• Niantic Labs sells its gaming division to Saudi Arabia’s Scopely for USD 3.5B, advancing the Kingdom’s ambitions to become a gaming hub.
• The deal follows Niantic’s struggles post-‘Pokémon Go,’ including layoffs and game cancellations, as it pivots towards geospatial AI innovations.
• Saudi Arabia is strengthening its gaming industry through major investments, aiming to establish itself as an esports and gaming hub.

Pokémon Go

What happened? Niantic Labs announced that it would sell its video game division to Saudi Arabia’s Scopely for USD 3.5 billion. Niantic labs is a US augmented reality firm which had great success with the release of Pokemon Go in 2016. Furthermore, this deal aims to advance Saudi Arabia’s ambitions to become a hub for gaming. 

Why now? This comes after several tough years for Niantic, during which they had to lay off employees in 2022 and 2023. The company struggled to replicate its success after ‘Pokemon Go’ became a successful game. Furthermore, it cancelled its development of the “Harry Potter: Wizards Unite” video game in 2022.

In a statement, Ed Wu, who leads the Pokemon Go team at Niantic expressed that “”I won’t say that Pokémon Go will remain the same, because it has always been a work in progress.But how we create and evolve it will remain unchanged, and I hope that we can make the experience even better.”

What does this mean for Niantic? Niantic said that it would distribute an extra USD 350 million into its equity holders under the deal. Additionally, it will spin off its geospatial AI business into a new firm called Niantic Spatial which will be led by Niantic’s founder and CEO John Hanke. 

Niantic Spatial will be funded with USD 250 million in capital with USD 200 million from Niantic’s balance sheet and USD 50 million from Scopley. Moreover, all of Niantic’s original shareholders will continue to be shareholders of Niantic Spatial.

Gaming Industry

Why does this matter? This deal is the latest step Saudi Arabia took to develop its gaming industry. Furthermore, the Kingdom is currently working towards being a hub for gaming and home to the Esports World Cup and this deal builds on its plans to invest almost USD 38 billion in initiatives related to industry through its Savvy Games Group. 

 Who are they? In 2022, the Saudi sovereign wealth fund, the Public Investment Fund (PIF) launched the Savvy Games Group (SSG) as a gaming and e-sport company. It launched in alignment with the Kingdom’s goal to advance in the digital economy. In 2023, the PIF via Savvy Games bought Scopley for USD 4.9 billion. Scopely is one the biggest names in mobile gaming with its most successful game being ‘Monopoly Go’ which generates more than USD 3 billion in revenue. Additionally, Savvy Games is an investor in other global video game companies including Nintendo in which it has a stake of around 7.54%.