Niantic Labs said it would sell its video game division to Saudi Arabia-owned Scopely for $3.5bn, as the US augmented reality firm shifts focus to geospatial technology after failing to recreate the success of its 2016 smash hit Pokémon Go, The Guardian reported.
The deal, announced on Wednesday, also advances Saudi Arabia’s ambitions to become the “ultimate global hub” for gaming. The kingdom’s sovereign wealth fund, via Savvy Games, bought Scopely for $4.9bn in 2023 as part of a broader push by the country to diversify beyond fossil fuels.
Niantic said it would distribute an extra $350m to its equity holders under the deal. It will also spin off its geospatial artificial intelligence (AI) business into a new firm called Niantic Spatial, which will be led by the Niantic founder and CEO, John Hanke.
Niantic Spatial will be funded with $250m of capital – $200 from Niantic’s balance sheet and $50m from Scopely. All of Niantic’s original investors will also continue to be shareholders of Niantic Spatial.
TechCrunch reported: Mobile gaming giant Scopley on Wednesday said it has agreed to acquire Pokémon GO maker Niantic’s gaming division for $3.5 billion. Niantic said that it will add an additional $350 million cash to yield a total value of $3.85 billion to Niantic equity holders.
Niantic’s games roster include the hit Pokémon GO, which has more than 20 million weekly active player; Pikmin Bloom, a walking game introduced in 2021; Monster Hunter Now, an AR game released in 2023; Campfire, a community interaction platform; and Wayfarer, a tool to contribute new map locations across Niantic games.
Niantic said it will now focus on building real-world 3D maps through a new standalone entity called Niantic Spatial that will be led by the company’s CEO and founder John Hanke. As part of the deal, all employees working on Niantic’s games will join Scopely, which has a workforce of 2,300.
Niantic has released several titles in recent years that were received well, but it has struggled to match the success of Pokémon GO. Even Pokémon GO players have complained about the rise of paid content and elements in the game in recent months.
Following the pandemic, the company discontinued some high-profile projects, including NBA, Harry Potter, and Marvel games, and has laid off hundreds of employees over the past few years.
BBC reported: Saudi Arabia’s Public Investment Fund (PIF) will pay $3.5bn (£2.7bn) to buy the gaming division of developer Niantic, whose titles include the hit mobile game Pokémon Go.
The game involves player walking around in the real world to hunt the collectable creatures, which appear on their phone screens using augmented reality.
Despite launching almost a decade ago, Pokémon Go is still among the highest-grossing mobile games in the world, with 30 million monthly players.
The deal marks the latest step by Saudi Arabia to develop its gaming industry, which it has spent billions of pounds on in recent years.