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Niantic Sells Game Division to Saudi-Owned Scopely for $3.5 Billion Amid Shift to Geospatial Tech

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Niantic Labs, the maker of the highly successful “Pokémon Go”, announced on Wednesday that it would sell its video game division to Saudi Arabia-owned Scopely for $3.5 billion. This move marks a significant shift for Niantic, which will now focus on geospatial technology after failing to replicate the overwhelming success of its 2016 mobile game hit.

The sale is part of a broader strategy by Saudi Arabia to bolster its gaming sector. The kingdom’s sovereign wealth fund, through Savvy Games, had already acquired Scopely for $4.9 billion in 2023, as part of its effort to diversify its economy away from fossil fuels. The transaction will advance Saudi Arabia’s ambitions of becoming the “ultimate global hub” for the gaming industry.

In addition to the sale, Niantic will distribute an extra $350 million to its equity holders. Furthermore, the company will spin off its geospatial AI business into a new entity, Niantic Spatial, led by Niantic founder and CEO John Hanke. Niantic Spatial will be funded with $250 million, of which $200 million will come from Niantic’s balance sheet and $50 million from Scopely. Niantic’s original investors will continue to hold shares in Niantic Spatial.

This strategic shift follows several challenging years for Niantic. After the phenomenal success of “Pokémon Go”, the company struggled to replicate that magic with other titles, including the “Harry Potter: Wizards Unite” game, which was shut down in 2022. Niantic also had to make layoffs in 2022 and 2023, further signaling the company’s struggles.

For Saudi Arabia, the deal aligns with its plan to invest nearly $38 billion in the global gaming industry through Savvy Games Group, which is already a significant investor in major video game companies, including a 7.54% stake in Nintendo.

Foxconn Open to Buying Stake in Nissan for Potential Cooperation

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Foxconn (2317.TW), Taiwan’s leading electronics manufacturer, has expressed interest in purchasing a stake in Nissan (7201.T), but emphasized that its primary goal is to collaborate rather than invest in the automaker. Chairman Young Liu stated on Wednesday that Foxconn would consider buying shares if cooperation with Nissan required it, but reiterated that acquiring shares was not their main focus.

Foxconn is in discussions with Renault (RENA.PA), Nissan’s largest shareholder, about potential collaboration. These comments come amid uncertainty surrounding Nissan’s future after it stepped away from merger talks with rival Honda (7267.T), which would have created the world’s fourth-largest automaker.

Sources have indicated that Nissan and Honda, who had been exploring a merger, are expected to announce the end of their talks on Thursday due to growing differences between the two companies. This deal would have been a significant shift in an automotive industry facing mounting pressure from electric vehicle (EV) manufacturers, particularly China’s BYD (002594.SZ).

In light of the changing landscape, Nissan is reportedly open to partnerships with new players, including Foxconn, which is best known for its role as Apple’s primary iPhone manufacturer. While Foxconn seeks to diversify its business, it is not looking to establish itself as an automotive brand. Instead, it intends to offer commissioned design and manufacturing services for electric vehicles.

Neither Nissan nor Renault has commented on Foxconn’s chairman’s statements regarding potential collaboration.

Bridgewater’s Pure Alpha Fund Surges 8.2% in January Amid Market Volatility

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Bridgewater Associates’ flagship hedge fund, Pure Alpha, saw a notable gain of 8.2% in January, defying the broader market’s volatility, which included a downturn in AI-related stocks and geopolitical uncertainties. While the exact drivers behind the fund’s performance remain unclear, the surge marks a positive start for the year for the firm’s macro-focused strategy.

In comparison, last year, Pure Alpha experienced a more modest rise of 11.3%, driven by a mix of global economic events. In January, the tech sector faced a significant blow when Chinese AI startup DeepSeek claimed its model was either on par with or surpassed U.S. leaders like Nvidia at a fraction of the cost. This revelation caused Nvidia’s stock to plunge by 17%, contributing to broader sell-offs in the AI space.

Additionally, January saw market turbulence spurred by U.S. President Donald Trump’s tariff threats on Canada, Mexico, and China, which added to the uncertain economic backdrop. Although Trump later suspended tariffs on Mexico and Canada, the trade dispute with China remained unresolved, adding further pressure on global markets.

Despite these challenges, U.S. stock indices ended January in the positive, with the S&P 500 rising by 2.7%, the Nasdaq Composite up by 1.64%, and the Dow Jones Industrial Average gaining 4.7%. Bridgewater’s strong performance during this volatile period underscores the fund’s ability to navigate market challenges effectively.

Karen Karniol-Tambour, co-chief investment officer at Bridgewater, advised investors at a conference in Miami to diversify away from U.S. equities and increase their bond holdings to hedge against potential growth slowdowns. She highlighted that the bar for continued U.S. equity outperformance had risen significantly after a period of extraordinary gains.