Pokémon Go maker Niantic sells its game division to Saudi-owned Scopely

Niantic Labs just announced that it has found a buyer for its game division after putting out feelers back in February. The Saudi Arabia-owned company Scopely has agreed to purchase the division for $3.5 billion. Scopely was founded in Los Angeles but was purchased using money from Saudi Arabia's sovereign wealth fund, otherwise called the Saudi Public Investment Fund (PIF).

The agreement includes most of Niantic’s portfolio of AR games, including Pokémon Go, Monster Hunter Now and Pikmin Bloom, among several others. It also includes the company’s social companion apps for Pokémon Go, Campfire and Wayfarer. The deal is still subject to regulatory approval and other closing conditions.

Scopely says it will receive “Niantic’s entire team of exceptional gamemakers and category-leading games.” There are a couple of titles, however, missing from this purchase. Niantic Labs will retain the AR gaming titles Peridot and Ingress.

Scopely is a major player in the mobile games industry. It’s the company behind games like Star Trek Fleet Command, Marvel Strike Force and Monopoly Go!, to name a few.

As for Niantic’s games division, it’s a shadow of its former self. Pokémon Go engaged more than 500 million players in its first year, but the game’s staying power has waned in recent times. At its peak, the mobile monster battler attracted over 230 million players each month. Nowadays, that number has shrunk to around 80 million.

The company has also struggled to replicate the Pikachu-shaped lightning in a bottle with other titles. It tried to reskin the Pokémon Go formula onto other franchises like Harry Potter and NBA basketball, but nothing stuck. The Monster Hunter and Pikmin projects, however, are still active.

This led Niantic to cancel multiple games and lay off hundreds of employees. Niantic’s valuation has taken several hits and the company’s long-promised “real-world metaverse” has yet to materialize. If the sale goes through, the company will focus on building out its standalone entity Niantic Spatial. This group builds real-world 3D maps and is led by company CEO John Hanke.

The Saudi PIF has become a major player in the games industry in recent years. It not only owns Scopely and its parent company Savvy Games Group, but has financial stakes in organizations like Nintendo, EA and Activision Blizzard.

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