Niantic Reportedly In Talks to Sell Pokemon Go

As reported by several reputable news outlets, including Polygon, Niantic is currently in talks to sell off not just Pokemon Go, but their ENTIRE gaming wing for a whopping 3.5 billion dollars. That's right; Pokemon Go is for sale.

This is tremendous news for the entire Pokemon Go community, because we officially have no idea what the future may hold. A change in ownership has huge implications, and has just about anyone who plays Pokemon Go and knows about these talks wondering what the future may hold. So here's our two-cents worth on the subject!

Scopely: The Potential Buyer

Currently, the company in talks with Niantic to buy their gaming division is Scopely. Scopely is a US-based tech company situated in California, similar to Niantic, that focuses on mobile game development. They are owned by the Savvy Game Group, which is fully owned by the Saudi Arabian Public Investment Fund. Over the course of the company's life, they've made a few note-worthy games like Star Trek Fleet Command and Looney Tunes, World of Mayhem. However, their biggest game to date has been Monopoly Go, which you've probably seen ads for if you've been online for gaming in ANY capacity in the past few years.

Scanning over the list of noteworthy games produced by Scopely over the years, it's pretty clear that they have leaned heavily into games based on 3rd party Intellectual Properties (IPs). This fact definitely puts Pokemon Go within the purview of Scopely's preferred game design style. This would also allow them to practically corner the market on major mobile games that have "GO" in the title, though I doubt that they consider that a priority.

It's worth noting that Scopely's parent organization, the Saudi Arabian Public Investment Fund, has a current value of nearly 1 trillion dollars, and also seems to be interested in making acquisitions that it considers safe long-term investments; perennial sources of income. Based on that fact, Pokemon Go may very well align with their current investment strategies extremely well.

Pokemon Go and Niantic: The Current State of the Game

While we here at Gamepress tend to focus more heavily on the current state of the game in terms of gameplay optimization with special coverage to various scandals and issues as they arise, that's not what we mean when we say 'the state of the game' in this section. Guaranteed, Scopely doesn't care about the general voice of the community at this time, as right now they want cold-hard facts that boil down to one thing; money. This is the life-blood of this transaction, and will be the prime driving factor when it comes to the potential of this sale. Early Warning: we're going to go a bit into business dealings and throw out a lot of general speculation in this section.

To begin with, it's worth noting again that it's not just Pokemon Go for sale, but Niantic's entire games division. This means that this sale would also include Peridot, Monster Hunter Now, Pikmin Bloom, and Ingress if things go through in their current assumed form.

let's take a look at how Pokemon Go is doing right now. According to Statista, this is Pokemon Go's historical revenue since it launched back in 2016:

It's pretty obvious that Pokemon Go hit its stride right away when it launched back in 2016, and saw a huge surge during the two years when Covid was very much a big thing globally. Since then, it's fallen back into its old trends, with an average yearly income that roughly falls in line with the pre-covid era. However, it's also on a slight decline currently, with 2024 standing out as the second lowest grossing year that the game has seen since 2017.

It's a very safe bet that Pokemon Go is Niantic's highest grossing game, especially considering the fact that they've also had their fair share of flops along the way. Now, keep in mind that these numbers strictly represent the revenue of Pokemon Go; AKA the gross, or what they take in without subtracting the cost of running the game. We don't actually know Niantic's operating expenses, so it's hard to calculate the net. However, we do know that Niantic also garners value from their users. While they claim that they do not sell user-data, the aggregate data gained from running one of the largest publicly available augmented-reality projects in history is bound to bring its own value beyond simple micro-transactions. Note that this is very much speculation. So, for the sake of simplicity, let's just assume that side-value generated from Pokemon Go and the income of Niantic's other games are substantial enough to offset the costs of running Pokemon Go.... in other words, let's just pretend that the above numbers are close enough to the net for the entire gaming division to be a realistic look at what buying them out would bring in on a yearly basis. Is that an EXTREMELY rough estimate with little basis in hard numbers? Yup! But we're going with it anyway for the sake of simplicity... and it's probably not TOO far off anyway! (Source: I made it up)

Anyway; if we can assume roughly 500 million dollars per year in terms of income, then the break-even point for Scopely would be around 7 years, which is pretty steep considering the game has only been around for just under 9 years as of right now. And that break-even point would likely be pushed out even farther due to additional expenses and issues with bringing Niantic's games division onboard. That said, this would also greatly increase Scopely's available resources, which could also be moved around to various other projects as they see fit. They would also gain access to the global network already set in place by Niantic, as well as a lucrative licensing deal with Nintendo/Gamefreak/Creatures Inc. involving the single highest grossing franchise in history, which they could leverage into other deals in the future if they can strike up a good working relationship.

Why Consider Selling?

This is something that a lot of people are likely asking; if you've got a perennial cash-cow like Pokemon Go, why sell it off? Because right now the tech sector is moving. Augmented Reality never really took off like Niantic was hoping it would, but do you know what is taking off right now? Artificial Intelligence. And with 7 years of data on user trends from Pokemon Go and its other games under their belts, Niantic likely feels like they could pivot their long-term plans towards something closer to their roots, and a 3.5 billion dollar windfall could jump-start them into a brand new era. If this is the case, then they may see the loss of their gaming division as a worthwhile risk in favor of potentially huge gains on other fronts. Now, this is admittedly VERY MUCH speculation, but it really feels like that's the way that the stars are currently aligning. Add to this the fact that Niantic will likely be hired by Scopely to help them run Pokemon Go in some capacity, at the very least for a while, and Niantic probably has a lot of incentive to sell right now, if the numbers are right.

What Does it Mean for Us?

As of right now, it's hard to tell what the future will hold. It's entirely possible that this sale will fall through for any number of reasons, and we will continue with the status quo for the foreseeable future. It's also possible that other big companies might smell blood in the water and make their own bids. But as of right now, that doesn't seem extremely likely.

SO: let's get down to brass tacks. If Scopely does purchase Pokemon Go, here are my thoughts and predictions:

For starters, I don't believe that we'll see many huge changes if this goes through. At least not right away. As stated, the game will be indirectly owned by the Saudi Arabian Public Investment Fund, so they will probably want to keep things flowing at a reasonable rate with minimal risks. Based on a little bit of research that I've personally done into Scopely's games since finding out about this potential deal, it doesn't seem like they're too horrible with the way that they monetize their games (correct me if I'm wrong, as I don't actually play any of them), but they are all 'freemium' games, so we MAY see a bit more nickle-and-diming as time goes on.

ON THAT NOTE: it's worth remembering that Niantic does not own Pokemon; they license the IP from Nintendo/Gamefreak/Creatures Inc. This means that Scopely won't have carte-blanche over how the game will be run if and when they own it. It's worth noting that the vast majority of the game's day-to-day management IS currently run exclusively by Niantic most likely, but the licensing web that would be weaved by this sale would mean that they very likely wouldn't make many HUGE changes. At least at first.

If we do see major changes in the way that Pokemon Go is managed, it will likely start to show up 2-3 years after the purchase is made. At that point, we may see the game dumbed down a bit. The reason that I say this is because I subjected myself to Monopoly Go for a while before writing this article (no offense to anyone who plays the game. To each their own, it's just not for me). is there hope that they could also begin to fix the Niantic-based problems with the game that many of us have been complaining about for years? Yup, it's possible. However, it's also very important to keep in mind that it's extremely unlikely that Scopely wants to buy Pokemon Go for love of the game.... they want their cash-cow!

Closing

WOW this was a heavy article. Thank you for staying awake up until now! There is endless speculation that can be had in regards to this potential sale, and I could likely continue with my own speculation for quite some time beyond the above (yes, I'm a bit long winded when it comes to business topics), but this HOPEFULLY gives those of you who were kind enough to bear with me to this point a bit of context. I could VERY WELL be wrong with the above, and I would love it if you were to share your thoughts. While I know that it's cliche to end an article with 'let us know what you think in the comments!', I really would love to see some opinions, even if you just want to just say that I'm 100% wrong. So please do leave your thoughts below, and I will keep an eye on this in the coming days and weeks!