Niantic lays off 230 jobs, cancels NBA and Marvel games

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Pokémon GO developer Niantic laid off 230 workers today, just over a year after laying off nearly 90 workers.

During last year’s cancellation, Niantic canceled four projects, including the Transformers game. Another Niantic game has faced the same situation this time. After four months in the App Store, Niantic is closing NBA All-World; The company will also stop production on games based on the Marvel franchise.

“Based on the increased revenue we saw during the Covid period, we increased our volume and other related expenses to continue aggressive growth,” CEO John Hanke wrote in an email to employees, which was posted on the company’s blog.

This has been common among the hundreds of tech companies that have laid off workers in the past year – companies that say they hired during the pandemic and now need to expand their teams. In the case of Niantic, Hanke said that funding has returned to pre-pandemic levels, and new projects have not yielded as much revenue as expected.

One such new project is Peridot, a Tamagotchi-style toy. Niantic’s first attempt at an original IP since Ingress, Peridot launched in May. But according to marketing firm Sensor Tower, Peridot has only raised $1.4 million in in-app purchases so far.

Peridot is a high-tech game, with a robust breeding system that makes each player’s pet unique. But the players were disappointed in the installation, because most of the fun features of the game are paid. The only way to unlock the new Peridot, for example, is to pay $5 for in-game items. And when you pay to breed Peridot, you find out that you have to pay if you want your new pet to have a special fur or style.

Pokémon GO is Niantic’s cash cow, pulling in more than $1 billion in in-app purchases every year as of 2020.

In late March, Niantic nearly doubled the price of long-distance travel, a popular in-app feature. The company’s theory is that remote play options were important during the pandemic lockdown, but it conflicts with Niantic’s vision for the game, which is to get people outside to play together face-to-face. Players don’t feel that way. Some chose to boycott Pokémon GO in protest. While their criticism didn’t catch Niantic’s attention, its in-app purchases probably did.

Between July 2022 and March 2023, Sensor Tower data shows that Niantic generated an average of $70 million in monthly in-app purchases. In the three months since the price increase, Niantic has made about $53 million per month.

“The most important thing is to keep Pokémon GO healthy and growing as an endless game,” Hanke said. Some Pokémon GO employees were affected by these layoffs.

While games like Peridot have yet to prove financially sustainable, Niantic has an entire business separate from its games. Niantic’s Lightship AR tools make it possible for any developer who knows how to use Unity to create AR games. Developers also have access to Niantic’s virtual reality system (VPS), which allows users to interact with local environments in their virtual environments.

Hanke also mentioned in his letter to employees that the company wants to expand its focus on building hybrid devices with AR glasses. So, if Niantic doesn’t seem to be keeping track of Pokémon GO, perhaps its software development tools can put the company on the right track.