John Hanke, CEO of Niantic, recently announced a major restructuring within the company, including laying off approximately 230 employees and discontinuing two games – NBA All-World and Marvel: World of Heroes.
In an email addressed to all Niantic employees, Hanke stated: “I have some news to share with you about steps we’re taking to set Niantic up for the future. They mean some difficult changes for our organization, but I believe they are important if we are to weather the current challenges in the market and take advantage of the long-term opportunity in front of us.”
The decision comes as part of Niantic’s revised strategy to concentrate on first-party games that emphasize the company’s core values of location and local social communities. Hanke attributed the need for change to the company’s expenses growing at a faster rate than its revenue, particularly following the surge in revenue experienced during the Covid pandemic.
Hanke said: “Post Covid, our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments. This change will bring expenses and revenue back into line while preserving our core assets and long-term upside.”
Under these new measures, Niantic’s LA studio will be closed, and there will be a reduction in the game platform team along with additional cutbacks throughout the company.
This realignment is also driven by the challenging market environment Niantic operates within. Hanke commented: “We are operating in a tough market environment due to the overall global macroeconomic slowdown, as well as unique challenges in the mobile gaming and AR markets. 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.”
Niantic remains committed to AR (Augmented Reality) technology, with Hanke stating: “We remain long-term believers in augmented reality as the future form factor for computing. We believe that we can build key content and platform services that will help realize the promise of this technological shift.”
The company’s future strategy involves focusing on the success of Pokémon GO, as well as recently launched games Pikmin Bloom, Peridot, and Monster Hunter Now. Niantic will also continue to invest in its AR map and AR platform to enable developers to build and monetize their own AR experiences.
In terms of its internal culture, Niantic is set to adopt a more direct, results-oriented approach, cutting out unnecessary processes and clarifying decision-making structures. Hanke affirmed: “The leadership team and I are committed to supporting and rewarding high performing Niantics who are committed to the company and its mission and are working tirelessly to succeed.”
In concluding his message to the team, Hanke expressed his gratitude towards those leaving the company: “I am sure that the Niantics who are leaving will go on to make their own mark in the world in different places. I am proud to have worked with them, grateful for everything they have done, and sad to say goodbye. That painful step is in the interest of adjusting to new conditions and evolving the company so it can succeed.”
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