Niantic, the Creator of Pokémon Go, Allegedly Plans to Sell Video Game Division for $3.5 Billion

Niantic in Discussions to Sell Video Game Division

Niantic, the innovative company behind the hit mobile game Pokémon Go, is reportedly negotiating a potential sale of its video games division to Scopely for a substantial $3.5 billion. This development was disclosed by Bloomberg, citing sources close to the ongoing discussions. While an announcement may be forthcoming, the finalization of the deal remains uncertain.

A Brief History of Niantic

Founded in 2010 as Niantic Labs, Niantic started as a grassroots initiative within Google. The company transitioned to an independent entity in 2015 after Google’s corporate restructuring into Alphabet, Inc. Known primarily for its pioneering work in augmented reality (AR) gaming, Niantic captured the gaming world’s attention with its location-based games.

The Pokémon Go Phenomenon

Niantic’s flagship title, Pokémon Go, launched in 2016, quickly became a global sensation. This game not only popularized augmented reality but also set a financial precedent, achieving over 500 million downloads by the end of its launch year. By 2020, the title amassed over $6 billion in revenue, solidifying its position as one of the most profitable mobile games in history.

Challenges in Replicating Success

Despite the monumental success of Pokémon Go, Niantic struggled to replicate this achievement with subsequent titles. For instance, Harry Potter: Wizards Unite, released in 2019, failed to engage players and was discontinued within three years. Other projects, such as NBA All-World and the anticipated MARVEL World of Heroes, either underperformed or were never launched. Games like Monster Hunter NOW and Pikmin Bloom also failed to gain traction; the latter only generating $44 million in revenue in its first two years.

Reasons Behind the Potential Sale

Given this track record, Niantic’s interest in selling its video game division appears to stem from the desire to realign its business strategy. Scopely’s portfolio features popular mobile titles such as Monopoly Go!, Marvel Strike Force, Star Trek Fleet Command, and WWE Champions, making it a compelling partner. Scopely itself underwent a significant change in 2023 when it was acquired by the Savvy Games Group, backed by Saudi Arabia’s Public Investment Fund for $4.9 billion.

Conclusion

The potential acquisition marks a significant turning point for Niantic, which will need to navigate its next steps in a rapidly evolving gaming landscape. As transitions unfold, both companies may reshape their futures, influencing the next wave of mobile gaming experiences.

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