Sumo expands South with acquisition

Sheffield-based Sumo said the deal will provide new intellectual property, creative talent and the opportunity to develop a new studio location in the south of England.

The Chinese Room is based in Brighton and is 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.

Dear Esther received several Independent Games Festival nominations and the award for Excellence in Visual Art in 2012. Sumo said the game is recognised as creating a new sub-genre of gaming, the “Walking Simulator”.

Everybody’s Gone to the Rapture, which was developed by The Chinese Room and published by Sony Computer Entertainment, won three BAFTAs amongst many other industry awards in 2015.

The Chinese Room is being sold by its founders Dan Pinchbeck and Jessica Curry.

The total consideration of £2.2m consists of a £1.6m cash consideration and £600,000 through the issue of 357,485 new ordinary shares.

The acquisition will give Sumo intellectual property rights over revenue generating games Dear Esther and So Let Us Melt until late September 2018. It will also accelerate Sumo’s own IP pipeline with the addition of two original concepts, one of which, 13th Interior, is at prototype demo stage.

Mr 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. Ms Curry has chosen to leave the business to continue her career as a composer.

Carl Cavers, chief executive of Sumo Group, 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.

“Having a studio in the south of England opens further doors for the group and we are confident that it will create exciting opportunities.”

Sumo said The Chinese Room is in a creative hot spot, giving it access to a sizeable new pool of UK development talent, and it intends to invest in the studio.

The Chinese Room is expected to generate a modest revenue on the published games, primarily Dear Esther.

Sumo 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.