Scopely, the mobile publisher owned by Saudi state-backed investor Savvy Games Group, has agreed to acquire Pokemon Go and Niantic's entire video game business for $3.5 billion.The deal will see Scopely purchase Niantic's internal development teams and major titles including Pokemon Go, Pikmin Bloom, and Monster Hunter Now. It will also acquire companion apps and services Campfire and Wayfarer.Scopely said it will allow Niantic's development teams to continue pursuing their "ambitious roadmaps" under current leaders Kei Kawai and Ed Wu."Few games in the world have delivered the scale and longevity of Pokmon Go, which reached over 100 million players just last year. The experience also stands apart for its unique ability to foster in-person connections, with Pokmon Go live events attracting millions of attendees," said Scopely board member and chief revenue officer, Tim O'Brien, in a press release."After spending time with the Niantic team, it quickly became clear that this organization shares our inclination to create industry-leading outcomes and exceptional player experiences. We look forward to a bright future ahead."Pokemon Go lead Ed Wu said the acquisition represents a "positive step" forward and will help the development team maintain its "long-term focus" on supporting the popular AR title, which boasted over 100 million players in 2024.He said the team will be able to operate independently under Scopelyand reiterated it will continue to work in tandem with The Pokemon Company."I believe that Pokmon Go can continue to thrive with Scopely's exclusive and long-term focus on game-making. Scopely's status as a private company also means we can prioritize whats best for you, our Trainers, for the long term," he said in a message to players."We believe that prioritising short-term gains at the expense of our long-term mission would be counterproductive and self-defeating. Every interaction Ive had with Scopely leaders has reinforced that we are in total agreement that the scale, longevity and most of all, real world community, of Pokmon Go make it truly special. We are united in protecting that."Niantic to refocus on geospatial AI business after selling game divisionFor Niantic, the deal represents a chance to refocus on the geospatial AI business with the formation of a new company, Niantic Spatial Inc.The offshoot will be led by Niantic CEO and founder John Hanke. It will continue to operate other Niantic-owned AR titles such as Ingress Prime and Peridot while working to build spacial intelligence models that help people "better understand, navigate, and engage with the physical world."Niantic Spatial will be funded with $250 million of capital, including $200 million from Niantic's balance sheet and a $50 million investment from Scopely.As mentioned earlier, the deal represents a notable investment for Scopely parent company Savvy Games Group.Savvy purchased Scopely for $4.9 billion in July 2023 as part of its purported mission to grow the global video game industry. The multinational investment company is wholly-owned by Saudi Arabia's Public Investment Fund (PIF), a state-backed organization led by Saudi crown prince Mohammad bin Salman Al-Saud (MBS).PIF has previously invested in other notable companies including Nintendo, EA, Take-Two Interactive, Embracer Group.Those investments have raised eyebrows due to Saudi Arabia's controversial human rights record under the leadership of MBS, who who has been accused of allowing activists to be tortured and faced allegations over potential links to the murder of Washington Post journalist Jamal Khashoggi.Scopely's deal with Niantic is expected to close in 2025 but remains subject to regulatory review.