Niantic reportedly nears $3.5B deal to sell gaming unit to Scopely

According to Bloomberg, Niantic, the developer behind the augmented reality sensation Pokémon Go, is reportedly in negotiations to sell its gaming division to Scopely, a company owned by Saudi Arabia’s Savvy Games Group. Sources familiar with the matter indicate that the deal, valued at approximately $3.5 billion, could be finalized in the coming weeks. While the transaction would encompass Pokémon Go and other mobile games within Niantic’s portfolio, there is no certainty that an agreement will be reached.

Pokémon Go emerged as a groundbreaking title upon its 2016 release, captivating players worldwide with its augmented reality mechanics and real-world exploration elements. However, Niantic has struggled to replicate that level of success with subsequent releases. In response to declining revenue and failed projects, the company implemented layoffs in both 2022 and 2023, resulting in job cuts and game cancellations, including Harry Potter: Wizards Unite. Despite these setbacks, Pokémon Go remains the most downloaded and financially successful AR game in history.

Founded as a spin-off from Alphabet Inc.’s Google in 2015, Niantic has been at the forefront of augmented reality innovation. CEO John Hanke, previously a leader in Google’s Geo division, has spearheaded Niantic’s efforts in combining location-based gaming with cutting-edge technology. Beyond gaming, the company has developed tools to facilitate 3D scanning of real-world locations, contributing to a large-scale geospatial model that employs machine learning to map and connect global scenes.

Scopely, which was acquired by Savvy Games Group for $4.9 billion two years ago, has been actively expanding its mobile gaming presence. In 2024, Savvy CEO Brian Ward emphasized the company’s goal of securing a top-tier mobile gaming title, positioning Scopely as a key player in Savvy’s broader mobile gaming investment strategy. Niantic’s potential sale aligns with Savvy’s larger ambitions of bolstering Saudi Arabia’s gaming industry and diversifying the nation’s economic landscape.

Last August, Niantic and Savvy entered into a partnership aimed at strengthening Niantic’s presence in Saudi Arabia, the United Arab Emirates, and Egypt. The proposed acquisition of Niantic’s gaming division further underscores Savvy’s commitment to expanding its gaming footprint. If the deal proceeds as expected, it could significantly reshape the mobile gaming market while providing Niantic with an opportunity to pivot toward its broader AR technology ventures.