Niantic Labs Slashes 25% of Workforce, Scraps NBA and Marvel Games as It Makes Pokémon Go ‘Top Priority’

variety.com:

Todd Spangler NY Digital Editor Augmented-reality games pioneer Niantic Labs is laying off 230 employees, about 25% of its workforce, and shutting down its Los Angeles studio as it refocuses on flagship title Pokémon Go.

CEO John Hanke announced the cuts in a memo to staff Thursday, saying “we have allowed our expenses to grow faster than revenue” after the sales boom it saw during the COVID pandemic subsequently evaporated.

As part of the reorg, Ninatic is “sunsetting” NBA All-World and stopping production on Marvel: World of Heroes games. “Post Covid, our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments,” Hanke said in the memo, which Niantic released publicly. “The top priority is to keep Pokémon Go healthy and growing as a forever game,” the CEO told staff. “While we made some adjustments to the Pokémon Go team, our investment in the product and team continues to grow.” Hanke cited a number of factors for Niantic’s financial straits, including the overall global macroeconomic slowdown and “unique challenges in the mobile gaming and AR markets.” The mobile gaming sector has grown more competitive while “changes to the app store and the mobile advertising landscape have made it increasingly hard to launch new mobile games at scale.” In addition, the CEO conceded, the AR market is “developing more slowly than anticipated.” “In terms of how the company is run, expect a more direct and results-based culture,” Hanke wrote.

Niantic’s latest cuts came a year to the day after the San Francisco-based company cut 8% of its workforce and terminated development of “Transformers: Heavy Metal” and three other games.