Is the developer of the biggest mobile game in 2016, “Pokémon GO,” losing its momentum?
Niantic Inc. CEO John Hanke announced that the company will be laying off hundreds of employees due to revenue decline, as shared in a company email that was posted on the Niantic official website last June 29.
“I have made the decision to narrow our focus for mobile game investments, concentrating on first-party games that most strongly embody our core values of location and local social communities,” Hanke wrote.
He also shared that they’ll be closing down their studio in Los Angeles, California, and will reduce their game platform team and will be making reductions across the company, putting an end to the upcoming project “NBA All-World” and stopping the production of “Marvel: World of Heroes” – resulting to the laying off of around 230 employees.
Similarly in 2022, 8% of its workforce, or about 85-95 employees, have also been laid off as they scrapped 4 different projects at the time.
According to him, the reason for making this change is “straightforward,” he wrote, “we have allowed our expenses to grow faster than revenue.”
Niantic Inc. developed the augmented reality mobile game Pokémon GO in 2o16, which became an instant success, reaching an accumulated download of more than 500 million by the end of the year, with more than 100 million monthly active users by 2018.
The game continued its momentum of success in 2019 reaching over a billion downloads and has grossed more than $6 billion in revenue by 2020 but has failed to follow pursuit since.
Hanke shared that as they saw their revenue surge during the COVID-19 pandemic, they decided to “pursue growth more aggressively,” however, the investments that they made didn’t deliver the same revenue.
However, if you’re thinking if this is the end for the company, well, the answer is probably… not.
According to Hanke, instead of expecting revenue from producing a number of games, they’ll be shifting their focus to improving the state of their current games including Pokémon GO, which is their biggest source of revenue and will hold onto the progression of augmented reality.
“In terms of how the company is run, expect a more direct and results-based culture. The leadership team and I are committed to cutting out unnecessary processes, duplicate lines of authority, and unclear decision-making,” he wrote.
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