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In an email sent to Niantic staff and later made public, Niantic CEO John Hanke confirmed that the company has “allowed our expenses to grow faster than revenue,” while recent games have not “delivered revenues” that match their investment.
As a result, Hanke shared that Niantic will be closing its studio in LA, cancelling its upcoming game Marvel World Of Heroes, and shutting down NBA All-World — which only launched in January.
In total, these changes will see “around 230” layoffs for workers. The company will also pivot to releasing fewer games with higher quality, along with a “more direct and results-based culture”.
Explaining the cuts, Hanke pointed to a “tough market environment due to the overall global macroeconomic slowdown, as well as unique challenges in the mobile gaming and AR markets”.
“In the years since Pokémon Go’s launch, the mobile market has become crowded and changes to the app store and the mobile advertising landscape have made it increasingly hard to launch new mobile games at scale,” the CEO said. “We also face an AR market that is developing more slowly than anticipated, because of technology challenges and because larger players are slowing down their investments in light of the macro environment.”
Looking forward, Niantic’s top priority will be to keep Pokémon Go “healthy and growing as a forever game,” while the company will also focus on “making our recently launched games a success
Several weeks ago, Embracer Group warned that its ongoing restructuring will bring layoffs, studio closures, and cancelled games.