'Pokemon Go' maker Niantic sells game division to Saudi-owned Scopely for $3.5 billion

Niantic Labs, the U.S.-based augmented reality firm behind Pokémon Go, has announced the sale of its video game division to Saudi-owned Scopely for $3.5 billion, as it pivots toward geospatial AI technology.

The deal, revealed on Wednesday, aligns with Saudi Arabia’s vision to become a global gaming hub. The kingdom’s sovereign wealth fund, through Savvy Games Group, acquired Scopely for $4.9 billion in 2023, as part of a $38 billion investment plan to expand its gaming industry beyond fossil fuel dependence.

Niantic’s future: Geospatial AI and Niantic spatial

Alongside the sale, Niantic will distribute $350 million to equity holders and spin off its geospatial AI division into a new company, Niantic Spatial, led by CEO John Hanke. The new entity will be backed by $250 million in capital, with $200 million from Niantic’s balance sheet and $50 million from Scopely. Niantic’s original investors will remain shareholders in Niantic Spatial.

Saudi’s growing influence in gaming

Saudi Arabia, home to the Esports World Cup, has been expanding its footprint in the gaming sector. Savvy Games Group has invested billions in major gaming companies, including Nintendo, where it holds a 7.54% stake.

Niantic’s decision follows several tough years after failing to replicate the success of Pokémon Go. The company laid off employees in 2022 and 2023 and shut down its Harry Potter: Wizards Unite game in 2022.

With this deal, Saudi Arabia strengthens its position in the global gaming market, while Niantic doubles down on geospatial AI technology to shape the future of augmented reality.