Niantic Announces Workforce Reduction and Studio Closure
Niantic, the creator of the popular Pokemon Go game, has revealed plans to reduce its workforce by 25% and shut down its Los Angeles studio. These measures come as the gaming industry faces a decline in demand following a surge in downloads during the pandemic.
Financial Struggles and Company Statement
Niantic’s CEO, John Hanke, acknowledged that the company’s expenses had outpaced its revenue, leading to the need for cost-cutting measures. He emphasized the priority of ensuring the long-term health and growth of Pokemon Go, which achieved global success upon its release in 2016.
Challenges in the Mobile Gaming Market
Hanke also highlighted the challenges Niantic has faced since the game’s launch, citing increased competition in the mobile market and difficulties in launching new games at scale due to changes in app stores and mobile advertising landscapes.
Impact on Workforce and Game Lineup
The job cuts will affect approximately 230 employees, including those in Niantic’s game platform team. In addition to the workforce reduction, Niantic will retire its NBA All-World game and cease production of its Marvel World of Heroes title.
Reflection on Pokemon Go Phenomenon and Financial Performance
The massive popularity of Pokemon Go led to real-world incidents, with some players disregarding safety warnings and encountering accidents. In June 2022, Niantic previously announced project cancellations and an 8% reduction in its workforce. Recent reports indicated a decline in revenue from Pokemon Go, but a Niantic spokesperson dismissed these estimates, stating that their revenue in 2023 has increased compared to the previous year.
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