Niantic Labs stated it could promote its video-game division to Saudi Arabia-owned Scopely for $3.5 billion, because the US augmented actuality agency shifts focus to geospatial know-how after failing to recreate the success of its 2016 smash hit “Pokemon Go.”
The deal, introduced on Wednesday, additionally advances Saudi Arabia’s ambitions to turn out to be the “final world hub” for gaming. The dominion’s sovereign wealth fund, through Savvy Video games, purchased Scopely for $4.9 billion in 2023 as a part of a broader push by the nation to diversify past fossil fuels.
Niantic stated it could distribute an additional $350 million to its fairness holders below the deal. It would additionally spin off its geospatial AI enterprise into a brand new agency known as Niantic Spatial, which will likely be led by Niantic founder and CEO John Hanke.
Niantic Spatial will likely be funded with $250 million of capital – $200 million from Niantic’s stability sheet and $50 million from Scopely. All of Niantic’s authentic traders may even proceed to be shareholders of Niantic Spatial.
The transfer follows a number of robust years for Niantic. After “Pokemon Go” turned one of many profitable cell video games, the corporate struggled to copy its success and needed to lay off workers in 2022 and 2023. It additionally axed the “Harry Potter: Wizards Unite” vide-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 take a position almost $38 billion in initiatives associated to the business by way of its Savvy Video games Group.
Savvy Video games is a significant investor in world video-game corporations together with Nintendo, by which it has a stake of round 7.54% after a small lower in its curiosity final yr.