Pokémon Go developer Niantic has announced a major restructuring, where it will close its Los Angeles office, terminate contracts with more than 200 employees, and scale back development on some titles as it collects revenue. narrow focus towards supporting existing titles while increasing commitment to hybrid and augmented titles. development reality.
In an email sent by CEO John Hanke to employees (you can read This), he explains that the increase in hiring during the pandemic and the expansion of the project process has skyrocketed to the point where, after the pandemic is over, the costs incurred far outweigh the revenue.
“Due to the spike in revenue we’ve seen during the Covid era, we’ve increased our headcount and associated costs in pursuit of stronger growth, expanding our existing gaming teams, operating on the AR platform, new game projects, and roles that support our products and employees,” Hanke wrote. Post-Covid, our revenue has returned to pre-Covid levels, and new games and platform projects are not generating revenue commensurate with those investments. This change will bring costs and revenue back in line while preserving our core assets and long-term growth.”
Hanke also cites that the increasingly crowded mobile market and changes to mobile advertising make it difficult to launch new titles at scale. He also pointed to technological challenges creating a slower-growing AR market than anticipated due to an overall lack of investment caused by what he described as a “global macroeconomic downturn”.
Therefore, Niantic is shrinking. The biggest cut is that it closes the LA office, which will put 230 employees out of work. It also ends support for NBA around the worldAR NBA mobile game launched in January. Marvel: World of HeroesAn upcoming mobile AR game based on the popular comic book universe, has also been cancelled.
“We are also responsible for our own performance,” Hanke wrote in the email. “Today’s highly competitive mobile game market demands incredible quality and innovation. It also requires strong monetization and a social core that can drive viral growth. and long-lasting engagement Teams need platform tools that multiply, allowing them to build the highest quality with powerful interactive features quickly and efficiently. Our AR map had to deliver the features developers wanted in a powerful and reliable way. We didn’t meet our goals in all of these areas.”
Niantic will continue to support Pokémon Go (considered a “top priority”), Pikmin Bloom, Peridot, Ingress, and the recently announced apps. Monster Hunter now. The company also plans to strengthen the development of tools and experiences for emerging MR devices (such as the Meta Quest Pro and Apple Vision Pro) and AR platforms. Overall, Niantic wanted to streamline its workflow to reduce leadership redundancy and unclear decision-making.
Hanke writes: “While you will see cultural changes as we evolve into our newest form, our mission remains the same. “We remain committed to building purposeful products and technologies that make the world a better place than it was before, serving both our needs as a company and the needs of our customers.” our community of developers and Niantic Explorers in a healthy and positive way.”