Niantic, the developer behind Pokémon Go, has made the decision to lay off 230 employees and close its Los Angeles studio. This move comes as Niantic shifts away from in-house game development and focuses on other aspects of its business. As a result, the upcoming game Marvel: World of Heroes has been canceled, and the NBA All-World project is being shuttered.
Founder John Hanke explained in an internal email that the decision was driven by the studio’s expenses growing faster than its revenue. While Pokémon Go experienced revenue surges during the COVID-19 pandemic, the subsequent years have seen a decline in revenue. Hanke also noted that the augmented reality (AR) game market has become increasingly competitive since the launch of Pokémon Go in 2016. The lack of long-term engagement for its multiple projects was another factor contributing to the decision, as they failed to meet internal goals.
Hanke acknowledged the need for quality, innovation, strong monetization, and social engagement in the highly competitive mobile gaming market. He stated that Niantic’s AR map and platform must deliver the features developers want in a robust and reliable way, but the company fell short of its goals in these areas.
Despite the changes, Pokémon Go will remain a priority for Niantic, with a focus on keeping it healthy and growing as a long-term game. Other recently-launched games such as Pikmin Bloom, Peridot, and Monster Hunter Now will continue development, but the company recognizes the need to work on retention, revenue, and profitability for these projects. Niantic plans to invest in AR maps and platforms to support external developers in building and monetizing their own AR experiences while reducing its own internal projects.
Kotaku has reached out to Niantic for comment, and further updates may follow regarding this situation.