Five years ago, Sumo Group was relentlessly expanding into a UK publishing powerhouse. After years of successful work-for-hire and co-development work on titles from Dead Island to Sackboy: A Big Adventure, the company steadily acquired other studios, including co-dev specialists Red Kite, Lab42, and PixelAnt and indie teams The Chinese Room and Auroch Digital. A push into developing its own IP began with 2017’s Snake Pass, born from an internal game jam, and in 2021 it launched Canadian dev Timbre Games and in-house publishing label Secret Mode.
Then, the world changed. The post-COVID downturn gripped the industry. Tencent, which purchased Sumo in 2021, became increasingly assertive with its portfolio, and Sumo changed direction. In June 2024, the firm announced it would be laying off 15% of its staff. In February 2025 it said it would refocus “exclusively on development services for partners”. Over the course of that year it divested The Chinese Room, Secret Mode, Timbre Games, Auroch Digital, and the Polish branch of PixelAnt, with the firm’s original founders departing in the summer. Last month, it announced another round of redundancies across the staff that remain.
The latter process is still ongoing when GamesIndustry.biz sits down to talk to co-CEOs Gary Dunn and Andy Stewart, and they won’t give details, citing the need to support staff during the ongoing consultation. “There has obviously been a shift in the games industry in recent years,” says Stewart. “Like many gaming businesses, we have had to make some tough decisions along the way. However, Gary and I have been in our roles since last summer. We’ve stabilized the business in what we think are quite unstable times. We now have a clear vision for how Sumo fits into the new world.” It’s a vision focused squarely on other companies’ IP.
Funding and games
Bloomberg previously reported that the idea to step back from in-house IP originated from Tencent, but Stewart says it was a direction that “Gary and I were very supportive of. It wasn’t a Tencent directive as such. It was something we’d been thinking about for a while, and it came after a run where we thought, ‘we really want to focus on our core business.'”
“We worked really hard to make sure that each one of our divested studios found the most suitable home. And Tencent were really supportive of that approach. Secret Mode I think is a really good example, because we found them incredible owners in Emona, who appear to be giving them the right investment and attention that Sumo just wasn’t going to be able to do with our current strategy. The great thing from that is that [Secret Mode] is now one of our partners, and we’re really excited to be working with them on several full game projects.”
What’s left is still “one of the larger UK development houses” – Stewart will not be drawn on the total staff reduction – but with a narrower focus on its prior specialisation of co-development and work-for-hire across a variety of disciplines, including visual development and porting alongside full development. The firm disputes the assertion that it’s not creating new IP, though. The distinction, says Dunn, is that the firm stopped working on IP it funds itself. “We still do new IP. We still continue to make whole games for people. We’re doing two for Secret Mode at the moment, Nutmeg! and Tabitha, we’re working on other large full games for other clients and their IP. We’re still very much a full game developer.”
Dunn says that while Secret Mode and the other studios “were very focused on their own IP, things that Sumo needed to fund,” the slimmed-down Sumo Group has “leaned into our strengths of the past two decades, which is being creatively excellent with other people’s IP and creating other IP for other people.”
That strength – proven by the prior work on games like Hogwarts Legacy and Fallout 76 – is now bolstered by the firm’s publishing experience, Tencent support, and, in some cases, bank balance. “Creating Secret Mode, we learned so much from it,” says Dunn. “Sitting in a publisher’s chair has helped us. And also we’re backed by the entire Tencent market dataset. So what we’re looking to do now is proactively identify where our excellence matches with a partner’s IP and we can create a commercial, data-based business case to take to a publisher.”
“What Gary and I are really focused on is that kind of client service aspect of game development,” says Stewart. “Listening to our partners, but also bringing them opportunities that they weren’t potentially thinking of, and solutions to problems they maybe didn’t think they had.” That includes, says Dunn, solutions that publishers “may not have been able to fund, because in the right circumstances, we’ll be more than happy to co-fund it.”
“Wouldn’t it be great if the team that made Sackboy: A Big Adventure could go and reimagine Crash Bandicoot?”
“We’ve come out of principle risk, but we’re happy to share risk because I think that’s really important. I want to create a new way of working whereby we are really invested financially as well as creatively, so we’re all genuinely looking for the same outcomes. We’ll be talking to our partners at GDC about how we want to do that, we’re currently in the process of identifying those IPs. I mean, wouldn’t it be great if the team that made Sackboy [A Big Adventure] could go and reimagine Crash Bandicoot? “
The nature of funding Sumo offers is flexible, says Stewart, depending on what works for each partner. “It could be something like a reduced rate. It could be a deferred cashflow. It could be a full investment or partial-but-significant investment in the product itself. We’re trying to be creative.”
“Some of our clients, they don’t want to give a royalty away, they just want to work with us on a work-for-hire basis. Some of our clients really appreciate [our having] that kind of skin in the game and having a developer that really aligns to their vision.” Sumo currently has “two or three” projects in development at the moment, and will be meeting more potential clients at GDC.
Scaling to suit
It will be touting a broad skillset. Alongside its established reputation in co-dev Dunn highlights the firm’s work building accessibility options for Fallout 76, and that the firm is in conversation with a number of partners about building experiences in Roblox. “Platform-agnostic means a different thing than a few years ago,” says Stewart. “Roblox is definitely something that can’t be ignored, and we have teams that are very capable in that.”
“We have experiences there that we’re trialling now,” says Dunn. “We’ve got a lot of experience in mobile gaming through the Midoki acquisitions, they’re part of the Leamington studio now. We still run Knighthood and Plunder Pirates successfully. We understand long-term gaming, we understand varying platforms. We’ve been very conscious about the capabilities we’ve nurtured. We try to wrap an offering around each partner and say, ‘wherever you want to go, we can go with you.’ Roblox and mobile are all part of that service that we provide.”
“Roblox is definitely something that can’t be ignored, and we have teams that are very capable in that.”
Sumo’s experience extends from titles like Human Fall Flat all the way up to live-service titles like Warframe from Tencent stablemate Digital Extremes – an arrangement that Dunn says the studio “had to earn.”
“It doesn’t come along automatically,” he says. “We’ve cultivated the relationship. And it’s a great example of how our business has changed and how our co-dev experience has had to change with it.”
“One of the dominant factors of the industry the past five years is that more gaming dollars have gone into fewer franchises. What that means for a company like us is we have to work with those big IPs and integrate into that live ops phase and that game-as-service phase, which is precisely how we’ve partnered with Digital Extremes. And we’re really pleased that it’s a growing team.”
Both see Sumo pitching to the full range of developers and publishers, which are currently navigating an industry landscape that is much more challenging. “Publishers are reacting to the change in player behaviour, and they’re focused more than ever towards their established IP – away from high risk new game launches – and also mitigating the rising cost of AAA development,” says Stewart. “If we invest in established IP, then it might be through post-launch content, live services, or it could be full game remakes and remasters are maybe seen as a safer bet.”
“The new IP, new game reimaginings, they do still exist. They are still out there. We’re having lots of conversations with clients on some really exciting new projects, but budgets are smaller, and we’re having to adapt to that. And we are really well suited as a business to be able to be quick and agile and bring games to market on low budgets, but also then be ready to scale when we find that success.”
The sense is of a business that has taken some hard knocks, but is convinced that it’s in a position to serve a development landscape that has changed radically in recent years, with skills to meet both live-service behemoths and indie startups. “We are confident we’ve found our place in the new world of gaming, and we are also able to scale from where we are today as well,” says Stewart. “We are confident in the future, and we are set up well to go again.”
