American augmented reality company Niantic Labs is shifting its focus to geospatial technologies after failing to replicate the success of its 2016 hit “Pokemon Go.”
The deal, announced Wednesday, also advances Saudi Arabia’s ambitions to become a “major global hub” for gaming. The kingdom’s National Welfare Fund, through Savvy Games, bought Scopely for $4.9 billion in 2023 as part of the country’s broader push to diversify away from fossil fuels.
Niantic said it will distribute an additional $350 million to its shareholders as part of the deal. It will also spin off its geospatial AI business into a new firm called Niantic Spatial, which will be led by Niantic founder and CEO John Hanke.
The move follows a difficult few years for Niantic. After Pokemon Go became a mobile game success, the company struggled to replicate its success and was forced to lay off employees in 2022 and 2023. It also stopped releasing the video game Harry Potter: Wizards Unite in 2022.
For Saudi Arabia, already a gaming hub and host of the eSports World Championship, the deal is a continuation of a plan to invest nearly $38 billion in industry-related initiatives through its Savvy Games Group.
Savvy Games is a major investor in global video game companies, including Nintendo, in which it holds a stake of about 7.54% after a small cut last year.
Source: Reuters
