John Hanke, the studio’s CEO, shared the email that all Niantic employees were happy to receive. The press release does not cut corners: released recently, NBA All-World will close its doors while Marvel: World of Heroes is simply canceled before its launch. These closures will result in a massive wave of layoffs, no less than 230 employees being affected, which includes all the residents of the Los Angeles studio whose doors will soon be closed for good.
The great illusion of the pandemic
John Hanke makes no secret of it, his company made too many recruitments and investments during the Covid years, a period of high domestic consumption for video games, even on mobile phones. Yet the current reality of the mobile market is one of a cluttered industry where only the most popular titles manage to stand out and deliver satisfaction. ” The answer is simple: we let our expenses grow faster than our income. In the wake of the revenue explosion during Covid, we have increased our headcount and spending to more aggressively prolong growth, expanding current games teams, our AR platform work, new games and posts that support our products and our people. After Covid, our revenues returned to pre-pandemic levels and new projects did not generate revenues to match these investments. »
John Hanke also blames an environment made difficult by a “ global macroeconomic slowdown and further acknowledges that the augmented reality market is growing slower than expected, in addition to being let go by a number of investors. ” We are also responsible for our own performance. Today’s highly competitive mobile gaming market demands dazzling quality and innovation. It also requires strong monetization and a social core that can drive viral growth and long-term engagement. »
Niantic’s priority is obviously to maintain Pokémon GO as an endless financial resource, with the statement literally speaking of turning into ” forever game one that has reportedly generated an average of $1 billion every year since its debut in 2016. Among recently released games, Pikmin Bloom and Peridot retain the studio’s confidence for now, as does the upcoming Monster Hunter Now. Beyond games, Niantic remains committed to augmented reality and will continue to invest in a platform that allows other studios to manage and monetize their own AR experiences.