Pokémon Go Developer Niantic Announces Restructure Resulting In Over 200 Layoffs, Cancels Upcoming Marvel Game

Pokémon Go developer Niantic has announced a massive restructuring, where it will be closing its Los Angeles office, terminating over 200 employees, and scaling back development on a few titles as it narrows its focus towards supporting current titles while increasing its commitment to mixed and augmented reality development.

In an email sent to staff by CEO John Hanke (which you can read here), he explains that the pandemic-era surge of recruitment and expanding pipeline of projects ballooned to the point that, once the pandemic ended, the resulting expenses outpaced its revenue. 

“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,” Hanke writes. Our revenue dropped to pre-Covid level after Covid and our new investments in platforms and games haven’t produced revenues comparable with the investment. This change will bring expenses and revenue back into line while preserving our core assets and long term upside.”

Hanke also mentions that the mobile market is becoming increasingly crowded and mobile advertising has changed, making it harder to launch titles in large numbers. He also points to technology challenges creating an AR market that has developed slower than anticipated due to an overall lack of investment caused by what he describes as a “global macroeconomic slowdown.”

Niantic reduces its staff. The biggest cut is that it’s shutting down its LA office, which will result in 230 employees losing their jobs. It’s also ending support for NBA All-World, its mobile AR NBA game that launched in January. Marvel: World of Heroes is a mobile AR game that was to be based on popular comics. It has been cancelled.  

Hanke wrote in an email that we are also responsible for our performance. “Today’s highly competitive mobile gaming market requires dazzling quality and innovation. A social base and strong monetization are also required to achieve viral growth. Platform tools are needed to enable teams to quickly build engaging features with high quality. It is important that our AR platform delivers the features developers need in a stable and reliable manner. “We haven’t met all our goals.”

Niantic will instead focus on supporting Pokémon Go (singled out as a “top priority”), Pikmin Bloom, Peridot, Ingress, and the recently announced Monster Hunter Now. It also has plans to expand the creation of new tools and AR-based experiences. Niantic as a company wants to streamline their workflows to cut down on leadership redundancies, and to clarify decision-making. 

Hanke says that while you’ll see some changes to our culture, the mission of our company remains constant. We remain dedicated to creating products and technologies that have a positive impact on the world, and that are healthy for both the company as well as the community.