Niantic Labs said it would sell its video game division to Saudi Arabia-owned Scopely for 3.5bn, as the US augmented reality firm shifts focus to geospatial technology after failing to recreate the success of its 2016 smash hit Pokémon Go. The deal, announced on Wednesday, also advances Saudi Arabia's ambitions to become the "ultimate global hub" for gaming. The kingdom's sovereign wealth fund, via Savvy Games, bought Scopely for 4.9bn in 2023 as part of a broader push by the country to diversify beyond fossil fuels. Niantic said it would distribute an extra 350m to its equity holders under the deal. It will also spin off its geospatial artificial intelligence (AI) business into a new firm called Niantic Spatial, which will be led by the Niantic founder and CEO, John Hanke.