Niantic Labs is selling its video game division to Saudi Arabia-owned Scopely for $3.5 billion as the American augmented reality firm pivots to geospatial technology after failing to replicate the success of its 2016 hit, Pokémon Go.
The deal, announced Wednesday, aligns with Saudi Arabia’s goal of becoming a global gaming hub. The kingdom’s sovereign wealth fund, through Savvy Games, acquired Scopely for $4.9 billion in 2023 as part of a broader strategy to diversify beyond fossil fuels.
San Francisco-based Niantic, originally part of Google before becoming independent in 2015, will distribute an additional $350 million to equity holders. The company is also spinning off its geospatial AI business into a new entity, Niantic Spatial, led by founder and CEO John Hanke, a key figure behind Google Maps, Google Earth, and Street View.
Geospatial AI, or GeoAI, integrates mapping and AI for advanced data analysis. Niantic Spatial will receive $250 million in funding, with $200 million from Niantic’s balance sheet and $50 million from Scopely. Niantic’s original investors will retain shares in the new venture.
Niantic has faced challenges since Pokémon Go’s success, laying off employees in 2022 and 2023 and shutting down Harry Potter: Wizards Unite. Meanwhile, Saudi Arabia continues expanding its gaming footprint, planning to invest $38 billion through Savvy Games Group, a major stakeholder in global gaming firms, including Nintendo.
Source: Swifteradio.com
