The video games market is vast and fast growing with ever-increasing demand for new content.
The key growth drivers of the industry are considered to be cloud based platforms, Games as a Service (“GaaS”) in-game monetisation, changes in consumer behaviour, free to play and mobile games, esports and the rise of Asia, particularly China. Six of the largest businesses in the world, Amazon, Apple, Facebook, Google, Microsoft and Tencent actively driving growth.
Newzoo, the world’s most trusted and quoted source for games market insights and analytics, expects the global market to grow from $152bn in 2019 to $196bn by 2022.
$152 bn value of the global market
2.5bn gamers worldwide
Our competitive advantage lies in our people, technology, management systems, and scale. This gives us the ability to attract the best creative talent, which enable us to offer creative, flexible co-development and full end-to-end solutions to publishers and other content developers.
We benefit creatively, commercially and financially from our proprietary technologies, which we have developed over many years, and our global talent base of almost 1000 people in four countries.
Circa 1,000 people
12 Studios in four countries
Whilst the Group’s business model is evolving, it continues be relatively low risk with high visibility , generating both cash and sustainable profit margins through long-term contracting, typically with milestone payments, which provides the opportunity for investors to gain lower risk exposure to the attractive video games sector.
Sumo Group is rarely directly exposed to the commercial success of a game and more often benefits from upside where royalties are in place. Our aim is to accelerate the Group’s growth and increase margins, through the development of Own-IP games, either self-funded, co-funded or fully-funded, and through acquisition.
89% Contracted or near-contracted development fees for 2020
Since its IPO in December 2017, the Group has delivered consistent revenue and Adjusted EBITDA* growth of over 20% year on year.
Since 2016 the Group has achieved a revenue CAGR of nearly 34% per annum. The increase in revenue has been driven by continuing strong organic growth at Sumo Digital and Atomhawk and the acquisition of Red Kite Games at the end of January 2019. The Chinese Room, acquired in August 2018, and Red Kite Games together generated revenue of £5.8m in 2019.
Revenue CAGR per annum since 2016 nearly 34%
Overall growth in people since IPO (2017) 113%