Pokémon Go Maker to Sell Games to Saudi Firm for $3.5bn
Niantic Labs, the company behind the global augmented reality sensation Pokémon Go, has revealed plans to sell its video game division to the Saudi-owned Scopely for $3.5bn. This marks a major step in Saudi gaming investment as the US-based firm shifts its focus to geospatial technology after facing challenges in recreating the massive success of its 2016 hit.
The sale, announced on Wednesday, further underscores Saudi Arabia’s increasing prominence in the global gaming industry, a key pillar in its broader strategy to diversify its economy beyond oil. Managed through its sovereign wealth fund under the Savvy Games Group, Saudi Arabia has positioned itself as a leading force in gaming investments, with the latest acquisition being yet another milestone.
Niantic’s Post-Pokémon Go Struggles
While Pokémon Go remains one of the most iconic and profitable mobile games of all time, Niantic has had a challenging time creating hits of similar magnitude. The company shut down Harry Potter: Wizards Unite in 2022 and laid off employees in 2022 and 2023 amid declining revenue. Despite its early dominance in the augmented reality (AR) gaming sphere, Niantic found it increasingly difficult to sustain its momentum.
With this sale, Niantic aims to refocus its operations. The financial agreement includes a $350m payout to equity holders and the launch of a new geospatial artificial intelligence (AI) venture, Niantic Spatial. This new division will be helmed by John Hanke, the company’s founder and CEO, with $250m in funding—$200m sourced from Niantic’s balance sheet and an additional $50m supplied by Scopely.
Saudi Gaming Investment Strategy
Saudi Arabia’s gaming ambitions, spearheaded by its Savvy Games Group, are no secret. The country’s strategy includes substantial investments totalling nearly $38bn into gaming-related initiatives. These efforts are aimed not only at diversifying revenue streams but also positioning Saudi Arabia as a global hub for gaming and esports.
The acquisition of Scopely in 2023 for $4.9bn set the stage for its aggressive foray into the gaming landscape. Scopely’s ownership under Saudi Arabia’s sovereign wealth fund complements other notable ventures in the gaming sector. For example, Savvy Games holds a 7.54% stake in Nintendo, solidifying its investments in historic market leaders as well as rising innovators.
With more planned investments, the kingdom continues building infrastructure and attracting talent to reinforce its position among major global gaming markets. The hosting of the Esports World Cup further cements its growing status in competitive gaming.
What This Means for the Gaming Industry
This monumental $3.5bn transaction marks a shift for both Niantic and Saudi gaming investment strategies. Niantic’s pivot to a geospatial AI business highlights a significant recalibration towards technology innovation. Meanwhile, Saudi Arabia’s gaming acquisitions demonstrate its intent to significantly impact the industry, both economically and strategically.
The sale serves as a twofold win for Scopely. With new games pouring into its impressive portfolio, its expanded capabilities under Savvy Games Group ownership give it access to substantial resources and partnerships. By leveraging its expertise as part of Saudi Arabia’s broader push to make gaming a key economic driver, Scopely is well-positioned to elevate its standing in the market.
The Future of Saudi Gaming Investment
Saudi Arabia’s gaming ambitions have been consistent, with significant resources backing up its vision of becoming the “ultimate global hub” for the industry. The kingdom’s involvement in major gaming companies and now its purchase of Niantic’s gaming catalogue suggests a forward-thinking strategy to dominate multiple facets of the gaming ecosystem.
These investments reflect not just a focus on economic diversification but also a vision to make gaming a cultural and technological powerhouse for the region. If successful, Saudi Arabia’s initiatives could reshape how gaming businesses connect with global audiences in ways not yet fully realised.
With Niantic Labs choosing to align its future with geospatial AI and Saudi Arabia gaining even more ground in gaming, the next few years will be pivotal for the evolution of the industry.
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