Sumo (LON:SUMO) might be one small cap to keep an eye on. This UK-based provider of video games development and design services operates out of ten studios in the UK, India, and Canada. It is more Keywords Studios or Frontier Developments (service provider) than Team17 (IP creator), but is that about to change? Sumo helps make games for some of the most prestigious publishers in the world, however an increasing number of its projects are Own-IP. A recent change in strategy reveals a concerted drive to become more of an owner of IP. This could help it generate better financial returns in the long term. Today, the group lists four strategic objectives: Generate royalties by developing franchise titles and downloadable content for clients;Win new clients through organic expansion and selective acquisitions; Develop additional services and revenue streams, possibly through acquisition; andContinue to develop Own-IP opportunities. In FY19, Sumo generated revenue of more than £16m from Own-IP. That’s more than 33% of total revenue (compared to just 10% the year before). Sumo’s business model is changing. This could be an opportunity. It is smaller than some of its peers, with a market cap of less than…
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