.” Major growth drivers in the global online gaming market will be the global adoption of 5G as well be the ongoing shift in entertainment preferences towards gaming among Generation Z youth. ”