Niantic to Sell 'Pokemon GO' For a Whopping $3.5 Billion—Is It Goodbye for the Gaming Division?

Niantic's "Pokémon GO" hit a massive appeal to mobile gamers, especially to Pokémon fans who have been longing to play a semi-realistic vibe to the mainline anime. Unfortunately, all good things have to end for a reason: the game developer is now selling the game and its gaming division to Scopely Inc., a Saudi Arabia-based company for a whopping $3.5 billion.

This could be Niantic's way to offset its plans for AR-based games to make way for its new development which will focus on AI alone.

The Vision Behind Niantic's Rise

Niantic to Sell 'Pokemon GO' For a Whopping $3.5 Billion

Niantic's journey began long before "Pokémon GO." In 2001, John Hanke co-founded Keyhole, a mapping technology company that would later be acquired by Google. According to Polygon, the technology became the foundation for Google Maps and Google Earth.

By 2010, Hanke led a Google division focused on AR gaming, eventually launching "Ingress" in 2013, a game that laid the groundwork for "Pokémon GO."

Two years later, Niantic spun off from Google, with financial backing from Google, Nintendo, and The Pokémon Company. The following year, "Pokémon GO" launched and quickly amassed over 500 million downloads, turning Niantic into a household name.

The Struggles of AR Gaming Post-Pokémon GO

Despite "Pokémon GO's" enduring success, Niantic struggled to replicate its impact. The company launched multiple AR-based games, but none matched the success of its flagship title. Hanke continued to advocate for AR's potential, envisioning a future where digital and physical worlds merge through shared experiences.

However, the gaming landscape changed dramatically in 2020. The COVID-19 pandemic forced millions to stay indoors, disrupting Niantic's location-based gaming model.

Layoffs and Shifting Priorities

By 2023, Niantic's struggles became evident. The company laid off 230 employees, accounting for 25% of its workforce, and canceled multiple projects.

Hanke admitted that the AR gaming market was evolving more slowly than expected, prompting Niantic to double down on "Pokémon GO" as its primary revenue source.

Niantic's Future: A Return to Mapping and AI

With the sale of its games division, Niantic appears to be pivoting back to its original passion—geospatial mapping. The company has been leveraging data from its AR games to build large-scale geospatial models, aiming to develop spatial intelligence for AI applications.

In November 2024, Niantic engineers Eric Brachmann and Victor Adrian Prisacariu published an update on the company's geospatial project, describing it as a "Large Geospatial Model" designed to connect millions of global locations through AI-driven scene recognition.

'Pokemon GO's Next Direction

As Bloomberg reports, there's no assurance that the "Pokemon GO" deal will be reached. The $3.5 billion sale to Scopely raises big questions: Will "Pokémon GO' continue to thrive under new ownership?

In September, the Belarusian official of the Ministry of Defense said that "Pokemon GO" was a spy tool to collect data about the country's military information and top-secret data.

However, the official did not have enough evidence to prove that the AR-based game was used in espionage.