Niantic Labs, the company behind the global phenomenon Pokemon Go, has announced the sale of its gaming division to Scopely, a subsidiary of Saudi Arabia’s Savvy Games Group, for $3.5 billion.
As part of the deal, Niantic will distribute an additional $350 million to its equity holders and spin off its geospatial AI business into a newly formed company, Niantic Spatial. The new entity will be led by Niantic founder and CEO John Hanke, with funding of $250 million-$200 million from Niantic’s reserves and $50 million from Scopely. Niantic’s original investors will retain stakes in Niantic Spatial.
Niantic’s decision comes after years of struggling to recreate the success of Pokemon Go, which took the gaming world by storm in 2016. Following unsuccessful launches of other augmented reality (AR) titles, including Harry Potter: Wizards Unite, the company underwent layoffs in 2022 and 2023.
“Niantic games have always been a bridge to connect people and inspire exploration, and I am confident they will continue to do both as part of Scopely,” Niantic CEO John Hanke said in a press release announcing the deal. “I firmly believe this partnership is great for our players and is the best way to ensure that our games have the long-term support and investment needed to be ‘forever games’ that will endure for future generations.”
While Saudi Arabia is planning to become a global gaming powerhouse. Through its sovereign wealth fund, the kingdom has committed nearly $38 billion in gaming investments via Savvy Games Group.
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