In a landmark deal that underscores Saudi Arabia’s growing influence in the global gaming industry, mobile game maker Scopely, owned by the Saudi royal investment fund, has acquired Niantic Labs’ gaming business, including the iconic augmented reality (AR) game Pokémon Go, for $3.5 billion.

The acquisition, confirmed on Wednesday, also includes other Niantic titles such as Pikmin Bloom and Monster Hunter Now, as well as the development teams behind them. The deal, however, does not include Niantic’s mapping technology business, which will continue under the new name Niantic Spatial.

The purchase marks one of the largest gaming acquisitions in recent years and signals Saudi Arabia’s ambitious push to establish itself as a major player in the video game industry, with the Saudi royal investment fund having previously bought stakes in Nintendo and Electronic Arts. .

Pokémon Go, which released in 2016, was a total sensation when it was released – proving to be arguably the first decently intuitive attempt at integrating AR into a videogame setting that was relatively functional and compelling.

The game blends the real world with the virtual, encouraging players to explore their neighborhoods (as well as bump into their neighbours and walk into oncoming traffic) to catch Pokémon. The game became a cultural phenomenon, attracting an estimated 100 million monthly active users at its peak and introducing the Pokémon franchise to a much broader audience than its already pretty broad audience.

Despite its enduring popularity, Niantic struggled to replicate the success of Pokémon Go with subsequent titles, such as Harry Potter: Wizards Unite, which was shut down just three years after its launch.

There’s a tangible fear that similar strategies could be applied to Pokémon Go, potentially alienating its loyal fanbase. However, any significant changes to the game would likely require approval from The Pokémon Company, which retains control over the intellectual property and has a reputation for fiercely protecting its brand.

The $3.5 billion deal is still subject to regulatory approval and could face hurdles before finalisation. If completed, it will mark the largest gaming acquisition since… Saudi Arabia’s last purchase in this space, Savvy’s purchase of Scopely in 2023.