$3.5B Move for Pokemon GO? Scopely on Niantic’s Gaming Division
Written by our partner InvestGame
According to Bloomberg, US-based AR gaming company Niantic, Inc. plans to sell its gaming business, including its flagship title, Pokémon GO. The game development division could be acquired by US-based mobile gaming company Scopely for $3.5B. This deal would significantly shift the AR and location-based gaming market if true.
ABOUT NIANTIC
Niantic was established as an internal startup at Google in 2010 by John Hanke (previously CEO of Keyhole, which was acquired by Google and became the foundation of Google Earth). In 2015, it spun out as an independent company with backing from Google (NASDAQ: GOOG), Nintendo (TYO: 7974), and The Pokémon Company. Today, the company employs almost 1,000 people, with main offices in the US, Japan, and the UK.
Since 2015, Niantic has raised over $765m across four funding rounds:
- in Oct’15, the company has secured $20m in a Series A funding round from The Pokémon Company, Google and Nintendo;
- in Nov’17, Niantic secured $200m in a Series B round led by Spark Capital, with participation from other investors, for the development of an AR title based on the Harry Potter universe;
- in Jan’19, Niantic raised $245m in a Series C investment round led by IVP, with additional strategic investors participation, at nearly $4B valuation;
- in Nov’21, Niantic secured $300m from Coatue, doubling its valuation to $9B.
Niantic, best known for the AR mobile game Pokémon GO (2016), pioneered AR gaming by blending real-world exploration with digital gameplay. The game is based on IP co-owned by Nintendo (Japan-based gaming giant), Game Freak (Japan-based game developers of the main installments of the franchise), and Creatures Inc. (Japan-based video game company affiliated with Game Freak and Nintendo). While the company has since released other AR titles, including Harry Potter: Wizards Unite (closed in 2022 after 2.5 years since launch), none have replicated the same level of success.
The success of Pokémon GO made Niantic’s name in the gaming industry; however, the company’s focus has been more tech-driven, as observed in its M&A activity. Since 2017, Niantic has acquired over 10 technological and platform start-ups (e.g., Scaniverse, Hoss, Lowkey, and others).
Given the stagnating performance of Pokémon GO (which saw almost flat YoY IAP annual revenue since 2022) and elevated valuation multiples relative to industry benchmarks, a $3.5B transaction for Niantic’s games unit would likely incorporate a contingent earn-out structure to align pricing with long-term performance. The rumored sale follows Niantic’s cancellation of its NBA and Marvel titles and layoffs in Jun’23. But what about the potential buyer?
Acquired by Saudi Arabia-based Savvy Games Group in 2023 for $4.9B, Scopely reported by the end of 2024 $10B lifetime revenue for its mobile games driven by live-service hits like Marvel Strike Force and Monopoly Go!, leveraging expertise in cross-IP partnerships and effective monetization strategies. Scopely’s potential $3.5B acquisition of Niantic’s games unit would mark a significant shift in its strategy, expanding its portfolio beyond traditional mobile gaming into AR-driven live-service experiences. The deal presents multiple strategic advantages for both companies.
STRATEGIC RATIONALE FOR SCOPELY:
- IP portfolio expansion: Pokémon GO generated ~$800m gross IAP revenue in 2024, according to AppMagic, providing immediate revenue scale and strengthening Scopely’s licensing portfolio, which already includes Monopoly Go!. The deal also offers potential access to Nintendo and Capcom IPs;
- Potential synergies: Scopely’s live-service know-how and monetization expertise combined with the loyal fanbase of Pokémon GO may potentially boost revenue growth and drive monetization upward. With Niantic’s recent pivot towards tech innovation over content development, there’s a clear low-hanging fruit scenario to enhance title performance and capture untapped value.
STRATEGIC RATIONALE FOR NIANTIC:
A $3.5B sale provides liquidity to accelerate R&D in AI-powered AR tools (e.g., 3D mapping, object recognition) and mitigates reliance on content revenue, clearly repositioning the company as a technology-first startup. With the games unit divested, Niantic could concentrate its workforce and resources on expanding its Spatial AR platform and enterprise solutions;
The deal seems a win-win for both sides. Niantic’s divestiture is a bold bet on AR’s future capabilities, prioritizing technology scalability over gaming content.
Before we dive into last week’s key M&A and funding highlights, let’s spotlight a major shift—corporate investors now drive 40% of nine-figure gaming deals, reshaping the industry’s funding landscape.
In our latest feature with GDEV Inc. ($GDEV), we analyze this trend and its impact on the future of gaming.
Notable Transactions
MERGERS & ACQUISITIONS🤝
US-based mobile game developer and publisher Jam City has agreed to sell Canada-based mobile game developer Ludia to a consortium of Canadian institutional investors for an undisclosed sum. The deal, which includes Ludia and its portfolio of titles—Jurassic World: The Game, Jurassic World Alive, and Ninja Turtles: Legends—is currently under review by the Canadian Competition Bureau. The company initially acquired Ludia for $175m in May’21.
Estonia-based 3D asset creation platform developer Alpha3D has acquired Netherlands-based game development platform moonlander.ai for an undisclosed sum. MoonlanderAI enables developers to create in-game worlds using its text-to-game technology. The acquisition will enhance Alpha3D’s platform by allowing the transformation of 2D images or text into 3D models. To date, Alpha3D has raised a total of $2m.
VENTURE FINANCING 💰
Turkey-based mobile game developer Good Job Games has raised over $15m from Menlo Ventures at a rumored valuation exceeding $100m. This marks Menlo Ventures’ first investment in a Turkey-based company. Good Job Games has developed more than 30 titles, with its current portfolio featuring casual puzzle games such as Wonder Blast and Match Villains. The company previously developed Zen Match, which it sold to Israel-based mobile gaming giant Moon Active for an estimated $100m in Dec’22. In Jun’23, Good Job Games also divested its hypercasual portfolio to Azur Games. This latest investment underscores the rapid growth of the Turkish gaming market, a trend explored in detail in our recent research.
New Zealand-based educational game developer Polymath has raised $1m in a pre-Seed funding round co-led by Blackbird and GD1 (Global From Day One), with participation from an angel investor. The company is developing an educational sandbox game designed to teach math to children.
UK-based digital board game developer Meeple Corp has raised $629k in a pre-seed funding round with participation from Hiro Capital, the mini fund, and angel investors. The funds will support the company’s adaptation of classic tabletop games for digital platforms. Meeple Corp’s debut title, Kingdomino Digital, is set for release in 2025 on mobile platforms.
PUBLIC OFFERINGS 📈
Sweden-based multiplatform game developer and publisher EG7 (ST: EG7) has secured $32.9m (SEK 350m) in senior unsecured bonds with a floating rate coupon of 3-month STIBOR plus 6.25% per annum under a bond framework of up to $94m (SEK 1B). The bonds are set to be issued at the end of Feb’25. The funds will be used for M&A activity and investments in game development.
FUNDRAISING 💼
US-based tech conglomerate Meta (NASDAQ: FB) has launched the $50m Meta Horizon Creator Fund to support developers building mobile and mixed reality worlds within the Horizon platform. The fund will provide monthly bonuses based on engagement, retention, and in-world purchases. Additionally, Meta will launch a $1m world-building competition for mobile platforms in Mar’25. The fund is part of Meta’s broader strategy to integrate free-to-play, social, and mobile-friendly content into its ecosystem.
OTHER NEWS 📰
China-based entertainment holding NetEase Games(HKG: 9999) is reportedly planning to divest its overseas gaming division. The company recently laid off some developers of Marvel Rivals, which launched in Dec’24 and has seen over 40m players to date. The news suggests that NetEase’s Seattle studio layoffs could begin a broader divestment, potentially affecting all non-Chinese studios. You can read more about NetEase corporate investments in our recent feature.
EARNINGS REPORTS 🧾
We continue our earnings reports section, providing a concise overview of the latest financial results from gaming companies (Report Date vs. 21-Feb).
