Niantic to Sell Gaming Division to Saudi-Owned Scopely for USD 3.5 Billion

Niantic Labs will sell its video game division to Saudi Arabia-owned Scopely for USD 3.5 billion as it shifts focus to geospatial technology. The deal, announced Wednesday, marks a major move for the U.S. augmented reality company after struggling to replicate the success of its 2016 hit, "Pokemon Go."

The sale aligns with Saudi Arabia’s goal of becoming a global gaming hub. The kingdom’s sovereign wealth fund, through Savvy Games, acquired Scopely for USD 4.9 billion in 2023 as part of its broader strategy to diversify beyond fossil fuels.

Niantic will distribute an additional USD 350 million to its equity holders as part of the agreement. It will also spin off its geospatial artificial intelligence business into a new company, Niantic Spatial, which will be led by Niantic founder and CEO John Hanke.

Niantic Spatial will receive USD 250 million in funding, with USD 200 million coming from Niantic’s balance sheet and USD 50 million from Scopely. All of Niantic’s original investors will remain shareholders in the new company.

The sale follows a challenging period for Niantic. Despite the massive success of "Pokemon Go," the company struggled to maintain momentum. It laid off employees in 2022 and 2023 and shut down "Harry Potter: Wizards Unite" in 2022.

For Saudi Arabia, the deal strengthens its position in the gaming industry. The country, already home to the Esports World Cup, plans to invest nearly USD 38 billion in gaming-related initiatives through Savvy Games Group.

Savvy Games is a key investor in global gaming companies, including Nintendo, where it holds a 7.54% stake after slightly reducing its interest last year.

Niantic will sell its gaming division to Scopely for USD 3.5 billion.
The deal supports Saudi Arabia’s ambition to become a global gaming hub.
Niantic will launch a new geospatial AI company, Niantic Spatial.

Source: REUTERS