Pocket Gamer Reacts: Breaking down Scopely's blockbuster $3.5bn deal for Niantic's games business

[Music] hello and welcome to the pocketgamer.biz podcast for our first ever Pocket Gamer reacts my name is Craig Chapel I'm the head of content at pocketgamer.biz here with me today is Aaron assel our news editor thank you very much for joining Aaron hello good to be here so we're going to talk about the big news of the day which is scopely has acquired ni Antics game business so most of its games portfolio the games that are being Acquired and the games teams are Pokemon go Pikmin Bloom and Monster Hunter now they'll also take on the community building app campfire and the way farer service the games that are not joining scopely are paridot and Ingress Prime interestingly enough although the release strangely does say that all the games team is leaving so I don't know who that means is left Niantic itself is

basically spinning off to his own tech company they're going to focus on their AR technology and continue running those games that are mentioned and they're going to be Niantic spatial uh they're going to be led by John hanky so he's not coming over I guess with to scopely he's staying very much with with uh Niantic spatial so a huge deal and as we know scopely is owned Itself by Savvy games group so scopely was bought for 4.9 billion most famously known now for Monopoly go they've made a lot of other games with partner Studios as well Star Trek Fleet command is one trying I'm desperately trying to remember the other yachi with buddies sorry that they made with mediatonic star Star Trek was made with digit game studio so scopely obviously very well versed in Mobile gaming they've had huge fundraisers in the past before their acquisition this is a super interesting deal so Aaron what do you think obviously yeah we we had a an inkling of what was going on last month um after the rumors started

coming out but um the actual um announcement feels like it's come out of nowhere a little bit um been um I've just very frantically got something out on the site about it that um everyone should go and read after they've listened to this but no obviously yeah it's a huge deal any of our regulars will know that I'm a big monster hunter now player so umly that changing hands is going to be interesting but you know good to hear that the team's going with it would have been a bit more on edge if they were just buying it and leaving the the team behind and obviously Pokémon go is the flagship that changing hands feels like just a huge deal like in general like it's that is niantic's whole thing and obviously Pokémon go is so of it's got such a major part in the history of the mobile games industry I would say so yeah it changing to a new owner is like automatically you I mean it was obviously it was a massive phenomenon

when it launched everyone was playing it we've spoken before about it was one of the only games ever really that you're walking around outside and you someone's looking at their phone and you would just know that they're playing Pokemon and and you could strike up conversations with strangers quite quite a lovely time really especially in the UK where that rarely happens so yeah still it's still going strong it's we'll discuss some of the data in a bit but it's what it was but then not what it was still means it's one of the most lucrative games in the world one of the St can say is that uh according to the press release Niantic games business drove more than1 billion dollar in Revenue uh in 2024 so I think some of the things that interest me so I'm looking through I was looking through the uh press release and I think the main thing that's stuck out to me and there are three different blog posts by the way one of the Pokémon go where website two on the scopion website and

then and then the actual press L and Savvy is not mentioned in the pressure l so Savvy games group is a Saudi Arabia's uh games kind of business where they're pumping 38 billion dollar I think into games with that's kind of investments in big companies like Nintendo that they've done for fully acquiring Esports games companies again like uh scope blue and this deals perhaps so one of the arguments sorry one of the theories of why this deal is happened is is this a scoping deal right or is it a Savvy is it driven by savy games group that wants prestigious IP and then also they kind of want to they'll probably want to bring uh this is a guess but they'll probably want to make more of Pokemon go in Saudi Arabia and they'll probably want to bring some or develop a an Niantic team in Saudi and and kind of and drive that up which is what they've been doing with scopely oh

with that in mind Savvy is mentioned in one of these blog posts which surprises me like that they've just kept that name out I wonder if they kept it out because of any potential controversy or they just decided they want to focus on scopely being being the owner scopely being the experienced games company here but yeah I found that curious and I try to I'll try and find the quote so the only place it's mentioned is at the end of one of these hope posts and it just says we are incredibly lucky to be able to do deals of this scale with Savvy at ourside collectively we want to be one of the most dynamic and impactful games companies in the world finding exceptional teams of products drawn out portfolio like Niantic and it slate of real world games is key to accomplishing that mission Savvy enables us to go after our long-term Ambitions by supporting transactions of this magnitude represents one of the largest deals made by a public company in the by a private company in the last decade ranking along alongside scop Le's own

acquisition so it's basically one paragraph dedicated and I I I had I feel I felt like I had to dig through to find it so that was quite surprise to your controversy point like I might be totally off base here but um you this is hot take straight after the announcement yeah so I wonder if um because like Pokémon go is developed you know by ni in America and then like scope's based in America and obviously kind of the location data from kind of an essential part of how go works you wonder whether there's any element there of they don't whether they're a bit cautious of people reacting badly if suddenly all their location dat is going to go into Saudi Arabia so I might be totally off with that but maybe that is a factor that's interesting personally I don't think that would be a factor like they're not going to get around that when it comes to I guess the deal being approved you think that's a really interesting one but it's not like it's it's not the same situation terms of relations politically

as like the US with China no I think that would be a bit different whereas this is not that I think it's just more not everyone but like public perceptions and again it's all political stuff of Saudi Arabia um where Saudi Arabia is trying to change that and one of the ways that they're trying to do that is through games which there's another way there's another reason I'm kind of surprised like well this is your if it's prestigious IP that's going why not make a bigger thing of it but I can also see why not the the other the other thing that um I find interesting about the deal is yeah they mentioned like they're taking the games over see you imag see how happy you are what like the now is coming over Pitman Bloom is coming over again we can go some data on those but obviously the biggest driver is Pokemon go in a way I'm surprised I didn't bring paradot and Ingress over because but I guess like those games don't do anything so it's not you know they've not lost anything I'm just surprised

also want to keep maybe Sav was sorry scop was we just don't I don't know but but anyway my point is that um tune on the podcast tomorrow when I do a correction but but but uh they mentioned like mon H now Pikmin Bloon but not particularly that much and again they me of stats I just wonder like what the future is for those they you know they're reiterating their commitment to generally like these games Pokémon go in particular again that is the main FOC of all of these announcements I haven't actually checked actually if there's like a monster hunter our blog where they've done it like they have with Pokémon go put the announcement on there yeah I'll have to have a look I could do a live reaction and boot the game up in the in the background and see if it comes up with like just so you know I can confirm there's no in-game announcement as yet but um I haven't looked at the any blog post well I mean on their website but the uh so that's all interesting and then I guess the last last thing I'll say for now jum

some data is uh what what happens with Niantic spatial moving forward so I guess they have so so the press release says it's going to spin off into its own technology platform led by John hanky it will be a geospatial AI company powered by a Next Generation map enabling devices and machines to understand and interact with the physical world n spatial will continue to own and operate AR games in chis Prim read more online itic blog here so there's another blog post uh I I'm uh going have to read through that I'm curious what the future holds really for n it because I think they've already struggled to actually get anyone to ad one they've struggled to make with the world's biggest IPS I know Monster Hunter now is done okay like well right for any Studio Pitman Bloom's doing okay but it's not on the level of

Pokémon go and again they're not like even SC I wouldn't even like pman Bloom especially it's not a scopely level game anyway ranting sorry Niantic struggled to kind of bring the biggest IP merge it with his platform and release other successful games I don't I can't think of big customers that are using their platform successfully I could be wrong I don't think there are and this kind of focus on augmented reality that that they have had at least is like what future are they waiting for now you know we they've been out here for a few years obviously when well the company itself made layoffs last year or the last couple of years I'm like are you waiting for AR glasses will that ever take off is that the big bet and when you look at it I'm going to be very pessimistic here because they're obviously very talented lot but you know magic leap got billions to make its AR platforms bit different

because it's Hardware but they they couldn't make anything of it and so all this money that ntic g ntic spatials now getting is is that going to is that actually going to make this platform a success it's a it's a great exit for that team yeah I yeah curious what they do with it maybe I'm you know again they're clever people but I I don't know where it goes from here yeah it's also obviously yeah the focus is on like the AR Tech stuff rather than games but obviously when you look at games you know they have AR in them but I'd argue rarely their success comes down to the location based side of it yeah as you saying like people going out to play Pokémon go that's because you need to you know change locations while you're playing by walking around or like Monster Hunt and now you go out walking to find monsters like the AR is sort of optional it's more about the location side of it so even with yeah like a the phenomenon that was and is Pokémon go like it's not really because of the AR

side yeah it will be interesting to see what whether in a few years we'll be all wearing ar ar glasses thanks to this so uh we really didn't prep for this it was real hot TI I'm reading this like live right ntic in his blog post is saying we remain committed to creating forever games that will last Generations so that's curious I don't know if they just mean supporting games or actually making them then they go on to say this partnership ures that our games have the long-term support needed to be forever games that would enjoy for future Generations they talk about scop his ongoing investment in those but then it says second we are spinning off our geospatial AI business into a new company nitic spatial right so we we said that enabling it to scale even more rapidly but what it actually says as well is NCH spatial will be funded with 250 million of capital including $200 million from niantic's balance sheet and a $50 million in M from scop so scop

actually has a stake in this which I guess I guess they need to because this technology Powers the games they've just bought this is actually getting insane they've now like and then it goes all of n96 original investors will continue to be shareholders of ntic spatial read more from John here then it goes to another link it's like I'm counting I've got six tabs open this is crazy if you want to up that to eight there is also one on Monster Hunter Nails page and one on eight eight different announcements well that's positive I guess that they're saying presumably they're saying that those games will keep running yeah very similar wording basically saying they're excited to announce they've reached an agreement that mon are now in one pman bloom and the other um are joining scopely then you know this will be a step forward and they'll continue to build strong communities both of them say that and then you can find out even more information in N Antics an don't

it's just it's just an endless loop is it you you get stuck forever that's really that's really interesting they've done that and on Niantic just a couple other things I'm literally reading it now it says Niantic spatials goal is to lead the future of geospatial AI by building spatial intelligence that helps people better understand navigate and engage with the physical world so basically what they've been doing but they're adding more about AI now which I guess makes sense also it was quite interesting there that they've just sold for $3.5 billion 200 million well 250 billion is going to the new company yeah it leaves quite a lot of money not going which again Fair as an exit like I'm not but just interesting because I was just saying before Oh you know what's billion dollar going to do now I'm like what's 250 million really going to do in terms of just creating that market yeah then they go on to the N spatial platform which they announc think the last year visual visual positioning system which I think spoken about before and they're

developing a large geospatial Model A World model powered by large scale machine learning so get in the AI buzzwords in that enables people and machines to understand and navigate the physical world enhances spatial reasoning and large language models by providing a spatially grounded and semantically Rich understanding of Real World locations built on a proprietary database of over 30 billion posed images interesting it delivers an unparalleled foundation for geospatial AI enabling deeper contextual understanding of the real world so I guess if I was to very quickly think what any of that means stuff that we're already doing for better for map for maps and probably like you'll be able to attach uh virtual objects to the real world in a realistic and believable way is is I guess what I read from that but yeah that's so anyway that's that part that was a lot longer than I thought that was going to be after I I just but that's interesting

the extra details we'll we'll get that reported on the slite as well hopefully before you even see this I guess before we go some data any thoughts on on that obviously yeah it's going to be interesting to see what what comes of this as you say whether if it's only like only but like 250 million it's actually going into the kind of development but that really doesn't seem like enough to change the whole space and you know make AR this major thing that I think they clearly like would be want it to be but yeah the fact it hasn't happened yet yeah it just it feels like it need a lot more than that to really I guess they've already invested a lot in it and maybe there's more where that came from but they've already tried I don't I I could lier they've already tried Marvel Harry Potter like oh what's next Disney steps in Japan but that's another company I'm not sure if that uses n6 Tech or not maybe it does the last thing I didn't actually mention very quickly before we move on it was that uh obviously ntic is actually losing a lot of talent but obviously gain development Talent so along like leaders sorry for the

production of these names K kaai and Ed wo are joining scope ple I think they've been working on Pokémon go for like a long time one of them since like the start basically and and was even that ntic I think like a few years before that game even before Pokemon go and came out so kind of a big loss but a good gain for scopely and a positive for Pokemon go scopely actually provide in the press release scope actually provides a lot of data on on how the games are performing and Aon you you did uh you did your post like yesterday I think we published it yesterday but using that magic data of how is the portfolio doing it's quite interesting so I'll go through quickly some of the official stats not Revenue other than the N made a billion dollars last year which does roughly trap with the total it does actually because because uh uh like 7 million again we'll go to that set but 7 million for Pokemon go and 200 last year and a half 250 mil plus I

think now so quickly on the stats yeah Pokemon go one of the most successful games of all time they say cool good press relas but true over 20 million weekly active players uh it says it claims the game as a top 10 mobile title every year since its launch based on IAP revenue from data AI Pokémon go players have explored more than 30 billion miles together I have a friend who's probably done like 1 billion of those miles he has like multiple devices Anyway said the experience reaches players in over in over 190 countries so basically everywhere deeply engaged fan community that averages 40 minutes in Daily play time approximately half of all players return to the game seven days a week that's not you Aron is he you're doing the Monster Hunter now right yeah I'm monster hunter now seven days a weeks lately I mean they just did an update so I'm back to but yeah and then yeah in real life events 2

million tickets were sold for Pokémon go Fest in 2024 tendies have caught 150 million plus Pokémon since the Gatherings debuted so really interesting Pokemon go and then quickly the other games Pickman blue lost in 20 oh unveiled in 2021 I was gonna say I think it did launch in 21 as well did it that's that feels so long ago the uh the gave hit his higher active player count more than three years after launch took 3.94 trillion steps in in 2024 it's quite a lot of steps gathered at in iners community events in Japan the US Germany and Taiwan brought together 10,000 plus participants alone in Tokyo last year so notely they don't say some of like here's how many actual players that there are or anything like that but highest player count without saying what it is yeah I guess that's positive but that also says a lot about what the number is but then Monster Hunter now uh 15 milli plus downloads uh in just seven

months after its launch its growing player base also quickly Embrace real life events 20,000 people attended the first Monster H Monster Hunter now Carnival event in in Shibuya Japan last October over 50% of its audience plays every day of the week so that's interesting uh they mentioned C far way far but it's look like too many details there it just where it says in 2024 Alone 6 billion plus people checked in to in-person meetups via campfire that's interesting the Wayfair Community has added more than 11.5 million New Way spot locations in ntic gam since 2019 that's a lot of stats to for out everyone from scopely but Aaron you've got like you know estimates of the revenue figures yeah so um yeah so these are estimates from ATM and yeah so earlier this week I did a bit of a data dive um quite a article so yeah again

worth looking on the website we'll put link description yeah um so yeah so over the past decade at Magic estimates that ntic games portfolio has generated 8.9 billion dollars so that's gross play spending from the Apple App Store and Google play so you know any Web Store revenue or alternative app stores isn't included but yeah so 8.9 billion across the portfolio so about 95% of that is Pokémon go which has made 8.5 billion yeah very successful game it's done that in I me it's coming up on its 9th anniversary still roughly tracking that kind of billion a year yeah 2024 uh was its worst year yet at best weekend in seven months so since

the anniversary uh with Pokémon go tour univer Global uh so yeah Revenue spiked quite dramatically over those couple of days so yeah clearly still when when they do these big events they they pay off Monster Hunter now meanwhile has made 276 million growths uh so it's just coming up on it year and a half anniversary yeah that's niantic's second biggest or most lucrative game and as the press release mentioned stuff like the carnival 20124 event went well and kind of yeah following the Pokémon go formula of doing an in-person paid event that people could attend and then doing kind of a global online version where you I guess you miss out on the community side of it but at least everyone can get access without flying to Japan or America or wherever yeah mon and our's Revenue has declined quite considerably

since it came out so like in October 2023 made 42 A2 million and it made just under six in February this year so clearly it has declined quite considerably I guess it'll be interesting to see yeah how much scopely gets involved in the development and whether they turn that back around again or whether the summer months are going to encourage people anyway yeah it's also quite noteworthy that um so capcom's just released monster hter Wilds a few weeks ago and that hasn't really done much to I sh by that I know you had a you can but there's a good reason as to why like you haven't seen like a revenue spike in it but I'm just surprised they didn't make more of it yeah I would have thought it would have driven more people to like spend anyway but also so like they did a kind of celebratory tie-in event of monster Wilds coming out and and so they've added one monster from Wild so far and

playing through it so there's the game has multiple like quest lines that come out to tie different things so this monster hunter Wilds one was a 19 step quest line of like you know go out and fight so many monsters be like step one and then go and collect so many resources you have to go through this long event and step 18 out of 19 is where you actually get to fight the thing from Monster hun to Wilds and after you've done that it can start to spawn on your map like normally but it won't do that before you've hit step 18 of the quest line it's just kind of wild if you like that that the way they've done it because the game has like spikes right when they they do interesting things and then this is a game that that the the sorry the the PC console release it's it's like 8 8 million copies in like three days yeah it's like their best that in the mobile game yeah CU I think it's

record-breaking for Capcom like for a new game release um even outside of Monster Hunter just in general like the opening weekend so yeah the fact that they didn't you know they could have done a whole big thing of adding you know a bunch of new monsters and they do a they've done a few kind of paid passes before where you only get access to like special monsters if you've bought a ticket like they could have done there's so many options and they went with like the least expected one really and then yeah so lastly with Pikmin Bloom so although it's yeah quite a lot smaller than especially Pokemon go but also down to now so it's made about 80 million in gross revenue in three and a half years almost and so yeah that's less than 1% of niantic's entire portfolios earnings which is kind of crazy to think but um it has been growing and um yeah December 2024 was it best month yet in Revenue it

increased 65% year-over-year in December and made 4.4 million that month so just tying that back to Monster Hunter now that is still less than Monster Hunter now made in February this year which was its worst month so pikmin's best is still less than monster hun is worse but it's at least kind of on that upward trajectory which Monster Hunter now is not at the moment I think guess some of my final final thoughts on this after you talking about the revenue there it's like I think it's another reason why it feels like a Savvy acquisition and not a scopely acquisition is that again it's Prestige of having Pokemon basically and maybe some other IPS if they can get into work so they can use the ntic platform and the expertise that they've now got but ntic is not a growing company their games are not growing Pikmin Bloom is at a small level like Monster Hunter now yeah like said had it worst month and then Pokémon go revenue

is is ultimately way down still like extremely lucrative but usually I think when you make a 3.5 billion acquisition as a mobile games company you're you're requiring something that's either like growing or is mature and revenues very stable and maybe you could grow it not games that are declining from their best and then also where does the next game come from because it's already been like I said earlier it's kind of in a way as it's proven how difficult it is to make these kinds of games so will can Niantic can this team if that is even a focus make a new game that again grows this investment so yeah it seems very Savvy Le but but all that said I think it's actually I think actually scopely and sevy is is a pretty good home for the people that work there and these games because Savvy is sorry scopely is ultimately an extremely well-run mobile game business do it for a long time

repeat successes they know exactly uh they know exactly what they're doing basically and ultimately with Savvy you know it's a kind of a games and Esports kind of tech in general it's a basically a key Cornerstone of Saudi Arabia's future growth and the other thing to mention that you mentioned previously is uh ultimately after all this completes and I assume the conversations have already taken place but what what the IP holders thing I guess that's the most important thing of this so I was thinking yeah on the Pikmin Bloom note so I'm pretty sure Savvy has shares in like Nintendo already that you mentioned now was speaking about it I was like oh yeah they own the Nintendo Stak they also own a Stak in Capcom right yeah okay so actually it actually kind of makes quite a lot of sense right I forgot about the Capcom connection so there's a lot there's actually a lot of connections between it's interesting I didn't know that any final thoughts Aaron it's a lot to take in I'm sure

there's been a lot of big deals yeah I'm sure um I'll have some kind of fresh thoughts for the tomorrow's recording yeah just obviously a big deal hopeful that um Monster Hunter now is going to survive the transition that's my main um kind of selfish personal stake in the matter yeah obviously huge news congrats to Niantic for making a game that someone would buy for that much money nine years down the line yeah I mean ultimately is really I I know this is kind of a lightning in a bottle hard to recapture because poke it's basically the game the Pokemon game everyone wanted and the tech empowered that and I guess it did kind of their initial ambition to kind of get people outside and playing was achieved mostly with this one game if that's still their ambition we'll see we'll see what the future brings for both n6 B and now these games under scope please Banner can't wait for the next billion dollar deal there's been so many Acquisitions just this week so Investments really this week and acquisition is announced lately obviously head of GDC because

everyone wants to talk about it at the show will be there but yeah thanks very much for that Aaron thanks everyone for tuning in for our wabbling hot takes uh on what's going on we'll see you on the next show and have a good day goodbye