Scopely's $3.5bn Acquisition of Niantic
- katerinageorgiou5
- 8 minutes ago
- 5 min read
By Edward Mazin, Ryan Trachuk, Olin Duncan, Charlie Hogshire, Caden Viehe, Brendan McNulty (UCLA); Howard Fang, Muditt Khurana (MIT)
Photo: Oliver Beer (Unsplash)
Overview of the deal
Acquirer: Scopely
Target: Niantic
Total Transaction Size: $3.50bn
Implied Equity Value: $3.85bn
Closed Date: Not Disclosed
Target Advisors: J.P. Morgan (Financial); Skadden, Arps, Slate, Meagher, & Flom LLP (Legal)
Acquirer Advisors: Goldman Sachs & Co. (Financial); Fenwick & West LLP (Legal)
On March 12, 2025, Scopely—one of the leading mobile game publishers in the United States—announced a major acquisition: it will purchase Niantic’s games division in a deal valued at $3.5 billion. The acquisition marks a significant moment in the mobile gaming landscape, bringing Niantic’s highly respected development teams, including key figures like Kei Kawai and Ed Wu, under Scopely’s umbrella. Alongside the talent, the deal includes globally recognized titles such as Pokémon GO, Pikmin Bloom, and Monster Hunter Now, as well as supporting platforms like Campfire and Wayfarer.
Niantic’s games had a strong year in 2024, pulling in over $1 billion in revenue and attracting more than 30 million active players each month. The acquisition is expected to significantly broaden Scopely’s footprint, giving it access to one of the world’s largest mobile gaming audiences. Notably, Pokémon GO—which drew over 100 million unique players last year—continues to be a top-performing game nearly ten years after its release.
Assuming the deal clears regulatory review, Niantic’s game development teams will remain focused on their existing projects but now operate within Scopely’s broader strategic framework. At the same time, Niantic will spin off its geospatial AI platform into a newly formed company, Niantic Spatial Inc., allowing each organization to pursue its specialized goals moving forward.
“Scopely has always been focused on cultivating meaningful communities through a shared love of play, and the Niantic games organization is one of the best in the world at this endeavor. We are extremely inspired by what the team has built over the last decade, delivering innovative experiences that captivate a vast, enduring global audience and get people out in the real world. We look forward to further accelerating the team’s creativity through our partnership.” - Tim O’Brien, Scopely’s Chief Revenue Officer
Company Details (Acquirer - Scopely)
Scopely is a global game developer and publisher, offering free-to-play mobile video games. They create games based on well-known adaptations of licensed intellectual property and several original intellectual properties. Popular games in Scopely’s catalogue include “Stumble Guys,” “MONOPOLY GO!,” and “MARVEL Strike Force.” Scopely was purchased by Savvy Games Group in July 2023, Savvy Games Group is owned by Saudi Arabia’s Public Investment Fund.
Founded in 2011, headquartered in Culver City, California, USA
Co-CEOs: Walter Driver and Javier Ferreira
Number of employees: ~2,400
Market Cap: N/A
Enterprise Value (EV): $4.9bn
LTM Revenue: ~ $1.9bn
LTM EBITDA: Not Disclosed
LTM EV/Revenue: 2.58x
LTM EV/EBITDA: Not Disclosed
Recent Transactions: Acquisition of Tag Games for an undisclosed fee (June 2023)
Company Details (Target - Niantic)
Niantic is a global augmented reality (AR) technology company and game developer, best known for creating immersive, location-based mobile games. Through augmented reality, Niantic blends digital and physical worlds. The company is most known for brands such as “Pokémon GO,” “Pikmin Bloom,” and “Ingress,”. Niantic was originally incubated within Google and later spun out of Alphabet as an independent company in 2015.
Founded in 2010, headquartered in San Francisco, California
CEO: John Hanke
Number of employees: ~1,000
Market cap: N/A
EV: $9bn
LTM Revenue: ~ $1bn
LTM EBITDA: Not disclosed
LTM EV/Revenue: ~9.0x
LTM EV/EBITDA: N/A
Projections and Assumptions
Short-Term Consequences
The acquisition of Niantic’s games business by Scopely will allow the mobile gaming publisher to significantly expand its reach into real-world AR gaming and reinforce its international footprint. Niantic’s flagship game, Pokémon GO, has a strong presence in key markets such as Japan, Germany, and the United States. This strategic geographic expansion enhances Scopely’s global player base while further diversifying its revenue streams. The acquisition also brings in high-engagement IPs with loyal communities, reducing reliance on a single franchise and boosting resilience against regional or title-specific market volatility.
In the near term, the transaction is expected to be neutral to mildly dilutive to Scopely’s earnings. The acquisition involves a $3.85 billion capital outlay, and the Niantic titles require ongoing investment to maintain live operations and real-world events. However, Pokémon GO alone generated over $1 billion in 2024, providing an immediate and stable revenue stream. No organizational restructuring is expected, and Scopely has retained Niantic’s entire game team, including senior leaders Ed Wu and Kei Kawai. The continuity of leadership, coupled with Scopely’s proven expertise in monetization and live-service operations, is expected to improve product performance without disrupting the player experience. Initial industry reaction has been favorable, viewing the transaction as a strategic move that further strengthens Scopely’s market leadership in mobile gaming.
Long-Term Upsides
Scopely’s acquisition of Niantic Games presents substantial long-term upsides for both parties. For Scopely, acquiring the products and talent of a top-tier studio aligns with its strategy of growth through acquisition. With this deal, Scopely becomes the only company in the industry to own two of the top ten revenue-generating mobile games. Building on its past acquisitions of DIGIT Game Studios (2019) and FoxNext Games (2020), it will house an even higher calibre asset in Niantic Games—especially with the retention of its experienced development team. The iconic IPs of Pokémon Go and Monster Hunter not only elevate Scopely’s brand but could also drive broader engagement across its portfolio, strengthening its free-to-play monetization model. Additionally, Niantic’s expertise in augmented reality and real-world event integration, such as its popular Community Days, provides Scopely with new avenues to create immersive offline experiences, opening up monetization opportunities while reinforcing its mission to “inspire play, every day.” Industry peers like Zynga, Playrix, and NetEase have also grown via acquisitions, but Scopely firmly positions itself as a leader in both product innovation and talent with the Niantic acquisition.
For Niantic, the sale allows a sharper focus on building its Large Geospatial Model (LGM) and Visual Positioning System (VPS) at Niantic Spatial. LGMs are grounded in physical space and are more complex than LLMs, with potential applications in the Metaverse, robotics, and autonomous vehicles. Thanks to its proprietary spatial data and AR development expertise, Niantic is a front-runner in this space. It will continue to support AR titles like Ingress Prime and Peridot, using them as data engines to refine its LGM. As demand for spatial computing grows, Niantic’s pivot toward this frontier technology could create far-reaching long-term value.
Risks and Uncertainties
Niantic’s revenue is reliant on Pokémon GO, which brought in over $500M in 2024. The game’s success hinges on licensed IP from The Pokémon Company, introducing renewal and control risk. This would have a direct impact on the top line and on future cash flows. Scopely’s track record of aggressive monetization may not align with the expectations of Pokémon GO’s engaged and vocal user base. This risks alienating players and leading to community backlash. This could damage both user retention and brand equity, ultimately hurting the top line.
Integration and Culture mismatches could present issues and with previous titles such as Harry Potter: Wizards Unite and NBA All-World being shut down, this poses potential concerns. Therefore, a clear post-merger integration plan should be implemented to ensure a smooth merger.
Scopely’s ownership by Saudi Arabia’s Public Investment Fund could prompt heightened scrutiny, especially around location-based data and geopolitical tensions. In particular, Global compliance (GDPR, CCPA) and reputational perception in key markets are critical to sustaining user trust.
The mobile gaming market is fast-moving and trend-driven, with user preferences shifting rapidly. The industry is hit-driven, with the lifespan of even successful titles can be short-lived without regular content innovation.
“Niantic games have always been a bridge to connect people and inspire exploration, and I am confident they will continue to do both as part of Scopely.” - John Hanke, Niantic’s Chief Executive Officer