We’ve seen plenty of gaming companies streamline their workforce this year, from Electronic Arts to Firaxis Games and even Microsoft, among others. Now, Niantic is joining this unfortunate trend.
Niantic CEO John Hanke announced the job cuts in an email sent to employees last Thursday. The company is letting go of 230 employees as part of its reorganization. The company is also closing down its studio in Los Angeles in a bid to lower overhead.
The Pokémon Go developer is also shutting down support for NBA All-World just four months after the game was released. The studio is also discontinuing development for the upcoming Marvel: World of Heroes game.
“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,” Hanke wrote. “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.”
Niantic is banking on the success of games like Pikmin Bloom, Peridot, and the upcoming Monster Hunter Now. The company will also continue to focus on its flagship title Pokémon Go.
“Today’s highly competitive mobile gaming market requires dazzling quality and innovation. It also requires strong monetization and a social core which can drive viral growth and long term engagement,” Hanke continues. “Teams need platform tools that are force multipliers, enabling them to build at the highest quality with powerful engagement features quickly and efficiently. Our AR map and platform must deliver the features that developers want in a robust and reliable way.”
Niantic saw a surge in revenue during the Covid pandemic and the company responded by increasing its workforce to meet the demand. However, revenues have returned to pre-pandemic levels, and new games from the company “have not delivered revenues commensurate with those investments.”
The layoffs and the cancellation of games will “bring expenses and revenue back into line while preserving our core assets and long-term upside.”
According to Hanke, the culture within Niantic is changing as a result, and will become a “more direct and results-based” company. “The leadership team and I are committed to cutting out unnecessary processes, duplicate lines of authority, and unclear decision making,” Hanke said.
Outside of the companies already mentioned, The Embracer Group and Take-Two Interactive also had layoffs earlier this year.
