Niantic Sells Game Division to Scopely for $3.5 Billion, Shifts Focus to AR and Geospatial Tech
Niantic, the company behind the global phenomenon Pokémon Go, is selling its game division to Scopely, owned by Saudi Arabia, for $3.5 billion. This strategic move will allow Niantic to focus on augmented reality (AR) and geospatial technology. For Scopely, this acquisition significantly contributes to Saudi Arabia’s ambitious plans to expand its presence in the gaming industry.
Niantic’s New Direction: Augmented Reality and AI
As part of the agreement, Niantic will distribute $350 million to its shareholders. CEO and founder John Hanke will lead a new company, Niantic Spatial, dedicated to geospatial artificial intelligence technologies. This new venture will launch with $250 million in funding, with $200 million coming from Niantic’s existing balance sheet and $50 million from Scopely.
While Pokémon Go, launched in 2016, brought immense success, Niantic struggled to replicate that magic in subsequent years. Layoffs in 2022 and 2023, along with the failure of projects like Harry Potter: Wizards Unite, negatively impacted the company’s finances. This sale allows Niantic to pivot away from the challenges of the gaming industry and focus on a different, potentially more lucrative, sector.
Scopely and Saudi Arabia’s Gaming Ambitions
Scopely was acquired in 2023 by Savvy Games, Saudi Arabia’s public investment fund, for $4.9 billion. This fund is implementing a $38 billion investment plan as part of the country’s strategy to grow and diversify its gaming sector. The Niantic acquisition further propels Saudi Arabia’s goal of becoming a global gaming hub.
Niantic’s move signals a new chapter for the company, positioning it as a significant player in the geospatial technology field. The completion of this sale is expected to reshape the dynamics of the gaming industry.