Niantic CEO John Hanke has announced major layoffs at the studio, in an all-staff email published online. The email details a range of organisational changes on the way, which includes the shuttering of Niantic’s Los Angeles studio, the loss of 230 jobs, and the closure of NBA All-World and Marvel: World of Heroes.
Notably, Marvel: World of Heroes had only just received a soft-launch in select regions – including Australia – making its departure an oddity. Games like Pokemon Go, Pikmin Bloom, Peridot and Monster Hunter Now will remain in production, as Niantic sees further potential in their success.
As for the reasons why Niantic is making such drastic changes to its lineup, Hanke is surprisingly transparent in his email, claiming ownership of the studio’s troubles and making clear that Niantic was far too ambitious in its scaling plans between 2020 and 2023.
‘Why are we making this change? The answer is straightforward – we have allowed our expenses to grow faster than revenue,’ Hanke said. ‘In the wake of the revenue surge we saw during Covid, we grew our headcount and related expenses in order to pursue growth more aggressively, expanding existing game teams, our AR platform work, new game projects and roles that support our products and our employees.’
‘Post Covid, our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments. This change will bring expenses and revenue back into line while preserving our core assets and long term upside.’
To further outline the major changes impacting the studio, Hanke explained that a ‘tough market environment’ and ‘global macroeconomic slowdown’ impacted Niantic’s plans, forcing a major rethink of its overall goals and sustainability.
‘We also bear responsibility for our own performance,’ Hanke said. ‘Today’s highly competitive mobile gaming market requires dazzling quality and innovation. It also requires strong monetisation and a social core which can drive viral growth and long term engagement.’
According to Hanke, the Niantic team has simply not met these goals.
Going forward, the studio will continue to push forward with augmented reality gaming, by focussing on a smaller contingent of games like Pokemon GO, Pikmin Bloom, Peridot, and Monster Hunter Now.
While firm closure dates have not been announced for NBA All-World and Marvel: World of Heroes, it’s likely we’ll learn more about these shut downs in the coming weeks.
Our thoughts are with those 230 staff currently facing job losses as Niantic restructures.