Kotaku has recently released an article detailing troubling information about the company Niantic. In an internal email sent to employees that was acquired by Kotaku, the studio claims that their “expenses [grew] faster than revenue,” as stated by Niantic founder, John Hanke in the email. As a result of these larger expenses they have announced that they are letting go 230 staff as well as discontinuing two games that they were tasked with making.
Among the two games that were planned to be released under the company were NBA All-World and Marvel: World of Heroes. As far as what will happen to their most popular game, Pokemon Go, it is still the highest priority for the company, which means that as far as we know, the game isn’t going anywhere anytime soon.
Going more in depth about Niantic’s fluctuating revenue, it seems as though there are multiple factors. Their revenue surged during the COVID-19 pandemic, however since then, their revenue has begun to decline. This is in combination with an increasingly competitive market for AR video games, which are no longer as rare as when Pokemon Go was originally released back in 2016.
All of these factors combined have put a lot of pressure on the company, with Hanke responding to this in the email saying:
“We also bear responsibility for our own performance. Today’s highly competitive mobile gaming market requires dazzling quality and innovation. It also requires strong monetization and a social core which can drive viral growth and long term engagement. Teams need platform tools that are force multipliers, enabling them to build at the highest quality with powerful engagement features quickly and efficiently. Our AR map and platform must deliver the features that developers want in a robust and reliable way. We have not met our goals in all of these areas.”
It is unclear if this will be a path that might affect other Niantic projects down the line, but only time will tell if the impact will increase, or if the company will be able to get back on track.