Pokémon Go developer Niantic is closing its LA studio, resulting in hundreds of job losses.
The AR games developer has confirmed that 230 employees will lose their jobs as the company shutters its Los Angeles studio.
“I have made the decision to narrow our focus for mobile game investments,” said Niantic CEO John Hanke in an email to employees. “Specifically, this means we will be closing our LA studio, reducing our game platform team, and making additional reductions across the company… This means we are laying off around 230 Niantics.”
When it comes to Niantic’s games, there are some further casualties. NBA All-World will close, and Niantic is ceasing production of Marvel: World of Heroes as it seeks to consolidate its portfolio and continue to support Pokemon Go.
‘Pokémon Go is the top priority’
Niantic hit mainstream success with the release of Pokémon Go – its AR-driven Pokémon game that essentially brings Pokémon training into the real world via your mobile phone.
The concept lined up perfectly with The Pokémon Company’s flagship game series, and the mobile game went on to huge success. However, it looks as though that success won’t be repeated for the long-awaited Marvel game.
“We have allowed our expenses to grow faster than revenue,” Hanke claimed. “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. This change will bring expenses and revenue back into line while preserving our core assets and long-term upside.”
Many industries have experienced a post-COVID slowdown – especially those that thrived during the pandemic, such as the games industry. Unfortunately for Niantic, this means hundreds of layoffs to right the company’s finances following this period of rapid expansion. These layoffs are even bigger than the ones that struck Niantic last year, when the company laid of 85 to 90 employees while canceling four projects.
“The top priority is to keep Pokémon Go healthy and growing as a forever game,” said Hanke. “While we made some adjustments to the Pokémon Go team, our investment in the product and team continues to grow.”
Additionally, Niantic says it remains committed to its more recent projects, including Pikmin Bloom, Peridot, and the upcoming Monster Hunter Now. It is also building toward an emerging class of mixed reality devices and AR glasses.
IGN’s Pokémon Go review gave it 7/10 and said: “Right now, Pokemon Go is an incredible, can’t-miss social experience — like Pokemon is actually real and everyone is on board — but its RPG mechanics and combat don’t have nearly enough depth to support itself in the long term. Even if it will be short-lived, though, there’s no doubt it’s exciting to be a part of while it lasts.”
Pokémon Go continues to be popular and successful, but it has has been rocked by numerous community controversies, including rolling back an increased spawn radius that had been popular with players. Other Niantic projects, from Harry Potter to Pikmin Bloom, have struggled to catch on.
Want to read more about Pokemon Go? Check out Niantic’s response to remote raid criticism as well as why they reverted recent spawn radius changes.
Ryan Leston is an entertainment journalist and film critic for IGN. You can follow him on Twitter.
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