Niantic Announces Closures and Layoffs
Niantic, the maker of popular AR games Pokémon Go and Harry Potter, is taking steps to reduce costs and align expenses and revenue. The company is closing its LA studio and laying off over 200 employees, representing approximately 20% of its workforce. This move comes as Niantic faces challenging external factors, including a global macroeconomic slowdown.
CEO John Hanke explained the decision in a blog post, stating that the downsizing is necessary to prioritize strategic goals. These goals include developing high-quality games with robust monetization and desired features, such as Niantic Real World, which utilizes their existing Niantic Reality platform.
Niantic will discontinue development on Marvel World of Heroes and sunset NBA All-World. Some employees will be transferred to work on the company's remaining titles, while others will be let go at the end of their notice periods.
The Broader Context
While Niantic's layoffs are unfortunate, they reflect a larger trend in the game industry. Many companies prioritize aggressive profit goals over sustainable game development, resulting in layoffs. Niantic acknowledges external factors, such as the global macroeconomic slowdown and challenges in the mobile gaming and AR markets, as contributing to its underperformance. However, it is important to note that poor management is often responsible for such outcomes.
CEO Hanke acknowledges the impact of external factors but also takes responsibility for the company's mistakes. He emphasizes the need to learn from these errors and emphasizes the importance of developing higher-quality games with stronger monetization and desired features like Niantic Real World.
A Shift in Strategy
In addition to layoffs and closures, Niantic plans to reduce spending on non-essential services and streamline its executive team. The company will adopt a more centralized corporate structure and create three new business units:
- Niantic Reality: Focuses on developing the platform - Niantic Studios: Works on core games - Niantic Labs: Develops and publishes games with new technologies and features
This restructuring aims to ensure that Niantic remains focused on its key priorities moving forward. However, it may also lead to potential layoffs in the future.
