Niantic Labs, the renowned developer of Pokémon Go, has announced that it is selling its video game division to Saudi Arabia-owned mobile developer Scopely for a staggering $3.5 billion. The deal, which is subject to regulatory approval and other closing conditions, will bring Niantic's entire AR gaming catalog, including Pokémon Go, Monster Hunter Now, and Pikmin Bloom, under Scopely ownership.

The acquisition marks a significant shift for Niantic, which has struggled to replicate the success of Pokémon Go across its other AR games. Despite attracting over 500 million players in its first year, Pokémon Go's popularity was impacted in 2020 when global COVID-19 lockdowns kept people inside their homes. The company has since canceled multiple projects and laid off at least 310 employees between 2022-2023 in an attempt to "weather the current challenges in the market."

In a statement, Niantic CEO John Hanke expressed confidence in the partnership, saying, "Niantic games have always been a bridge to connect people and inspire exploration, and I am confident they will continue to do both as part of Scopely. I firmly believe this partnership is great for our players and is the best way to ensure that our games have the long-term support and investment needed to be 'forever games' that will endure for future generations."

The deal will also bring Niantic's social companion apps for Pokémon Go, including Campfire and Wayfarer, under Scopely ownership. However, the Peridot and Ingress AR gaming titles, which are also supported by the Wayfarer mapping app, will remain under the ownership and development of Niantic Spatial.

This acquisition is the latest move by Saudi Arabia to expand its presence in the gaming industry. The Saudi Public Investment Fund (PIF) has previously acquired stakes in Nintendo, Activision Blizzard, and EA, and established Esports and gaming company Savvy Games Group in 2021. The PIF also acquired Monopoly Go! developer Scopely for $4.9 billion in 2023.

The announcement appears to be the 2025 "megadeal" that Scopely's chief revenue officer Tim O'Brien teased last year, saying during a Q&A that it would involve "a scaled global franchise doing hopefully at least a billion dollars in revenue." Niantic Labs doesn't disclose its earnings to the public, but Scopely said in its announcement that Niantic's gaming business drove $1 billion in revenue last year, and Pokémon Go alone is estimated to have brought in $7.9 billion in revenue since launching in 2016.

The acquisition has significant implications for the gaming industry, as it brings a major AR gaming catalog under Saudi ownership. It also raises questions about the future of Niantic's games and the potential impact on players. As the deal moves forward, gamers and industry observers alike will be watching closely to see how this acquisition shapes the future of gaming.