Niantic, the developer behind the popular game Pokémon Go, has announced significant changes within the company, including layoffs and studio closures. The decision to lay off 230 employees and shut down the Los Angeles studio was revealed in an “organizational update” following the leakage of an internal memo to Kotaku. As part of these changes, two licensed games, NBA All-World and Marvel: World of Heroes, have also been canceled. However, fans can take solace in the fact that Pokémon Go, the flagship product of Niantic, will continue to thrive.
In a letter from CEO John Hanke, he expressed the need to refocus their efforts on mobile game investments that align closely with their core values of location and local social communities. Hanke acknowledged the maturity of the mobile gaming market and emphasized the importance of developing exceptional and distinctive titles to succeed. Additionally, he highlighted the company’s intention to prioritize the development of games for the emerging class of mixed reality (MR) devices and future augmented reality (AR) glasses.
Hanke openly addressed the challenges faced by the company and took responsibility for the mistakes made by the leadership team. He attributed the need for downsizing to the studio’s expenses outpacing its revenue growth. Niantic had expanded its workforce and invested in various projects during the surge in revenue brought about by the COVID-19 pandemic. However, post-pandemic, the revenue levels returned to normal, and the new projects did not generate sufficient revenue to support the increased expenses.
Despite the adjustments and layoffs, Hanke assured that Pokémon Go remained a top priority. The game has experienced immense success since its launch in 2016 and has gained renewed popularity during pandemic lockdowns. Hanke mentioned the ongoing investment in the game and the team, expressing the commitment to keeping Pokémon Go healthy and ensuring its longevity as a “forever game.” The company recently introduced a social app for players to organize and interact within the game.
The letter also acknowledged that the AR market has been developing slower than anticipated, which has impacted Niantic’s plans. While their games would be ideal for on-the-go AR experiences, the industry is still awaiting the emergence of smart glasses that can seamlessly integrate with everyday life. Current wearable AR devices, such as Apple’s Vision Pro and Meta Quest Pro, are primarily designed for home or office use. Niantic’s unique approach to AR necessitates the availability of consumer-friendly versions that are still several years away. Therefore, the company has undertaken reconfigurations to adapt to this reality and adjust their strategy accordingly.
Frequently Asked Questions (FAQs) about Layoffs
Q: Why is Niantic laying off employees and closing studios?
A: Niantic made the decision to lay off employees and close studios due to their expenses growing faster than their revenue. They needed to align their focus and prioritize investments in mobile games and emerging technologies like MR and AR glasses.
Q: What impact will the layoffs have on Pokémon Go?
A: Despite the layoffs, Pokémon Go remains a top priority for Niantic. The company is committed to its growth and longevity as a “forever game.” They continue to invest in the product and team, ensuring that Pokémon Go stays healthy and continues to thrive.
Q: What led to the cancellation of NBA All-World and Marvel: World of Heroes?
A: As part of the organizational changes, Niantic decided to cancel these licensed games. It was likely a strategic decision to streamline their focus on first-party games that align closely with their core values of location and local social communities.
Q: How does Niantic plan to adapt to the slower-than-anticipated development of the AR market?
A: Niantic acknowledges the slower development of the AR market and the need to adjust their strategy accordingly. They aim to increase their focus on building for the emerging class of MR devices and future AR glasses, while waiting for consumer-friendly versions of augmented reality technology to become available.
Q: What was the reason behind the leaked internal memo and subsequent organizational update?
A: The internal memo was leaked to Kotaku, prompting Niantic to provide an organizational update to address the situation proactively. The leaked information included details about the layoffs, studio closures, and canceled games. The company took the opportunity to communicate openly with their employees and the public about the changes and their reasons behind them.