The Italians joined the race for the Argentine after selling star striker Edinson Cavani to Paris Saint Germain. Arsenal had fought off competition from Juventus to be favourites to land the forward before Napoli registered their interest.
The Gunners have been after Higuain since the seasons end and have reportedly agreed a £22 million deal while personal terms were also agreed. However, Madrid president Florentino Perez dismissed those links by insisting there was no offer on the table for the striker.
He also stated he wished for Higuain to stay at Real Madrid, as did new boss Carlo Ancelotti. The striker however remained adamant on a move away and has seemingly agreed a switch to Serie A.
The news is a bitter blow to Arsenal fans who were relishing the prospect of Higuain linking up with the squad next season, although the club have moved their attention to Liverpool attacker Luis Suarez.
Wenger has been focusing on a deal to lure the Uruguayan to the Emirates after the move for Gonzalo Higuain went cold. Liverpool have been true to their word as they bid to keep their star asset but Arsenal seem determined not to lose out on another one of their targets.
Of course, Higuain was also reported to have agreed a move to Arsenal and until the clubs confirm a deal, nothing can be verified meaning Higuain is still available to Arsenal, but with Wenger changing his transfer focus, the Napoli rumours seem to be true.