Pokémon Go maker to sell games to Saudi-owned company for $3.5bn
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After failing to recreate success of augmented reality game, Niantic Labs plans to sell its video game division to -owned Scopely for $3.5bn, as the US  firm shifts focus to geospatial technology after failing to recreate the success of its 2016 smash hit .

The deal, announced on Wednesday, also advances Saudi Arabia’s  the “ultimate global hub” for gaming. The kingdom’s sovereign wealth fund, via Savvy Games, bought Scopely for $4.9bn in 2023 as part of a broader push by the country to diversify beyond fossil fuels.

Niantic Labs said it would distribute an extra $350m to its equity holders under the deal. It will also spin off its geospatial  business into a new firm called Niantic Spatial, which will be led by the Niantic founder and CEO, .

The move follows several tough years for Niantic. After  became one of the successful mobile games, the company struggled to replicate its success and had to lay off employees in 2022 and 2023. It also axed the Harry Potter: Wizards Unite video game in 2022.

For Saudi, already a growing hub for gaming and home to the Esports World Cup, the deal builds on a plan to invest nearly $38bn in initiatives related to the industry through its Savvy  Group.

Savvy Games is a major investor in global video game companies including , in which it has a stake of around 7.54% after a small cut in its interest last year.

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