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Pokemon Go players are seen searching for Pokemon and other in-game items in the Pasadena Playhouse District.
PG/Power Griffin | JC Pictures | Getty Images
Niantic, a San Francisco-based mobile game developer, announced Thursday that it will lay off 230 employees as part of a reorganization.
It will also cancel the privately owned company NBA all over the world and halting production on a yet-to-be-released Marvel-based title, according to A note from CEO John Haneke. It will also close a studio in Los Angeles, where most of the affected employees are located.
The move highlights how the mobile gaming industry has shifted in the years since Niantic released its first major hit, Pokemon Go, in 2016. Since then, both apple And Google’s app stores have introduced changes that prevent ad tracking between apps, which has made ads to acquire new users more expensive and unpredictable.
Hanke said the reorganization was due to “both internal and external factors,” including an overall global macroeconomic slowdown.
“In the years since the launch of Pokémon GO, the mobile market has become crowded and changes to the App Store and mobile advertising landscape have made it increasingly difficult to launch new mobile games at scale,” Hanke wrote.
Niantic said Thursday that supporting Pokemon Go is a “top priority” for the company.
Overall, App Store spending on games fell 5% in 2020 to $110 billion, according to an estimate by research firm Data.ai.
The move also signals a shift in the landscape for augmented reality applications, which can integrate computer graphics and data into the real world.
Pokemon Go can display a digital monster interacting with the real world through the phone screen. But the technology is beginning to be incorporated into headsets or goggles that use powerful cameras to blend the real and virtual worlds, which many in Silicon Valley see as the next major computing platform. earlier this year, meta It released its Quest Pro headset, and early next year, Apple will release the long-awaited Vision Pro headset.
Hanke’s letter says that these new hardware products validate Niantic’s strategy, but are only an “intermediate stepping stone” for real, outdoor AR hardware, which likely looks like a lightweight pair of glasses with transparent screens.
“We believe we can build mainstream content and platform services that help fulfill the promise of this technology transformation,” Hanke wrote.
However, Hanke writes that the augmented reality market is “developing more slowly than expected, due to technology challenges and because larger players are slowing their investments in light of the overall environment.”
Niantic had 1,050 employees as of 2022 and last raised $300 million at a post-money valuation of $9 billion in November 2021, when tech valuations were at their peak, according to Pitch book.
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