Ingress maker Niantic spins off from Google and raises up to $30M from Pokémon and Nintendo

Niantic, the Google-spawned company that created the popular mobile game Ingress, is spinning out on its own. It has raised up to $30 million from Nintendo, the Pokémon Company Group, and Google.

Niantic makes “real-world games,” or mobile titles that mix virtual gameplay with locations in the real world. Niantic has teamed up with Nintendo and the Pokémon Company to create Pokémon Go, where you can hunt for classic animated characters in real-world locations using your phone or a new device from Nintendo dubbed the Pokémon Go Plus.

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Under the deal, the companies are investing $20 million upfront and an additional $10 million upon achieving certain milestones related to the launch of Pokémon Go. The spin-off is one of the first to happen under Google’s new structure, with a holding company called Alphabet owning Google and a number of other ventures. The deal is one of the most significant game company investments of the year, and it gives Niantic some very powerful allies.

“Now the company is owned by Google, the new investors, and the employees,” said John Hanke, the chief executive of Niantic. “When we started thinking about what to do after Ingress, Pokémon immediately came to mind.”

Google and Nintendo teamed up on an April Fool’s Day prank in 2014 to add Pokémon creatures to Google Maps on iOS and Android. When Hanke and his crew pitched their idea, the Pokémon Company and its creators were already fans of Ingress.

“It was a great first meeting as they were already aligned with the vision,” Hanke said.

Those meetings led to the investment from The Pokémon Company and Nintendo. Google is taking a minority stake. Niantic can still take in more investment from other companies if it wishes, Hanke said.

“It’s pretty open-ended, and there is ample opportunity to go deeper with Nintendo,” he said. “There are other opportunities to work together.”

The collaboration suggests the potential for innovation in the combination of massively multiplayer mobile online games, such as the platform that supports Ingress, and brands such as those created by Nintendo and The Pokémon Company, which manages the Pokémon brand that was launched in Japan in 1996. The challenge will be to make the animations look beautiful on mobile phone screens, as they are mixed with the real world, and figuring out where to place the creatures in the real world, Hanke said.

Ingress is a sci-fi game that pits two factions against each other for control of real-world sites such as civic monuments. It has been downloaded more than 13 million times.

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Hanke said that the company will use the money to develop Pokémon Go, which is expected to debut on iOS and Google Play in 2016. Fans will be able to search in the real world to discover Pokémon critters. The game will be one of the first to take Nintendo’s brands, which have been locked on Nintendo hardware in the past, into the new world of smartphones. As such, it is a strategic bet by Nintendo and The Pokémon Company to broaden their reach to the new audiences on mobile, which reaches more than a billion gamers.

“Pokémon’s strategic investment in Niantic paves the way for a social-mobile experience the world has never seen before,” said Tsunekazu Ishihara, the president and CEO of The Pokémon Company. “The Pokémon Company is committed to partnering with companies like Niantic that share the same spirit of community and innovation.”

A representative from The Pokémon Company will join the board of Niantic.

“Niantic has shown the great potential of mixing geolocation technology, dynamic storytelling, and innovative game design, and we’re excited to continue supporting the team on their journey,” said Don Harrison, the vice president of corporate development at Google.

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Hanke, the co-creator of Google Earth (and its predecessor Keyhole), started Niantic in San Francisco as a separate, stand-alone division within Google. Niantic will continue to hold a series of real-world events for Ingress, and it will continue to build out the platform.

Hanke said that the platform will be available for other developers to make real-world games in the future. Niantic has about 30 employees and is expected to double in size in the next year.

“We are structuring the company to go after that opportunity in real-world games,” he said.

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