Pokémon Go maker Niantic is selling its games division to Scopely for $3.5B

Scopely acquires Niantic's games for $3.5B; Niantic shifts to 3D map focus.

: Scopely announced the acquisition of Niantic's gaming division for $3.5 billion while Niantic plans to focus on real-world 3D mapping through Niantic Spatial. John Hanke will lead the new Niantic Spatial entity, emphasizing the construction of a global geospatial model using machine learning technologies. Employees from Niantic's games will transition to Scopely, which emphasizes its commitment to maintaining the spirit of Niantic's popular games, including Pokémon Go. Additional funding of $350 million will augment the acquisition value, with $250 million allocated to Niantic Spatial development.

Scopely, a prominent figure in the mobile gaming industry, has entered into a significant agreement to purchase the gaming division of Niantic for a hefty sum of $3.5 billion. This transaction underscores Scopely's strategic intent to integrate Niantic's successful gaming titles into its portfolio, promising to enhance its standing in the global gaming market. Furthermore, Niantic has committed to augment the deal with an additional $350 million in cash, raising the total valuation for Niantic equity holders to $3.85 billion. The collaboration is expected to leverage Scopely’s expertise in operating live services and expand Niantic’s interactive gaming capabilities.

Niantic’s gaming lineup is headlined by the phenomenon Pokémon Go, which boasts over 20 million weekly active players, signifying its continuing popularity. Titles like Pikmin Bloom, launched in 2021, and Monster Hunter Now, released in 2023, reflect Niantic's exploration in augmented reality (AR) gaming and community-centric platforms like Campfire and Wayfarer. These attempts cater to evolving gamer preferences for immersive experiences that connect virtual and physical worlds, which Scopely has committed to maintaining post-acquisition.

John Hanke, Niantic’s CEO and founder, articulated the vision for Niantic’s future, shifting focus towards the development of real-world 3D maps under a newly-formed entity, Niantic Spatial. This organization will spearhead the creation of a comprehensive geospatial model aimed at understanding and linking real-world scenes globally through advanced machine learning capabilities. Niantic has previously sought to establish itself in the geospatial data arena with its Scaniverse app, which facilitates the creation of 3D models of physical objects for developer use.

As a result of this transaction, all Niantic employees working on its gaming franchises will transition to Scopely's 2,300-strong workforce. Scopely has pledged to preserve the integrity and essence of Niantic's beloved games, such as Pokémon Go, assuring players that the immersive and community-driven spirit of these experiences will endure. However, specific future plans for these games remain unclear, emphasizing Scopely’s competence in managing well-known intellectual properties and extensive gaming communities.

Moving forward, Niantic intends to redirect resources towards generating real-life location data points, which aligns with its historical challenges in sustaining the success level of Pokémon Go. This strategic reorientation follows difficulties during the pandemic, including discontinued projects linked to major franchises like NBA, Harry Potter, and Marvel, and significant workforce reductions. The company’s endeavor to construct an expansive geospatial model highlights a pivot towards innovation in spatial data aggregation and analysis, extending the boundaries of its previous products and services in the gaming domain.

Sources: TechCrunch, The Verge, GamesIndustry.biz, Reuters, Business Insider

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