Niantic Labs mentioned it will promote its online game division to Saudi Arabia-owned Scopely for $3.5bn, because the US augmented actuality agency shifts focus to geospatial expertise after failing to recreate the success of its 2016 smash hit Pokémon Go.
The deal, introduced on Wednesday, additionally advances Saudi Arabia’s ambitions to develop into the “final international hub” for gaming. The dominion’s sovereign wealth fund, by way of Savvy Video games, purchased Scopely for $4.9bn in 2023 as a part of a broader push by the nation to diversify past fossil fuels.
Niantic mentioned it will distribute an additional $350m to its fairness holders underneath the deal. It’ll additionally spin off its geospatial synthetic intelligence (AI) enterprise into a brand new agency known as Niantic Spatial, which will likely be led by the Niantic founder and CEO, John Hanke.
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Niantic Spatial will likely be funded with $250m of capital – $200m from Niantic’s steadiness sheet and $50m from Scopely. All of Niantic’s authentic buyers will even proceed to be shareholders of Niantic Spatial.
The transfer follows a number of powerful years for Niantic. After Pokémon Go turned one of many profitable cellular video games, the corporate struggled to duplicate its success and needed to lay off workers in 2022 and 2023. It additionally axed the Harry Potter: Wizards Unite online game in 2022.
For Saudi, already a rising hub for gaming and residential to the Esports World Cup, the deal builds on a plan to speculate almost $38bn in initiatives associated to the business by its Savvy Video games Group.
Savvy Video games is a significant investor in international online game firms together with Nintendo, through which it has a stake of round 7.54% after a small reduce in its curiosity final yr.
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