A Saudi-owned entity tied to the government has reached a deal to acquire the developer of the popular game Pokemon Go for $3.5 billion, the two sides announced on Wednesday, in a move that further cements Saudi Arabia’s stake in the global video game industry.
Scopely said in a statement it will acquire Niantic’s games business and team, including Pokemon Go, the augmented reality mobile games Pikmin Bloom and Monster Hunter Now as well as unspecified other apps.
Niantic confirmed the deal in a statement of its own, saying it will distribute an additional $350 million to shareholders as part of the arrangement.
The Saudi Public Investment Fund’s Savvy Gaming Group acquired the Los Angeles-based Scopely in 2023. Scopely is the developer of the popular Monopoly Go! mobile app based on the eponymous board game and has additional offices in Israel, China, India and Europe. Niantic is based in San Francisco.
Why it matters: Pokemon Go is one of the most popular mobile games in the world, with reportedly more than 1 billion downloads since it launched in 2016. The game allows users to “catch” the Japanese animal-based characters via their smartphones wherever they are. The game surpassed $8 billion in user spending in April of last year, according to the researcher AppMagic.
The Saudi sovereign wealth fund launched Savvy in 2022 with the goal of investing in and developing video games as well as esports. Crown Prince Mohammed bin Salman is largely responsible for the kingdom’s video games push and unveiled a national strategy for the sector the same year. Saudi Arabia has set a goal of investing $38 billion in video games as part of the Vision 2030 economic diversification initiative.
According to a July report from the New York Times, the PIF and its subsidiaries have invested $6 billion in buying game companies and $14 million in stock transactions in the sector. Savvy Games Group owns 40% of the total esports market share, per the outlet.
Among the fund’s holdings are a roughly 9% stake in EA Sports and a 7.54% stake in Nintendo. The PIF cut its share in the latter from 8.58% last October.
Saudi Arabia hosted its first Esports World Cup last year. The competitive video game tournament will return to Riyadh this July. In 2027, the kingdom will host the first-ever Olympic Esports Games.
Know more: The kingdom’s video games strategy faces some domestic challenges, particularly with regard to esports. Arabian Gulf Business Insight noted in a July report that sponsors of esports have traditionally been gambling companies. Gambling is illegal in Saudi Arabia. The outlet noted regulatory differences between sharing data in Saudi Arabia and Europe as another challenge for the sector.
According to the British professional services firm PwC, global esports revenue is expected to reach $1.86 billion this year. However, the sector struggles with profitability, including Gulf countries. The average video game competition watcher in the region contributes just over $2 annually to the industry, the firm said in a July report.
Saudi group buys ‘Pokemon Go’ for $3.5 Billion: What we know
