Niantic in talks for $3.5B sale of Pokémon Go to Saudi-backed Scopely

Source Cryptopolitan

Niantic, the game studio behind Pokemon Go, is reportedly in talks to sell its entire gaming portfolio to Saudi-owned Scopely for $3.5 billion. The deal will see the Saudi-backed gaming outfit add to its rapidly expanding portfolio and increase its influence on the gaming scene.

Niantic, the Pokemon Go maker, has been facing serious financial hurdles that have interrupted the company’s operations over the last few years. The company’s woes have resulted in shifting its approach to try to become profitable again. 

Scopely reportedly acquires Niantic in a $3.5 billion deal

According to a Bloomberg report, Scopely, the Saudi-backed video game development and publishing company, is in talks to acquire Niantic. Once the deal is fully materialized, it will reportedly be revealed within the upcoming weeks. The acquisition will see Scopely acquire Niantic’s entire gaming portfolio, which includes titles such as the commercially successful augmented reality (AR) game Pokemon Go and other mobile games such as Monster Hunter Now, Ingress, and Harry Potter: Wizards Unite.

The report comes after Niantic has been publicly noted for struggling to match its earlier success with Pokemon Go. While Pokemon Go became a global sensation that remains profitable to date, Niantic has been unable to mirror the anime-based game’s success with other titles, such as Harry Potter: Wizards Unite. As a result, projects such as Harry Potter: Wizards Unite were shut down. Additionally, Niantic has suffered financial difficulties and staff layoffs that have, in turn, led to the cancellation of many projects between 2022 and 2023. 

Niantic’s positioning in the market has also been around its identity as a technology company specializing in AR and geospatial data. The company was originally spun out of Google’s parent company, Alphabet, in 2015, a project helmed by John Hanke, former head of Google’s Geo product division. The company has since continued with the development of AR tools and 3D mapping technology to create a large-scale geospatial model. The move to offload its gaming IPs is perceived by industry players as a move to shift the company’s focus back to its tech-development background.

Scopely’s interest in the deal is attributed to its parent company’s Savvy Games Group strategy. Savvy Games was acquired for $4.9 billion by Saudi Arabia’s Public Investment Fund (PIF) in 2023. Savvy Games CEO Brian Ward had also publicly stated that the company was looking to expand its mobile gaming portfolio in 2024. Savvy Games has also previously worked with Niantic on a deal to expand Pokemon Go in the MENA-3 region. The signed memorandum of understanding would see the two companies expand Pokemon Go in the UAE, Egypt, and Saudi Arabia in 2024.

Gamers react to the Niantic deal

Gamers online quickly penned their responses to the reported Niantic acquisition by Scopely. Some gamers said that the decision to sell Niantic’s portfolio surprised them. The gamers also supported the sale by stating that it was needed to help infuse some much-needed financial assistance into the gaming industry. The gamers pointed out Niantic’s struggles due to lacking finances as reasons why the decision should be welcomed, as Niantic had come a long way from its Google subsidiary Ingress days.

“Niantic’s been stumbling lately, so maybe a change is what Pokémon Go needs. Hopefully, Scopely can inject some fresh ideas and fix those avatars everyone’s complaining about. Anything would be better than the current state.”

~ Simon P

However, some gamers were quick to question the sale due to Savvy Games’ involvement. The gamers questioned the Saudi-backed company’s growing influence over the gaming industry, which had previously led to some games being banned in the country. Saudi Arabia had banned games such as Grand Theft V and The Last of Us Part 2. Some gamers questioned the safety of their geo-data and Savvy’s monetization policies, saying that they might stop playing Pokemon Go as a result.

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