‘Pokémon Go’ developer Niantic is laying off 230 employees
It’s also canceling ‘NBA All-World’ and ‘Marvel: World of Heroes.’
Niantic is joining the long list of companies laying off employees. The studio published an “organizational update” (after the internal memo was leaked to Kotaku) announcing that it would let go of 230 employees. In addition, the company is shutting down its Los Angeles studio and canceling two licensed games: NBA All-World and Marvel: World of Heroes. The only good news for fans is that Pokémon Go, still its flagship product, will live to fight another day.
“I have made the decision to narrow our focus for mobile game investments, concentrating on first party games that most strongly embody our core values of location and local social communities,” wrote CEO John Hanke. “The mobile gaming market is very mature and only the best and most differentiated titles have a chance to succeed. We also want to increase our focus on building for the emerging class of MR devices and future AR glasses.”
Although nobody likes hearing about layoffs, Hanke’s letter seems forthcoming and candid about the company’s challenges and the mistakes he and the leadership team made. He attributes the downsizing to the studio growing its expenses faster than its revenue. “In the wake of the revenue surge we saw during Covid, we grew our headcount and related expenses in order to pursue growth more aggressively, expanding existing game teams, our AR platform work, new game projects and roles that support our products and our employees. Post Covid, our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments.” The CEO expects the reductions to “bring expenses and revenue back into line” without shuttering its most valuable property.
On that topic, Hanke said, “The top priority is to keep Pokémon Go healthy and growing as a forever game. While we made some adjustments to the Pokémon Go team, our investment in the product and team continues to grow.” The phone-based AR game launched in the summer of 2016 and instantly became a viral sensation; it also enjoyed a resurgence in popularity during pandemic lockdowns as homebound gamers used the explorative game as an excuse to connect with a world beyond their overly familiar four walls. Just last year, the studio launched a social app for the game that lets players organize and chat.
The letter adds that the AR market “developing more slowly than anticipated” was another factor. Niantic’s games would be ideal for on-the-go AR, which the industry eventually expects to materialize as smart glasses that can pass for standard prescription specs. However, as Apple’s Vision Pro made clear, that future is still likely a ways off. Today’s wearable AR, also including the Meta Quest Pro, is home-based gear designed for work and entertainment in the comfort of your home or office. Although adaptations of Pokémon Go types of experiences may work there to some degree, the company’s trademark approach is tailor-made for AR that isn’t yet available. Niantic may well end up waiting five to 10 years to see consumer-friendly versions of that type of augmented reality — and apparently, that required some reconfiguring.
