The survival of Sackboy and Crackdown developer Sumo Digital

What the report says

Listen now on Apple, Spotify or YouTubeIn This Edition,Sumo’s Andy Stewart and Gary Dunn on…Avoiding ‘race to the bottom’ in outsourcingImportance of IndiaUK tax relief reformsPlus, AI, Sackboy, AAA games and moreFive years ago, Sumo Digital was a BAFTA-winning developer and publisher that Tencent bought for nearly $1.3 billion.It had become the home for the Sonic racing series and the stewards of PlayStation’s Sackboy/LittleBigPlanet franchise. It was aggressively developing its own IP, and had acquired and set-up studios around the world.Five years on, and Sumo has scaled back significantly.

It’s no-longer in charge of the Sonic racing games. There’s no sign of a new Sackboy title. It’s sold off its publishing label, and returned to working on third-party brands and franchises.“Nine years ago, around 80% of our revenue was two or three clients,” explains Sumo Co-CEO Andy Stewart. “The Microsofts and Sonys of the world. And obviously after the Tencent acquisition, it’s no secret that large publishers started reining in on what they were spending.”He adds: “The appetite for risk and investment for large, big budget AAA games, the sorts of games that we were doing five, six, seven years ago, those $50 million budget games… we haven’t seen one of those come through the door for a long time.

But what we are seeing is an appetite in that AA space, with a $15 million budget.”Fellow Co-CEO Gary Dunn continues: “Five years ago it was $50 million games, you just don’t see an RFP [request for proposal] for anything like that anymore. It literally does not exist. So, it’s about making great games at a lower price point.”In today’s edition of The Game Business Show, Dunn and Stewart talk us through where Sumo is today. It is still making full games, but at a $15 million level rather than $50 million. And that involves finding ways to make things cheaper.“There’s a bit of a race to the bottom in the development industry at the moment,” Stewart says.The UK studio hasn’t completely abandoned developing its own IP, either.“It’s a bit of a misconception that we’re not doing our own IP still, and that we’re not doing full games,” Stewart tells us.

Key details

“Sumo’s definitely very much in the full game, business and we’re also doing our own IP. What we’re not doing is fully funding our own IP. That’s the key nuance, and that’s where co-funding comes in.”Sumo is actively looking to identify legacy brands that might be viable for a new title. And if the IP owner is not able to fund a new project, the company is able to take on some of that financial risk.“Remember, we were a publisher, so we have a lot of market data, and we’ve used that to start analyzing which IPs we should proactively pitch for,” Dunn explains.

“There is a whole package of work that we’re doing now where we’re analyzing an IP and saying, ‘right, this is an IP that’s done these sales in the past. There’s no known development for it, and it interfaces with our excellence.’ That could be horror, family, platforming, adventure. And where we can see that intersection, we’re happy to co-fund. We’re happy to create that commercially viable win-win proposal for the publisher.”You can hear more about Sumo’s attempts to navigate the current game industry, the challenges facing outsource companies, the role of AI and more in our full interview above.

Alternatively, check out some selected stories below.If you’re a PC studio selling on Steam, you already have the players: you just don’t have a direct line to them.More than 1,000 PC studios have added a direct sales channel to change that, alongside Steam, not replacing it. Building real relationships with their communities and growing revenue along the way.Market data from this year’s biggest premium PC releases found that up to four in ten Steam reviews came from players who bought the game elsewhere, proof that Steam’s discovery and social pull holds even off-platform.Xsolla’s new ebook explains exactly how the hybrid model works, what Steam’s rules allow, and how to set one up without months of engineering.Download it for freeSumo Digital has made no job cuts in IndiaSumo Digital is based in Sheffield in the north of England, with other offices scattered across the country.

More from the announcement

Sheffield isn’t a particularly expensive place to run a business (it’s certainly not California) but it’s more expensive than some countries, particularly in Asia and Eastern Europe.This is a challenge for a co-dev and work-for-hire studio like Sumo, which can find itself being undercut by similar studios in more affordable parts of the world.