Niantic, creator of the hugely popular Pokemon Go game, has laid off 230 employees as the gaming industry faces a slowdown. Announcing the layoffs and major organisational changes, including cancellation of its NBA and Marvel games, CEO John Hanke said in a statement: “We have allowed our expenses to grow faster than our revenue.”
Hanke said the company saw a surge in revenue, and headcount, during the Covid-19 pandemic, but now revenue has returned to pre-pandemic levels. The company, which is closing down its Los Angeles studio, will also retire its NBA All-World game, which was released in January, and stop production of its Marvel World of Heroes title.
According to reports, the company will focus on developing and maintaining its cash-cow, augmented reality game Pokemon Go, which became a global sensation when it was launched in 2016. When the game craze picked up, people poured onto public spaces to chase down characters like Pikachu. In fact, there were multiple reports of people risking safety as they mindlessly walked onto busy roads in search of the virtual characters. The game has been pulling in more than $1 billion in in-app purchases each year since 2020, Techcrunch stated in a report.
The company will still develop and support games like Pikmin Bloom, Peridot, and Monster Hunter Now. In his note to employees, Hank also mentioned that the company wants to focus on mixed-reality devices like Meta Quest Pro and Apple Vision Pro, and AR glasses.
The American gaming company had announced last year that it will terminate four projects and lay off about eight per cent of its staff. The layoffs are the latest in the round of massive job cuts in tech companies this year, which have also affected computer-based gaming developers. Microsoft's announcement of 10,000 job cuts in January also hit its gaming division and developers of its popular titles like Halo and Starfield.