Niantic, the creator of the once revolutionary augmented reality game Pokémon Go, is reportedly contemplating a significant business move. According to industry sources, discussions are underway for the sale of its video game division, with an estimated valuation of around $3.5 billion. This comes as a contrast to the company's previous funding round in 2021, where it was valued at $9 billion.

Despite ongoing player engagement, Pokémon Go has witnessed a notable shift in user numbers and revenue streams. Midway through last year, the game reported approximately 80 million monthly users—a considerable drop from its peak of 232 million active players. The financial impact is evident, with annual revenues now standing at roughly half of what they were during the game’s heyday. During those prosperous times, Pokémon Go generated nearly a billion dollars annually.

The challenge for Niantic extends beyond Pokémon Go. Efforts to replicate the success have met with limited results. Subsequent titles such as Harry Potter: Wizards Unite and NBA All World struggled to maintain longevity, with the former lasting only three years and the latter surviving just five months. While Pikmin Bloom and Monster Hunter Now continue to operate, they have not achieved the same level of commercial success as their predecessor. Additionally, Niantic faced workforce reductions and project cancellations in recent years, reflecting broader challenges within the gaming industry.

In light of these changes, Niantic's potential partnership with Scopely, owned by Savvy Games Group, signals a strategic realignment. Savvy Games Group, linked to Saudi Arabia’s Public Investment Fund, holds stakes in major gaming companies like EA, Activision, and Nintendo. This move could herald a new chapter for Niantic, emphasizing adaptability and resilience in a rapidly evolving market. It underscores the importance of innovation and strategic partnerships in sustaining long-term growth and success in the competitive world of gaming.