Pokémon Go creator Niantic in talk to sell games unit for $3.5 billion

SAN FRANCISCO: Niantic Inc., the developer of the wildly popular 2016 game Pokémon Go, is reportedly in negotiations to sell its video game division to Scopely Inc., a company owned by Saudi Arabia’s Savvy Games Group. According to sources familiar with the discussions, the deal could be announced within the next few weeks and is estimated to be worth approximately $3.5 billion. This agreement would encompass the Pokémon Go title along with other mobile games developed by Niantic. However, the sources cautioned that the talks are private and there is no guarantee that a deal will ultimately be finalized.

Pokémon Go achieved global success, becoming a cultural phenomenon. However, Niantic faced challenges in replicating this initial triumph, leading to staff reductions and the cancellation of some game projects in 2022 and 2023. The company’s Harry Potter: Wizards Unite game was shut down in 2022.

Neither Niantic nor Scopely has issued a statement regarding the potential acquisition. Scopely, the prospective buyer, is a subsidiary of Savvy Games Group, which itself is owned by Saudi Arabia’s Public Investment Fund.

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Niantic was originally established as a spin-off from Alphabet Inc.’s Google in 2015. Its CEO and founder, John Hanke, previously worked in satellite mapping and led Google’s Geo product division. Pokémon Go revolutionized mobile gaming by encouraging players to explore their surroundings, using an interactive map to locate and capture popular Nintendo Co. characters. The company claims that the game holds the distinction of being the most downloaded and profitable augmented reality application in history.

The San Francisco-based company also develops other products, including tools that allow users to capture and share 3D scans of real-world environments. In November, Niantic announced that data generated through its apps had contributed to the development of a “large geospatial model,” which will utilize extensive machine learning to analyze scenes and relate them to millions of other scenes globally.

Scopely, the mobile game developer, was acquired by Savvy Games two years ago for $4.9 billion. In 2024, Savvy Chief Executive Officer Brian Ward disclosed to Bloomberg that the company intended to integrate a “genre-leading” mobile title into its portfolio via Scopely, positioning it as the cornerstone of its mobile investment strategy.

Furthermore, in August, Niantic entered into an agreement with Savvy to assist in its expansion within Saudi Arabia, the United Arab Emirates, and Egypt. The investment from Savvy is part of a larger initiative by Saudi Arabia’s Public Investment Fund aimed at diversifying its economy by investing in the video game industry.