In a major shift for Niantic Labs, the company behind the global phenomenon “Pokemon Go,” the augmented reality (AR) pioneer has announced that it will sell its video game division to Saudi Arabia-owned Scopely for a staggering $3.5 billion. The move marks the end of an era for the company that once captured the hearts of millions with its groundbreaking AR mobile game, but it also opens new doors for its future in geospatial technology.
This deal, which was confirmed on March 12, 2025, comes as Niantic struggles to replicate the success of its 2016 smash hit. Despite the enormous popularity of “Pokemon Go,” Niantic has faced a tough road in recent years, including layoffs and the shutdown of its “Harry Potter: Wizards Unite” game in 2022. The sale is a reflection of Niantic’s decision to pivot away from its video game business and focus more on its geospatial AI and technology ventures.
Saudi Arabia’s Strategic Investment in Global Gaming
The deal also strengthens Saudi Arabia’s growing influence in the global gaming industry. Through the Savvy Games Group, which purchased Scopely for $4.9 billion in 2023, the Kingdom is doubling down on its ambition to become the “ultimate global hub” for gaming. The investment is part of a broader strategy by Saudi Arabia to diversify its economy away from fossil fuels, with nearly $38 billion set aside for gaming and related initiatives under the Savvy Games umbrella.
This acquisition not only benefits Saudi Arabia but also positions Scopely as a key player in the future of mobile gaming. By acquiring Niantic’s gaming division, Scopely is poised to take on new projects that will likely build upon the success of “Pokemon Go” while infusing the company with fresh resources and technology.
Niantic’s Strategic Shift: Geospatial Technology and Niantic Spatial
While the sale of its game division may signal the end of Niantic’s era as a major game developer, it marks the beginning of a new chapter for the company. Niantic plans to spin off its geospatial AI business into a new firm called Niantic Spatial. This spin-off will focus on utilizing geospatial data and augmented reality to create new, innovative solutions beyond traditional gaming.
John Hanke, Niantic’s founder and CEO, will continue to lead the new entity, which will be funded with $250 million in capital—$200 million from Niantic’s balance sheet and $50 million from Scopely. Niantic’s original investors will also remain shareholders of Niantic Spatial, ensuring that the company maintains strong ties to its previous success while pursuing new horizons in the tech world.
Hanke commented on the transition, noting, “We are incredibly excited to continue exploring the potential of geospatial technology and how it can transform industries outside of gaming. Niantic Spatial will be at the forefront of this revolution.”
The Challenges Niantic Faced in the Gaming Industry
Despite the groundbreaking success of “Pokemon Go,” Niantic struggled to replicate its initial triumph in the mobile gaming space. After the massive launch of “Pokemon Go” in 2016, Niantic faced the daunting task of meeting the high expectations that followed. The company’s subsequent attempts, such as “Harry Potter: Wizards Unite,” failed to garner the same level of attention and engagement.
In 2022 and 2023, Niantic had to lay off employees as part of restructuring efforts. The company also made the difficult decision to shut down “Harry Potter: Wizards Unite,” a game that failed to match the success of its predecessor. These struggles highlighted the challenges Niantic faced in a rapidly evolving gaming industry, where staying relevant requires constant innovation and adaptation.
Despite these setbacks, Niantic remains a leader in augmented reality technology, and the shift towards geospatial AI could provide the company with new opportunities to lead in this growing field.
Saudi Arabia’s Growing Gaming Ambitions
This acquisition is just one part of Saudi Arabia’s broader gaming strategy. With an increasing focus on esports and digital entertainment, the Kingdom is positioning itself as a global center for the gaming industry. Saudi Arabia’s Savvy Games Group has been making substantial investments in global gaming companies, including a notable stake in Nintendo. The Kingdom’s gaming sector is set to benefit from an influx of investment, talent, and global partnerships, with Niantic’s gaming division now part of the mix.
For Saudi Arabia, this acquisition is a significant step toward achieving its goal of becoming a dominant force in the gaming world. By acquiring Niantic’s expertise in augmented reality and gaming, Saudi Arabia is ensuring that it remains at the cutting edge of technological innovation.
What’s Next for Niantic and Scopely?
As Niantic transitions into its new role in the world of geospatial AI, Scopely is set to inherit the company’s valuable gaming portfolio. Scopely’s acquisition includes popular mobile games like “Ingress,” the precursor to “Pokemon Go,” and other Niantic-developed titles. This will allow Scopely to expand its offerings and potentially breathe new life into these games, integrating them into its larger gaming ecosystem.
For Niantic, the future is bright as it focuses on its new direction with Niantic Spatial. The company plans to harness its expertise in geospatial data and augmented reality to build solutions that could impact industries ranging from real estate to retail. As John Hanke stated, “This is an exciting new chapter for Niantic, one that will allow us to continue innovating and exploring new frontiers.”
As for Scopely, it is now better positioned than ever to dominate the mobile gaming market, with Niantic’s assets and technologies providing the perfect foundation for future growth. This acquisition is a significant turning point for both companies, and the gaming industry as a whole.
The sale of Niantic’s video game division to Scopely is a reminder of the ever-evolving nature of the gaming industry. It highlights how companies must continuously adapt to remain competitive and relevant in an industry driven by fast-paced technological advancements.
As the world of gaming continues to evolve, it will be interesting to see how Niantic’s shift toward geospatial AI influences the broader tech landscape, while Scopely’s expansion offers new possibilities for mobile gaming. For Saudi Arabia, this deal is yet another milestone in its quest to become a powerhouse in the global gaming industry.
With billions of dollars invested in gaming and technology, the future of both Niantic and Scopely looks incredibly promising, and the impact of this major acquisition will reverberate across the industry for years to come.