In a bold strategic shift, Niantic, the renowned developer behind the globally popular game Pokémon Go, has decided to focus more intently on its flagship offering. This decision comes after an extensive period of growth and diversification that saw the company spread its resources thin across multiple projects. The company now embarks on a path of doing less, but better, with an emphasis on strengthening and growing Pokémon Go.
Job cuts of 230 represent a fourth of the company’s staff
In an official announcement, Niantic’s CEO, John Hanke, confirmed that 230 employees are being let go as part of the company’s restructuring plan. Moreover, Niantic’s Los Angeles studio is set to close, further symbolizing the company’s new direction. The changes also affect the gaming portfolio, with NBA All-World being discontinued just half a year after its global launch and the anticipated Marvel: World of Heroes project being axed.
The move towards a leaner operation is an acknowledgment by Niantic of the competitive nature of the mobile gaming market. It’s not the first time the company has withdrawn support from one of its games, but this marks a significant change, driven by the need to narrow its focus following an aggressive expansion phase in 2020.
John Hanke explained the rationale behind the restructuring, pointing to the company’s aggressive growth strategy during the COVID-19 pandemic. During this time, Niantic expanded its team and incurred increased expenses to support its growth. However, the return to pre-COVID revenue levels and the underperformance of new projects necessitated a change. The aim now is to align expenses with revenue while preserving the company’s core assets and ensuring long-term growth.
Despite leveraging high-profile properties like NBA and Marvel for its augmented reality (AR) games, Niantic experienced setbacks. The company has now refocused its efforts on a smaller number of games, aiming to achieve success based on user retention, revenue, and profitability metrics.
Pokémon Go remains Niantic’s top priority, with the company intent on maintaining its status as a “forever game” that continues to attract and retain players over a long period1. This renewed focus is expected to benefit the upcoming Pokémon Go Fest 2023, although the company acknowledges that it needs to rebuild trust with large segments of the gaming community dissatisfied with recent decisions.
While the restructuring sees a narrowing of focus, Niantic continues to fully support Pikmin Bloom, Peridot, and Monster Hunter Now. However, the company recognises that substantial work is required to ensure the longevity of these titles. It remains to be seen how Niantic’s new “direct and results-based culture” will impact the player experience and the future trajectory of the company.
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