Niantic shut down LA Studio, lays off 230 employees

Niantic CEO John Hanke announced yesterday that the company is laying off 230 employees and pulling out at least two of its titles, NBA All-World and Marvel: World of Heroes.

Niantic is discontinuing in-house game development and terminating 230 staff members as a result of “internal and external issues.” According to an email from Niantic CEO that was posted on the company website, the company is closing its Los Angeles studio, where the majority of the impacted employees are headquartered.

In addition to the mass layoff, the company is also shutting down two of its titles. Following four months on the App Store, Niantic is taking down NBA All-World and suspending the development of Marvel: World of Heroes as it works to streamline its portfolio and support Pokemon Go.

This is wild.

Seems their top priority is keeping GO healthy but I really think they need to start listening to the fanbase’s feedback rather than going with a “we know best” scenario.

I love playing Pokémon GO and would hate to see it go the way of these games. https://t.co/7xxuxKe6LX

— Joe Merrick (@JoeMerrick) June 29, 2023

 

Hanke elaborated on the challenges that contributed to the critical choice and cited a more competitive mobile game market and macroeconomic factors as the causes behind the layoff. After witnessing aggressive growth during COVID-19, Niantic expanded its team and incurred increased expenses to support its growth.

The company’s new initiative, however, underperformed and revenue fell to pre-pandemic levels, therefore making the change necessary.  According to CEO John Hanke, Niantic’s present goal is to balance spending with revenues while protecting the business’s key assets and promoting long-term growth.

Niantic’s hopes now hinge on AR and Pokémon Go

The only good news for Niantic is that Pokémon Go is still very popular and profitable. The augmented reality game was released in the summer of 2016, and it quickly went popular among fans of the popular Pokémon franchise. The game had a surge in popularity during pandemic lockdowns as players who were confined to their houses saw the AR title as an opportunity to engage with the outside world.

However, recent community backlash has rocked the game, notably, the nerfs to remote raids and the rolling back of an increased spawn radius that was widely popular among gamers. The impact of these changes can be observed in the company’s earnings.

Niantic generated an average of $70 million in gross in-app purchase revenue per month between July 2022 and March 2023, according to data from Sensor Tower However, since Niantic increased the remote raid pass price, it has generated an average of $53 million every month.

Hanke’s letter also highlighted Niantic’s future plans, emphasizing how the business would keep investing in augmented reality platforms to create and profit from augmented reality experiences. Niantic further asserts that it is still dedicated to its most recent initiatives, such as Pikmin Bloom, Peridot, and the upcoming Monster Hunter Now.

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