The company owns a number of studios known for producing original titles including Sumo Digital and The Chinese Room.
UK game studio powerhouse Sumo Group will no longer develop its own properties and will instead focus exclusively on co-development work.
The company shared the news in a business update and said it must balance its creative ambitions with shifting "commercial realities" to deliver long-term stability.
It explained its studios and workforce will be impacted by the transition but neglected to provide additional details.
The news comes six months after Sumo, which is owned by Chinese conglomerate Tencent, laid off 15 percent of its workforce and shuttered Canadian studio Timbre Games.
"We are committed to minimising this impact as much as possible, exploring all options to retain talent, and supporting those affected with transparency, care, and compassion," reads the business update.
"This will strengthen our position as a premium development partner, leveraging our expertise to contribute to and create great games for our clients. Whether collaborating on new or established games, co-developing games, providing specialist engineering, or porting services; we are confident in our teams' exceptional talent and our ability to thrive in this next chapter."
Sumo Group has produced a number of original titles including Sackboy: A Big Adventure, DeathSprint 66, The Texas Chainsaw Massacre, Still Wakes the Deep, and Team Sonic Racing.
It has also served as a support studio on major franchises such as Forza Horizon, Hitman, and Call of Duty.
Sumo styles itself as one of the UK's largest providers of end-to-end creative development and co-development services. It currently has 1,500 workers spread across 18 studios in the UK, Canada, India, and the United States–including Sumo Digital, The Chinese Room, Red Kite Games, Atomhawk, and Auroch Digital.
In 2021, the company was purchased by Tencent for $1.27 billion via its Sixjoy Hong Kong Limited subsidiary.
At the time, Sumo CEO Carl Cavers said Tencent had a track record of backing management teams and their existing strategies, including the "acceleration" of original franchise development.
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