Saudi Group Acquires Pokemon Go Maker Niantic’s Gaming Division for $3.5 Billion

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Niantic, the company behind the globally popular mobile game Pokemon Go, has announced the sale of its gaming business to Scopely, a subsidiary of Saudi Arabia’s Savvy Games Group, for $3.5 billion. The deal includes games like Pikmin Bloom and Monster Hunter Now and marks a major shift in Niantic’s business strategy.

According to a report by India Today, the agreement ensures that Niantic’s development team remains intact, allowing for continued updates and new features in its existing games. The deal also includes an additional $350 million cash distribution, bringing the total value for Niantic equity holders to approximately $3.85 billion.

Scopely, a mobile gaming powerhouse known for titles such as Marvel Strike Force and Star Trek Fleet Command, has expressed its commitment to maintaining and expanding the acquired gaming portfolio. Niantic CEO John Hanke stated, “Scopely’s focus on building and operating incredible live services, its exceptional experience working with the world’s biggest and most beloved intellectual property, and care for its player communities and game-making teams make it the perfect fit for our games.”

Ed Wu, head of Pokemon Go, reassured players that the game’s future remains secure under Scopely. He stated, “Scopely expressed a deep admiration for this community and our team. I have every belief that Pokemon Go will flourish as part of Scopely, not only into its second decade but for many more years to come.”

The acquisition aligns with Saudi Arabia’s ambitious plans to expand its presence in the gaming and esports sectors. Savvy Games Group, backed by the Saudi Public Investment Fund (PIF), acquired Scopely in 2023 and has been actively investing in the industry. Saudi Arabia has set a target of investing $38 billion in gaming as part of its Vision 2030 initiative to diversify the economy.

Industry reports highlight the growing influence of Saudi Arabia in gaming. According to data from AppMagic, Pokémon Go has been downloaded more than 1 billion times since its launch in 2016 and surpassed $8 billion in user spending as of April last year. The Saudi sovereign wealth fund has also invested heavily in companies like EA Sports and Nintendo, further solidifying its stake in the global gaming industry. The PIF owns a roughly 9% stake in EA Sports and a 7.54% stake in Nintendo, having reduced its share from 8.58% in October 2023.

Saudi Arabia’s gaming investments extend beyond traditional video games. The country hosted its first Esports World Cup last year, with plans to bring the Olympic Esports Games to the kingdom in 2027. Despite these efforts, reports suggest that profitability remains a challenge in the esports sector, as the average video game competition viewer in the Gulf region contributes just over $2 annually to the industry, according to PwC.

Niantic has been a key player in augmented reality gaming, but the company is now shifting its focus to geospatial AI. It has announced the formation of a new entity, Niantic Spatial Inc., which will concentrate on developing spatial computing, extended reality, and AI-driven applications for various industries, including logistics and tourism. The venture has secured $250 million in capital to support its future endeavors.

Niantic Spatial aims to advance spatial computing, extended reality, and AI-driven applications for enterprise and consumer use, Hanke stated. “Our goal is to lead the future of geospatial AI by building spatial intelligence that helps people better understand, navigate, and engage with the physical world.” The company will utilize its proprietary digital mapping and real-world AR technology to create solutions for industries like logistics, construction, and tourism.

Saudi Arabia’s growing influence in gaming and esports highlights its strategic push into the sector despite regulatory challenges. While the gaming industry continues to evolve, Niantic’s transition marks a major shift as it moves away from gaming to explore AI-driven solutions. Meanwhile, Scopely is expected to leverage its expertise to enhance the future of Pokemon Go and other acquired titles, ensuring continued engagement for millions of players worldwide.

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