Pokemon Go creator Niantic explores sale of gaming division
Pokémon Go was a mega-hit, but many other games flopped. Now, Niantic is apparently looking to sell its games division.
After striking gold with Pokémon Go, Niantic appears ready to shift direction. According to media reports, the Augmented Reality game developer is in talks to sell its gaming division to Scopely, a mobile games provider owned by Saudi Arabia's Savvy Games Group. The reported purchase price sits around $3.5 million, though neither company has officially confirmed the deal.
From phenomenon to finding a new path
Pokemon Go's 2016 launch proved transformative for Niantic. The game generated hundreds of millions in revenue from the start, becoming a cultural touchstone that continues delivering steady income through in-app purchases years later.
But lightning never struck twice. Subsequent releases like Harry Potter: Wizards Unite and Settlers of Catan AR failed to find an audience and were eventually shut down. A planned Transformers game never made it to release.
Experimental ventures into XR
The company explored new territory with XR applications like Wol, the talking owl, and Hello, Dot, designed for headsets. Niantic teased its own AR headset in 2021 and partnered with Qualcomm to showcase a reference design in late 2022, though no consumer product has emerged.
Financial shifts and strategic changes
Like many tech companies, Niantic faced challenges in 2023, laying off around 200 employees. This came after securing $300 million in funding that had doubled the company's valuation to $9 billion.
Without another hit game in sight, Niantic's potential pivot makes strategic sense. One path forward could involve focusing on AR developer tools and platforms like their Lightship system. However, transforming from a game studio into a technology provider presents significant challenges for the company.
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