Sumo Group acquires game studio Lab42

Video games and entertainment creative and development services provider Sumo Group has acquired Lab42, a cross-platform work-for-hire studio which provides co-development and full game development services, for $0.6m (£0.49m) in cash.

The AIM-traded firm said the acquisition supported its growth strategy through increased capacity, adding 29 people and a strengthened presence in the “talent hotspot” of Leamington Spa.

Lab42 also added a number of new client relationships.

The business and its managing director Ed Blincoe were already well known to Sumo Group, the board said, in particular to the managing director of Sumo Digital, Gary Dunn, and the team at its Leamington Spa studio, which opened in 2019.

It said the Lab42 studio had worked on 17 projects for console, PC and mobile since it was established in January 2015.

Past and present clients included Sega Europe Publishing, Klei Entertainment, Aspyr, Ripstone, Dovetail Games and Payload Studios.

Lab42 holds an exclusive licence to use the ‘World Snooker Tour’ brand, and was the sole developer on the photo-realistic sports simulation game Snooker 19 for all major consoles and PC, published by Ripstone.

Lab42 is continuing development on World Snooker products, and was expecting to launch additional games on new devices later in the year.

Other well-known titles on which Lab42 had worked included Yakuza 0 and Yakuza Kiwami, Football Manager Touch 18, Sonic Mania, Terratech and Fishing Sim World.

The business, which operates from a single studio in Leamington Spa, was acquired from You42 - a company registered in Delaware.

Led by Ed Blincoe, the business would continue to operate under the Lab42 name as part of the Sumo Group, in the same manner as Red Kite Games and The Chinese Room.

For the year ended 31 December, Lab42 reported unaudited revenue of £1.4m.

“Lab42 is a super business and we are delighted to welcome Ed and his team to Sumo Group and to the Sumo Digital family of studios,” said chief executive officer Carl Cavers.

“The opportunity to buy Lab42, a business which is highly respected in the industry and well known to key members of our team, was both timely and compelling.”

Cavers said the addition of a 29-strong “established, proven and talented” team would help keep the firm’s organic growth ambitions on track through the Covid-19 pandemic, which, as it had previously reported, created some recruitment challenges.

“Lab42 also brings the exclusive licence to use the World Snooker Tour brand which supplements the group's strengthening own-intellectual property portfolio, along with some exciting new client relationships and opportunities.

“Sumo Group continues to operate well through the unprecedented Covid-19 challenges and the team at Lab42 has also successfully transitioned to working from home.

“The video games market is very strong and we are seeing some great opportunities to work on new games.”

At 1011 BST, shares in Sumo Group were up 3% at 189p.