Why did Saudi Arabia capture Pokémon Go?
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When Pokemon Go came out back in 2016, I remember walking along the south bank of the River Thames here in London, glued to my phone, trying to catch Pokemon. It

It was a totally new kind of game using augmented reality to put Pokemon characters in real life places. And I was one of hundreds of millions of people around the world who took to the streets, parks, beaches, even the middle of the ocean to try and catch them all. And now Saudi Arabia's public investment fund has bought the gaming division of the company behind Pokemon Go for a whopping 3.5 billion US dollars.

So why is Saudi Arabia investing huge amounts of money in this? And what does the government stand to gain from it? That is coming up today on What in the World from the BBC World Service with me, Hannah Gelbart. The money for this deal comes from Saudi Arabia's Public Investment Fund, or PIF for short. But what exactly is it? Here is Abdirahim Saeed from BBC Arabic.

The public investment fund is basically Saudi Arabia's saving account. It's a big pot of money. And when we say big, we're really talking big. It has something like a trillion dollars in it.

It was created in 1971 and it was revamped in 2015 when it came under the control of Mohammed bin Salman. He's the crown prince of Saudi Arabia and he practically runs Saudi Arabia. He's relatively young at 39 years old and under him the PIF invested heavily to modernize the country and not just in gaming but also in other major events so

hosting Formula One, bringing football, Spanish and Italian cup finals to the country. But also you've got top level boxing events taking place there. Same thing when it comes to golf, horse racing and tennis. Where do they get all that money for all these events and all these buyouts, whether it's in gaming or sports? It's all basically down to the massive amount of money Saudi Arabia makes through the sale of oil.

Saudi Arabia is one of the world's biggest oil producers. Let's find out more about the Pokemon Go deal from BBC tech reporter Tom Gherkin. Hi, Tom. Welcome back to the podcast. Hello. How are we doing? Good, thank you. Take me back to the days of Pokemon Go. You've played it, right? Can you remind us how it works?

Oh yeah, 2016 this game launches and it's absolutely massive. It's all about trying to catch Pokémon in the real world, virtual digital monsters, walking around using your phone, pointing it at things in the real world, parks, statues, pathways,

and seeing Pikachus and Charizards on your phone screen as if they're standing there and you flick the screen and capture a Pokemon and add it to your collection. It was massively popular in 2016, still fairly popular today. - I was one of those people walking around, bumping into things, trying to catch Pokemon Go.

How popular is it today? Well, back then, I think it had approximately 200 million people playing it, and it's pumped quite a lot. That has dropped now, but it's still played by around 50 million people. That's no chump change. A game with just a million players would be very valuable, let alone a game with perhaps the biggest media licence in the world. So what is this deal with Saudi Arabia? What are they getting out of this?

Yes, let's break this down because it can be a little bit confusing. So firstly, you're probably thinking, well, hang on a second, doesn't Nintendo own Pokemon? Right, how can it be sold? Well, it kind of does. It's owned by the Pokemon company that Nintendo partly owns. And Nintendo has licensed Pokemon to a company called Niantic, which made Pokemon Go. So it's Niantic, which has sold its gaming division to Saudi Arabia. It's actually technically sold it to a company called

Scopely, and that gaming division also includes games like Pikmin, Bloom and Monster Hunter now, which are actually quite similar to Pokemon Go really. Scopely is owned by a company called Savvy Games Group, which is itself run by Saudi Arabia's public investment fund. So there's a few layers going on here, but the long and the short of it is Saudi Arabia now owns Pokemon Go. Does that mean the game is going to change?

We don't know. We do know that Scopely says the same development team working on Pokemon Go is moving to the company. So for now, at least for now, that's the same. And the intellectual property remains owned by the Pokemon company, who are famously protective of what they own.

Practically, they're almost certainly going to have to approve any changes. But let's also be realistic. Scopely has made a lot of money because of its use of monetization in its games. Scopely has games like Monopoly Go. And Monopoly Go is the second largest grossing mobile game in history. It's made billions. The way it's made billions is through in-game purchases.

I wouldn't be super surprised if down the road we did see more purchases like that popping up in Pokemon Go. How have Pokemon Go players reacted to this? I mean, you need to give your location data to play because you have to walk around and catch the Pokemon. Are people concerned?

I've seen a bit of concern online. It's one of those which is a bit complicated because obviously with any game you give it access to all these different things. Naturally, when that game gets bought by someone else, you might feel a bit worried about that. And actually the location data thing is really interesting because

Pokemon Go is a little bit different in the sense that people don't just give it their location data as they're playing, but as they're walking around, they label areas as Pokestops, they're called. Areas of local importance. Things like historical markers, monuments, art installations. In other words, the game contains this massive database of areas that local people around the whole world think are important. And I imagine that data is quite valuable, and that's part of why it cost them so much money to buy it.

And why was it that Niantic sold it? Was it just for the money? To be honest, this is a bit of a question without an answer. I mean, Niantic had some problems a couple of years ago. It closed a studio in Los Angeles. It laid off more than 200 employees. So there is something to be said there. And obviously, businesses are businesses. They find the opportunity to make a heck of a lot of money and they take it.

Truthfully, Niantic has tried a lot of things with massive licenses, a Harry Potter style game similar to Pokemon Go and others, but nothing's ever found that same success. And with the player base continuing this downwards trend I mentioned before, it's still massively popular, don't get me wrong, but it is trending downwards.

Why not cash out now? Now seems a good time to make bank, as it were. And remember what I said there just a moment ago about mapping. Niantic say it's going to focus on artificial intelligence in the future. It wants to create a new business around digital mapping. But with that data of important local areas, I suspect Niantic has something which mapping rivals like Google Maps and Apple Maps don't.

Now, let's get into the big question that everyone will be wanting answers to. What about Saudi Arabia? What have they got to gain from this big deal? Saudi Arabia would say that its motive in general is diversification. The country has an awful lot of money due to its oil reserves. Its public investment fund owns all sorts of things. It owns the football club Newcastle United. It has a 10% stake in the

in Heathrow Airport in the UK. All in all, it's believed to have almost a trillion dollars worth of assets. It wants to diversify its economy, so it's not just about oil, it's about other things too. We're going to get back to the business of gaming in just a minute, but let's pause for a moment to hear more about gaming culture within Saudi Arabia. Here's Abdirahim again.

Gaming is massive in Saudi Arabia. It's not just about the latest gaming deal to buy the developer of Pokemon Go. You've already got a young population who really cares about gaming. Something like two-thirds of Saudis are under the age of 30. You've also got the government investing heavily in entertainment and especially gaming activities for young people. So much so, there is now a dedicated government body called the General Entertainment Authority.

And in the last few years, you've got Saudi Arabia launching what they call the National Gaming and Esports Strategy. It's to modernize and diversify the economy. And it's part of a wider strategy called Vision 2030. So last year, in 2024, they hosted the Esports World Cup.

It had a prize pool of over $60 million. Now, the inaugural first title of the tournament was won by the Saudi team, who are dubbed the Falcons. On top of that, you've got Saudi Arabia hosting the 2027 Olympic eSports Games. Tom, tell me a little bit more about the PIF and how it works and some of the concerns that people have around that.

Yes, it's the public investment fund. It's controlled by the country's crown prince, whose government has been accused of human rights violations. For example, a 2019 United Nations report stated that the state of the Kingdom of Saudi Arabia was responsible for the death of Jamal Khashoggi, a journalist who was critical of the country's government legislation.

Saudi Arabia has always denied this allegation. Saudi Arabia has been investing huge amounts, billions, in sports, esports, entertainment. What are the other big games they've bought? So it all goes through this Savvy Games, this company owned by Saudi Arabia's public investment fund. And that has invested in massive gaming companies, some of the biggest companies in the industry. It owns shares in Nintendo. It owns shares in Electronic Arts, Take-Two Interactive, Capcom, some of the biggest names there are.

when it bought Scopely in 2023 for just shy of $5 billion. That purchase means it owns an awful lot of games. To put into context, a single example, Scopely doesn't just own things like Monopoly Go, that I mentioned, as I said, one of the biggest grossing there is. It owns Digit Game Studios, which recently made a Star Trek game, which is based in Ireland. So it's a massive cross-section of the industry. And here's another one. Savvy bought ESL Gaming, previously the Electronic Sports League, in 2022.

about a $1.5 billion purchase roughly. That's probably the biggest esports company in the world. It hosts competitions globally where people play competitive video games for massive prizes. And since then, Saudi Arabia has hosted the biggest esports tournament in the world in Riyadh. So its fingers are now very, very deep into the gaming industry. Some people would say that it's all part of a bid for soft power.

the allegation, the contention is that Saudi Arabia is involved in something called sports washing when it does this. Perhaps with today's topic, you might call it games washing.

The idea that people's perceptions of Saudi Arabia might change based on its ownership of things that they like. I mean, Saudi Arabia has always laughed off these sorts of allegations, by the way. Anything about sports or washing, about soft power, you know, it finds kind of ridiculous. And to be fair, Saudi Arabia makes a lot of money out of these investments. So you could just look at it that way. This is just some agency with a massive amount of money trying to make more money out of the money it already has. Why

One thing I think is really important that doesn't get discussed much around this area is how Saudi Arabia has changed over the years following these investments, in particular in the area of women's rights. If you just look at the difference between 10 years ago and now, Saudi Arabia has lifted a ban on women driving in the country. Women can open their own businesses, access jobs, education, health care without consent of a man. Women are allowed into sports stadiums. They can travel abroad without permission. Obviously, I'm not here saying there's equality in Saudi Arabia altogether.

I'm not here saying it's like a Western country in that sense, but there were obviously countless issues. But it is true that since the investments began, the country has changed significantly. It's become more liberal in that sense. And the example I always use is when WWE put on its first show in Saudi Arabia in 2014. I'm a big wrestling fan, as listeners to your podcast may well remember. Women weren't allowed to wrestle or even be mentioned at the show back in 2014. Fast forward to 2020, and there was a big banner outside the stadium in Riyadh

advertising the Women's Championship being defended. So you can't argue the country isn't becoming more liberal. And clearly these events are part of that. So this is about so much more than Pokemon Go. There is business, there is politics, there's culture. So many things changing as Saudi Arabia acquires more and more of these big players. Tom, thank you so much for joining us. No worries. Thank you.

That is it for today's episode. But before we go, I want to know if you're a Pokemon Go fan and if you'll still play. Do you have fond memories of it? Let us know. You can get in touch with us. We're on WhatsApp, Instagram, at BBC What in the World. And we are on YouTube on the BBC World Service's YouTube channel. Thank you so much for listening. I'm Hannah Gelbart. This is What in the World from the BBC World Service. And we'll be back with another episode soon. See you then.

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