‘Pokemon Go’ Maker Nears US$3.5 Billion Deal to Sell Games Unit

 

Niantic, the company behind the massive 2016 hit Pokemon Go, is reportedly in talks to sell its video game business to Scopely, a mobile game maker owned by Savvy Games Group, a subsidiary of Saudi Arabia’s Public Investment Fund. The price being discussed is approximately US$3.5 billion, according to sources familiar with the negotiations.

Key Details of the Deal:

• The potential deal would include Pokemon Go as well as other mobile games developed by Niantic.
• No official agreement has been reached yet, and discussions remain private.
• A deal announcement could happen within the coming weeks.

Background on Niantic and Pokemon Go:

Pokemon Go was a cultural phenomenon when it launched in 2016, revolutionizing augmented reality (AR) gaming by encouraging players to walk around real-world locations to catch virtual Pokemon. It remains the most downloaded and profitable AR app of all time. Despite this success, Niantic has faced challenges in replicating the same level of success with other titles. For instance, Harry Potter: Wizards Unite was shut down in 2022, and several other projects were canceled or had staff cuts in 2022 and 2023.

Niantic, originally a part of Alphabet’s Google, was spun out into its own entity in 2015. It has since expanded its focus beyond games, with products that help capture and share 3D scans of real-world locations. The company also uses the data generated by its apps to build a vast geospatial model, which applies machine learning to understand and connect millions of real-world locations globally.

Scopely’s Plans:

Scopely, acquired by Savvy Games in a US$4.9 billion deal two years ago, is looking to expand its portfolio by adding a “genre-leading” mobile title to its roster. This acquisition of Niantic would fit into their larger strategy to strengthen their mobile gaming presence, particularly as Savvy Games CEO Brian Ward described the mobile gaming sector as a key part of the company’s strategy moving forward.

Strategic Alliances and Expansion:

In August 2024, Niantic and Savvy signed a partnership to help Niantic expand its footprint in the Middle East, specifically in countries like Saudi Arabia, the UAE, and Egypt.

What’s Next?

If the deal goes through, it will mark a major shift for Niantic, which has spent the past several years focusing on both AR technology and mobile gaming. The sale to Scopely could provide Niantic with the resources to continue its broader tech initiatives, while Scopely would acquire some of the most successful mobile games on the market, including the legendary Pokemon Go.

This deal, if confirmed, could have significant implications for the AR and mobile gaming landscape, with Scopely further cementing its place as a leading player in the global gaming market.