Niantic is closing down its Los Angeles-based studio and is moving away from in-house game development while laying off 230 employees and canceling Marvel: World of Heroes.
In an internal email sent to employees today and acquired by Kotaku, company founder John Hanke explained that “expenses [grew] faster than revenue,” and even with positive gains during the COVID-19 pandemic, they’ve seen things start to slide since Pokémon GO’s launch in 2016. With competition in the AR market on mobile, Niantic is moving away from in-house game development as it closes its Los Angeles-based studio, which will cause layoffs for 230 employees. The company also plans to shutter NBA All-World and cancel its upcoming Marvel: World of Heroes title.
“We also bear responsibility for our own performance,” Hanke’s emails said. “Today’s highly competitive mobile gaming market requires dazzling quality and innovation. It also requires strong monetization and a social core which can drive viral growth and long term engagement. Teams need platform tools that are force multipliers, enabling them to build at the highest quality with powerful engagement features quickly and efficiently. Our AR map and platform must deliver the features that developers want in a robust and reliable way. We have not met our goals in all of these areas.”
While the company has become well-known for its format of AR titles, based on those originally done in Pokémon GO, we have seen Niantic partner with some huge properties to continue its formula, with intellectual properties like Harry Potter, Pikmin, Monster Hunter, The Witcher, and more have their own games either out, or in the works, and while there hasn’t been word on the future of some of those projects, Niantic says it’s focusing on Pokémon GO from here on out, in order to keep it “healthy and growing as a forever game.”
Pikmin Bloom, Peridot, and Monster Hunter Now will continue development, as of today’s news, but with the need to get profits back where they need to be, and the negative emails from Hanke today about the future of the market, things could get worse in time for the once-revolutionary mobile company. Niantic also plans to continue investing in AR maps and platforms for developers to build and monetize their own AR experiences while minimizing its own internal projects, as it moves away from taking on those projects themselves.
