It appears that Niantic is materially reckoning with the fact that nothing will ever be quite as big Pokémon Go once was. Unfortunately, that means a number of canceled projects and, much worse, layoffs.
According to a new Bloomberg report, Niantic CEO John Hanke informed the company that 8% of the staff was being laid off — so around 85-90 people — as the company faces “a time of economic turmoil” during which it has been “reducing costs in a variety of areas.”
In addition, four projects have been canceled. One is the mobile AR partnership with Hasbro and TOMY it announced last year, called Transformers: Heavy Metal. Another was announced a year prior, as a collaboration between Niantic and the New York-based immersive theatre company behind promenade theatre production Sleep No More, Punchdrunk. Two additional projects canceled were reportedly codenamed Blue Sky and Snowball.
Niantic has existed since 2010, and was initially known for its location-based community game Ingress. But it gained fame when it took the same location-based mechanics it had developed for Ingress and partnered with The Pokémon Company for Pokémon Go, which has proven a consistent revenue driver for the company since its 2016 launch. At last estimate from mobile analytics group Sensor Tower, it has brought in $6 billion in lifetime revenue, averaging $1 billion in revenue per year and maintaining consistent popularity over that time.
But its other games haven’t managed the same level of success. Despite a solid enough launch month with over $12 million in global player spending, Harry Potter: Wizards Unite lagged far behind Pokémon Go’s $300 million launch and never came close to catching up, shutting down earlier this year. Pikmin Bloom has done even worse, only reaching over $5 million in global revenue since its launch last year, though it remains live.
The lack of traction for either game might sound shocking given the IP involved and Pokémon Go’s own success, but the truth is that no other location-based game has managed to capture the same level of attention, Niantic or no. Minecraft Earth, for instance, shut down last year following struggles with maintaining a location-based game amid COVID-19. And Pokémon Go’s closest recent competitors, Dragon Quest Walk and Jurassic World Alive, combined couldn’t even bring in half of what Pokemon Go did in the first quarter of this year.
With all these struggles, it’s easy enough to see the trajectory of Niantic’s significant scaling up following Pokémon Go’s unexpected explosive success, and the subsequent decision to scale down when no other licensed game could touch that level of popularity. Unfortunately, it’s a decision that impacted human beings.
“We recently decided to stop production on some projects and reduce our workforce by about 8% to focus on our key priorities,” said a Niantic spokesperson to Bloomberg. “We are grateful for the contributions of those leaving Niantic and we are supporting them through this difficult transition.”
With Pokémon Go remaining steady, it seems unlikely Niantic as a whole is in danger. And it still has multiple new projects in the works, including Tamagotchi-like game Peridot announced in April and NBA All-World, an NBA licensed game published by Niantic and developed by HypGames, announced yesterday.
Rebekah Valentine is a news reporter for IGN. You can find her on Twitter @duckvalentine.
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Author: Rebekah Valentine