Older video game players flock to Sumo Group

Sumo has released its first own IP title, Snake Pass
Sumo has released its first own IP title, Snake Pass
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Games developer Sumo ​Group, which develops games for Microsoft, Sega and Sony, is cashing in on strong demand for video games from older players.

Video games used to be the domain of teenagers, but now the average gamer is twice that age.

Sumo’s CEO Carl Cavers said: “The old perception was that people stopped playing at the age of 21, but now the average age of a gamer is 35 and that will increase.

“You have a higher disposable income as you get older.”

He was speaking as Sumo reported material progress across the group in its first annual results since floating last December.

The Sheffield-based firm said it has seen a strong start to 2018 with full year expectations now slightly ahead of market forecasts.

Mr Cavers said the group’s success is down to the high quality of its games.

“People want to be immersed in a premium experience,” he said.

“It’s down to the quality of the products we deliver. We’ve also developed great relationships and some are 15 years old.”

The group said revenue rose 27 per cent to £30.6m in the year to December 31, driven by strong organic growth at Sumo Digital, the release of its first own IP title, Snake Pass, and the acquisition of Atomhawk, which contributed revenue of £1.3m in the six months following its acquisition last June.

The group achieved adjusted EBITDA of £8.4m in 2017, a substantial increase on the £6.0m reported in 2016.

Sumo is recruiting rapidly and took on an additional 51 people over the past four months to bring the total headcount to 534 people.

Mr Cavers said the strength of the group’s workforce in Sheffield has played a big part in the firm’s fortunes.

“Our Sheffield headquarters are great for us. We’ll be 15 years old in June. We love the heritage of working in Sheffield,” he said.

“It has a great infrastructure and is well supported by the universities. We are always looking for top drawer talent. We’ve always got vacancies.”

The video games market was worth $114bn in 2017 and it is forecast to grow by 8 per cent a year.

“It is a fast growing market and content is king. We provide that content,” said Mr Cavers.

The group is on the hunt for more acquisitions following the successful integration of Atomhawk, a multi-award winning visual design company, which services the games, film and visual effects industries.

Atomhawk has been involved in the creation of many high profile projects, including the movies Guardians of the Galaxy, Thor II and Avengers II, as well as the games Mortal Kombat, Injustice, RYSE and Killzone.

It also provides creative design and content at J.K. Rowling’s Pottermore and is a regular creative vendor for global brands such as Lego, Microsoft, Sony, Amazon, Marvel and Warner Bros.

Sumo said Atomhawk delivered a strong performance in the six months to December 31, well ahead of the board’s original expectations at the time of the acquisition.

Analyst Ashu Sony at Peel Hunt said: “Sumo reported a solid set of numbers, slightly ahead of our estimates, and we continue to see strong demand for its premium co-development services.

“We also upgrade our 2018 EBITDA (up 3 per cent to £10.3m) to reflect a heightened sense of confidence that Sumo remains attractively positioned as a premium services partner for global games publishers.”