Niantic, the game developer best known for the huge AR hit known as Pokemon GO, is restructuring as it seeks to stabilize the company’s financial position. According to Bloomberg, the developer is closing its Los Angeles studio and will halt work on its Marvel: World of Heroes game and eventually shut down its NBA All-World game. The latter title was released in January and generated only 354,000 downloads during its first-week based on data from Data.ai. That compares with the over 1 million in first week downloads garnered by Pikmin Bloom, a game created by Niantic and Nintendo.
In a lengthy letter e-mailed to employees, Niantic CEO John Hanke said that the company is narrowing its focus in the mobile game sector to first-party games. Hanke writes, “The mobile gaming market is very mature and only the best and most differentiated titles have a chance to succeed. We also want to increase our focus on building for the emerging class of MR devices and future AR glasses.”
Niantic will be sunsetting the recently released NBA All-World mobile game
The executive goes on to say that the LA studio is being shuttered leading to the “sunsetting” of NBA All-World and ending production of Marvel: World of Heroes. He adds that 230 Niantic employees will be laid off. Hanke says that the company is making these changes because its expenses are growing faster than revenue. He notes that Post-COVID, revenue returned to pre-COVID levels. The problem is that during the pandemic, Niantic grew its headcount “in order to pursue growth more aggressively.”
The changes that the company is making, he says, “will bring expenses and revenue back into line while preserving our core assets and long-term upside.” With that in mind, “The top priority is to keep Pokemon GO healthy and growing as a forever game,” wrote Hanke. “While we made some adjustments to the Pokemon GO team, our investment in the product and team continues to grow.”
The CEO said that besides Pokemon GO, Niantic will continue to support Pikmin Bloom, Peridot, Ingress, and the upcoming Monster Hunter Now games. According to ActivePlayer, as of this month, Pokemon GO has 79 million monthly players. One report says that the game created $703 million in revenue for Niantic last year, down nearly 20% from the $877 million in 2021 revenue generated by Pokemon GO.
