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Scopely, the Saudi-owned developer behind hit mobile game Monopoly Go!, has agreed a $3.5bn deal to acquire Pokémon Go and a handful of other apps from creator Niantic, which is pivoting to focus on artificial intelligence.
Pokémon Go became an overnight sensation when it launched in 2016, emerging as one of the most popular and lucrative mobile games while also pioneering a new kind of “augmented reality” app that places digital characters over images of the real world when viewed through a smartphone’s camera window.
It remains one of the highest-grossing mobile games today, with 30mn monthly players spending more than $1bn last year across Niantic’s games business.
The deal will give Scopely, which was acquired by Saudi-owned Savvy Games Group in 2023 for $4.9bn, a total audience of more than 500mn players, driven by the huge success of Monopoly Go! The app was the second-highest-grossing mobile game of last year, according to App Store researcher AppMagic, with players spending an estimated $2.2bn.
“We are extremely inspired by what the [Niantic] team has built over the past decade, delivering innovative experiences that captivate a vast, enduring global audience and get people out in the real world,” said Tim O’Brien, chief revenue officer at Scopely. “Few games in the world have delivered the scale and longevity of Pokémon Go, which reached over 100mn players just last year.”
San Francisco-based Niantic, which was spun out of Google’s mapping unit in 2015 and valued at $9bn in 2021, is selling its games business to Scopely at the same time as spinning off a new unit focused on “geospatial AI”, to develop its “next generation map” of the world formed from images and location data captured by its players.
John Hanke, Niantic’s founder and chief executive, said its new venture, called Niantic Spatial, was working on maps that make “the world intelligible for machines” from smart glasses to robots. “Niantic is building the models that will help AI move beyond the screen and into the real world,” he said.
Scopely will continue to share some player data from its games as part of a $50mn investment in Niantic Spatial, which will also be capitalised using €200mn of its former parent’s balance sheet.
Niantic’s existing investors — who include Nintendo, Google, Coatue and IVP — will receive $3.5bn in proceeds from the sale, as well as $350mn previously held on the company’s balance sheet, and will also become shareholders in the AI spin-off.
For Savvy, the deal is the latest step in a plan by Crown Prince Mohammed bin Salman to make Saudi Arabia a global hub for gaming. The plan kicked off in 2022 when the government unveiled a national gaming and esports strategy, with the kingdom’s sovereign wealth fund tasked with achieving that goal as part of the country’s efforts to diversify its economy away from dependence on oil revenues.
The Public Investment Fund earmarked nearly $40bn to make the kingdom a force in gaming and build a local industry, with plans to establish 250 gaming companies in Saudi Arabia and create 39,000 jobs by 2030. Savvy is seen as the main vehicle for these ambitions. A string of deals followed, including taking stakes in Nintendo, Electronic Arts, Activision Blizzard and Take-Two Interactive.
The country has also hosted major video gaming tournaments in recent years. The latest of those events came last summer when Riyadh hosted the Esports World Cup, where more than 500 teams competed for a prize pool of more than $60mn.
The Saudi push into video gaming is expected to continue, with the kingdom set to host the first Olympic Esports Games in 2027 after the country signed a 12-year deal with the International Olympic Committee last year.
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