Niantic, the creator of the popular Pokemon Go game, has announced plans to reduce its workforce by 25% and shut down its Los Angeles studio, as the gaming industry experiences a decline in demand following the surge in downloads during the pandemic. The company will also be canceling two games in its portfolio.
Niantic’s CEO, John Hanke, explained that the firm had allowed its expenses to outpace its revenue growth. The augmented-reality game Pokemon Go gained worldwide popularity upon its release in 2016, breaking app store records for weekly downloads. Hanke emphasized the importance of maintaining the health and growth of Pokemon Go as a long-term game.
However, since its launch, the mobile market has become increasingly crowded, and changes in the app store and mobile advertising landscape have made it challenging to launch new mobile games at scale, according to Hanke.
Around 230 employees across various departments, including the game platform team, will be impacted by the job cuts. Niantic will also retire its NBA All-World game, released in January, and halt production of its Marvel World of Heroes title.
Pokemon Go enthusiasts famously gathered in public spaces to catch virtual creatures like Pikachu and Snorlax, contributing to the game’s immense popularity. However, incidents such as car crashes, muggings, injuries, and even fatalities occurred as some users disregarded safety warnings.
Last year, Niantic canceled four projects and downsized its workforce by approximately 8%. The recent workforce reduction follows reports in May indicating a decline in Pokemon Go’s revenue. While Niantic has refuted those estimates, stating that its revenue for 2023 is higher than the previous year, the company, as a private entity, is not obliged to disclose its earnings publicly.
