Niantic, the developer behind the popular mobile game Pokemon GO, has cut ties with Nintendo (NTDOF) as it sells its entire gaming division to Scopely. The business is being sold for $3.5 billion, with Niantic adding an extra $350 million to the deal. With this, Scopely will take over the operations of Pokemon GO and Pikmin Bloom, both Nintendo properties. The deal also includes Monster Hunter Now, a collaboration with game developer Capcom (CCOEY).
It makes sense that Scopely would be interested in acquiring Niantic’s game division. Pokemon GO alone justifies the purchase with its $1 billion in annual revenue. It’s also remained in the top 10 mobile games since its release nine years ago and had over 100 million unique players last year.
This deal also allows Niantic to shift focus to other goals. That includes a spinoff of its geospatial artificial intelligence (AI) business, Niantic Spatial, with $200 million in funds from Niantic and a $50 million investment from Scopely.
What This Means for Pokemon GO
While some gamers might be worried about the future of Pokemon GO, the Niantic team behind the game is included in the sale to Scopely. That also includes the teams behind Pikman Bloom and Monster Hunter Now. This should allow Scopely to continue to maintain the current quality of these games.
Ed Wu, SVP of Pokemon GO, said, “With Scopely’s full commitment, experience, and resources, we’re going to make Pokémon GO the very best it can be – from incredible battles for thousands of Trainers at a time at our live events to new ways to connect to your friends and community.”
Is NTDOF Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Nintendo is Moderate Buy based on five Buy, two Hold, and one Sell ratings over the last three months. With that comes an average price target of $79.57, a high of $104.41, and a low of $52.07. This represents a potential 12.45% upside for NTDOF stock.
See more NTDOF stock analyst ratings
Questions or Comments about the article? Write to editor@tipranks.com