Celebrated UK game developer The Chinese Room has announced it has completed a management buyout of previous owners Sumo Digital, making it independent once again.

“We are continuing to work on original IP as well as with partner IP – just as we have been with Still Wakes the Deep developed alongside VtM – Bloodlines 2 with Paradox Interactive,” studio director Ed Daly tells GamesIndustry.biz. The studio is currently working on two new IPs.

Going forward, the hope is to work on both original IP and partner projects when their visions align.

VC Firm Hiro Capital facilitated the deal. The move was described as a “boost for the British video game industry” in a statement, since the company remains UK-owned.

The future of the studio was previously unclear, after it appeared the company made layoffs based on LinkedIn notices from former employees, but wouldn’t confirm either way.

Now, Daly has confirmed there were layoffs as the studio prepared for its next step. “Yes, following the divestment process a number of roles were made redundant,” Daly says. “The specifics are confidential but the studio is currently 55 developers. Clearly this was a very difficult process as we sought a future for the studio outside of Sumo.”

No more layoffs are planned as the studio moves forward.

The management buyout was triggered by Sumo Group’s February announcement that it was refocusing its business on development services. Conversations around the studio’s next steps intensified around this year’s DICE.

“We had been working on new IP that needed investment and that was no longer possible with Sumo’s new model,” Daly says.

The Chinese Room is known for first-person narrative-centric games like Dear Esther, Everybody’s Gone to the Rapture, and Still Wakes the Deep. The Tencent-owned Sumo previously acquired the studio in August 2018.

Some behind-the-scenes changes have occurred for the studio’s leadership team. “Operating independently changes my day-to-day so we wanted to strengthen and simplify leadership roles and I’m delighted to be able to say that John McCormack is now studio creative director,” says Daly.

“John had been studio art director since The Chinese Room rebooted in 2018 and took over full director duties on Still Wakes the Deep after Dan Pinchbeck departed in 2023. John is one of the UK’s most experienced and successful games creatives, whose career includes roles at Mindscape, Bullfrog, EA, Lionhead, including as art director of the Fable games.

“Also, Ross Manton is stepping up from his role as senior executive producer on Vampire: The Masquerade – Bloodlines 2 and will now be production director for the studio.”

The studio won the New Intellectual Property award at this year’s BAFTAs for Still Wakes the Deep, with a further two awards for performers Alec Newman and Karen Dunbar. It previously won two BAFTAs for Everybody’s Gone to the Rapture.

“This management buyout allows us to scratch the creative itch of continuing to work on new, original intellectual property, but also to partner with other studios on other projects when they fit in with our vision,” Daly added in a statement.

“This is what we are doing and we want to carry on doing it, so we’re happy to carry on in this vein.”