Niantic to Cut 230 Jobs as ‘Pokémon Go’ Developer Downsizes
Niantic is set to join the growing number of companies downsizing their workforce. Following the leak of an internal memo to Kotaku, the studio has released an official “organizational update” revealing plans to lay off 230 employees. Furthermore, Niantic will be closing its Los Angeles studio and discontinuing two licensed games, namely NBA All-World and Marvel: World of Heroes. However, fans can take solace in the fact that Pokémon Go, the company’s main product, will continue to thrive.
“I’ve made the decision to narrow our focus on mobile gaming investments and focus on first party games that most strongly embody our core values around location and local social communities,” wrote CEO John Hanke. “The mobile game market is very mature and only the best and most distinctive games have a chance to succeed. We also want to increase our focus on building emerging class MR devices and future AR glasses.
Although no one wants to hear about layoffs, Hanke’s letter seems forthcoming and candid about the company’s challenges and the mistakes he and the management team made. He attributes the downsizing to the fact that the studio grew its expenses faster than its income. “As a result of the increase in revenue we saw during Covid, we increased our headcount and related expenses to pursue growth more aggressively, expanding existing game teams, our AR platform work, new game projects and roles that support our products and employees. . After Covid, our turnover returned to pre-Covid levels, and new games and platform projects have not generated income commensurate with these investments. The CEO expects the reductions to “get expenses and revenue back in line” without shutting down its most valuable asset.
The project said on this topic: “The primary goal is to keep Pokémon Go as a healthy and growing perpetual game. While we made some changes to the Pokémon Go team, our investment in the product and team continues to grow.” The phone-based AR game was launched in the summer of 2016 and immediately became a viral sensation; it also enjoyed a surge in popularity during pandemic shutdowns, as home gamers used the exploratory game as an excuse to connect with the world outside their all-too-familiar four walls. Just last year, the studio released a social app for the game that allows players to organize and chat.
The letter adds that the AR market “developing more slowly than expected” was another factor. Niantic’s games would be an ideal fit for on-the-go AR, which the industry expects to eventually materialize as smart glasses that meet standard prescription requirements. However, as Apple’s Vision Pro made clear, the future is likely still a long way off. Today’s wearable AR, including the Meta Quest Pro, is home gear designed for work and entertainment in the comfort of your home or office. While adaptations of Pokémon Go-like experiences may work there to some extent, the company’s trademark approach is tailor-made for AR, which is not yet available. Niantic may well have to wait five to 10 years to see consumer-friendly versions of this type of augmented reality — and apparently that required some reconfiguration.
