As the world emerges from the throes of the pandemic and life begins to normalize, companies are grappling with the fallout. Niantic, the creator of the globally acclaimed game Pokemon Go, recently announced it would be laying off a quarter of its workforce. The job cuts come in response to the slowdown in the gaming industry, following a surge in downloads during the lockdown periods.
The US-based company also announced the closure of its Los Angeles studio and the cancellation of two games in the pipeline. These decisive actions speak to the financial difficulties Niantic has been facing, as their expenses have grown faster than revenue, as Niantic’s Chief Executive, John Hanke, stated.
Pokemon Go, which became a cultural phenomenon following its 2016 launch, was instrumental in popularizing augmented reality gaming. The game broke Apple’s App Store record for the most downloads in a single week. However, despite its early success, the company is now prioritizing the game’s health and longevity above all else, with Hanke labeling Pokemon Go as a “forever game.”
The company’s predicament is not a solitary incident but mirrors wider industry trends. Hanke highlighted how the increasingly crowded mobile market and changing landscapes of app stores and mobile advertising have compounded the difficulty of launching new mobile games at scale.
A total of 230 employees from various Niantic divisions, including its game platform team, will bear the brunt of these job cuts. Additionally, Niantic plans to retire the NBA All-World game released earlier this year and halt the production of Marvel World of Heroes.
The gaming industry experienced an unprecedented surge in demand during the pandemic as people sought entertainment during lockdowns. But as restrictions lift and life regains some semblance of pre-pandemic normality, the industry faces a new challenge: maintaining that momentum.
These layoffs follow Niantic’s decision last June to cancel four projects and lay off around 8% of its workforce. Meanwhile, May reports suggested a decrease in the company’s revenue from Pokemon Go, although a Niantic spokesperson countered this by stating their revenue in 2023 had actually increased from the previous year.
As a private entity, Niantic isn’t required to disclose its earnings. However, its recent strategic maneuvers paint a picture of a company striving to adapt to shifting market trends and navigate an uncertain post-pandemic world. While its current focus remains on sustaining the Pokemon Go userbase, the company’s future moves will undoubtedly be watched closely by the industry and gamers alike.