Niantic, the company that created the video game Pokemon Go, has said that it will lay off a quarter of its staff since demand for video games has slowed after the pandemic’s spike in downloads. In addition, the company will cancel two titles and shut down its Los Angeles studio.
John Hanke, the chief executive of US-based Niantic, stated in a statement, “We have allowed our expenses to grow faster than revenue.”
When Niantic released Pokemon Go in 2016, it quickly became a global phenomenon.
At the time, technology giant Apple said the augmented-reality game broke its app store record for the most downloads in a week. “The top priority is to keep Pokemon Go healthy and growing as a forever game,” Mr Hanke said.
However, he also said that since the game’s launch, “the mobile market has become crowded and changes to the app store and the mobile advertising landscape have made it increasingly hard to launch new mobile games at scale.”
The job cuts will impact a total of 230 workers from various departments within Niantic, including the game platform team. Additionally, Niantic plans to retire its NBA All-World game, which was launched in January, and halt production of its Marvel World of Heroes title.
During the height of the Pokemon Go phenomenon gamers chasing down characters including Pikachu and Snorlax filled public spaces to hunt down the virtual creatures. Some users disregarded safety warnings, leading to car crashes, muggings, injury and even death.
In June last year, Niantic said it would cancel four projects and reduce its workforce by around 8%. The latest cuts follow reports in May that the company’s revenue from Pokemon Go had fallen.