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Microsoft Gaming Revenue Declines by 7%; Sumo Digital Opens North West Studio

Microsoft

TheGamingEconomy Daily Digest brings you the trending business stories in gaming. In today’s edition: Microsoft gaming revenue declines by 7%; Sumo Digital opens North West studio; and Tencent becomes majority shareholder of Supercell.

Microsoft gaming revenue declines by 7%

Microsoft results from the first quarter of the 2020 financial year reveal that revenues generated by the company’s gaming division have fallen by USD$196m (£152m) year-on-year, which represents a decline of 7%. The decline was primarily driven by a fall in Xbox hardware sales, which decreased by 34%, with content and services revenue remaining relatively unchanged.

While the fall in hardware sales is significant, Microsoft has been prioritising development of its next console to be released in autumn next year, as well as focusing on its Xbox Live and Xbox Game Pass subscriptions. While revenue generated by this segment only increased by 1%, even minor increases represent a positive result for the Washington-based firm given the fall in Xbox One sales.

Sumo Digital opens North West studio

Sumo Group

Sumo Digital has opened its seventh UK studio with the unveiling of Sumo North West in Warrington. The new studio will be focused on “high-end engineering and code support services” to selected clients. The unveiling of the new studio comes after positive results for Sumo Group in its H1 2019 financials, with revenue of £20.8m and a pre-tax profit figure of £1.3m.

Scott Kirkland, studio director for Sumo North West, said in a statement, “The opportunity to establish a world-class team of technologists in the northwest of England with the full support and benefits of Sumo is amazing and the demand for the premium services we’ll provide is very strong. We’ve identified work that’s incredibly appealing in terms of client, project, platform profile, variety and challenge. I look forward to growing and nurturing a team that will cement Sumo’s future in the northwest’s vibrant development community!”

Tencent becomes the majority shareholder of Supercell

Tencent Logo

Tencent has become the majority shareholder of Supercell parent consortium Haiti S.A. following the acquisition of 44,000 shares generated by a USD$40m (£31.1m) convertible bond, which takes its holding from 50% to 51.2%. The consortium, which will now become an official subsidiary of Tencent, directly controls a shareholding of 81.4% of Supercell, the developer of popular mobile titles Rush Wars, Clash of Clans and Brawl Stars. The Helsinki-based firm attained revenue of USD$1.6bn (£1.24bn) in 2018, a decrease of 21% from the previous year.

The consortium, a Luxembourg-based Société Anonyme, was originally formed in June 2016 by Tencent and various undisclosed co-investors for the sole purpose of acquiring Supercell.