Listed games developer swoops for ‘creative hotspot’ studio
A Sheffield-based games developer which made its debut on the stock exchange in December has acquired a Brighton-based games development studio.
Sumo Group has acquired The Chinese Room for £2.2m from its founders Dan Pinchbeck and Jessica Curry. The acquisition accelerates the Group’s own-IP pipeline and provides new intellectual property, creative talent and the opportunity to develop a new studio location in the south of England.
The net consideration is £600,000 as The Chinese Room has been acquired with approximately £1.6m of cash on the balance sheet.
The Chinese Room is an independent game development studio, best known for creating experimental first-person games such as Dear Esther, Amnesia: A Machine for Pigs, Everybody’s Gone to the Rapture and, most recently, So Let Us Melt. The business was founded in 2010 and named after John Searle’s Chinese room thought experiment.
The acquisition brings intellectual property rights over revenue-generating games Dear Esther and So Let Us Melt. It also accelerates the Group’s own IP pipeline/programme with the addition of two original concepts, one of which, 13th Interior, is at prototype demo stage.
Pinchbeck has joined Sumo Group as Creative Director of The Chinese Room and he will be issued with options over Sumo Group shares under the Company’s Long-Term Incentive Plan. Curry has chosen to leave the business to continue her career as a composer.
Sumo Group said: “The Chinese Room is in a creative hot spot, giving Sumo Group access to a sizeable new pool of UK development talent. Sumo Group intends to invest in this studio. In the short term, The Chinese Room will draw on the capacity of Sumo Group’s other studios.
“The Chinese Room is expected to generate a modest revenue on the published games, primarily Dear Esther. The Board expects that The Chinese Room and the Brighton studio will together incur a small operating loss through the remainder of 2018, as new staff are recruited, and that the business will be profitable in 2019. The capital cost of investment in the studio is expected to be relatively low.”
Carl Cavers, chief executive, said: “I am really pleased with the acquisition of The Chinese Room and that Dan has chosen to join Sumo Digital. We believe his renowned and proven creative abilities will add real value to the business. The Chinese Room has an outstanding reputation and its acquisition will enhance and extend Sumo Digital’s capabilities, as well as bringing new intellectual property and accelerating our own IP pipeline.
“This acquisition follows on from our new studio in Newcastle, which we took over from CCP Games in January this year and which is now performing strongly. Having a studio in the south of England opens further doors for the Group and we are confident that it will create exciting opportunities.”
