Niantic, the manufacturer of the game mobile Pokémon Go, was forced to cut a quarter of its workforce, close its studio in Los Angeles (USA) and cancel two games, thanks to a slowdown in demand. The situation is perceived in the games industry in general, which experienced an exorbitant increase in downloads during the Covid-19 pandemic.
“We allowed our expenses to grow faster than our income,” says John Hanke, chief executive of Niantic.
Launched in 2016, the game Pokémon Go quickly became a global phenomenon, fulfilling the wish of anyone who was a child or teenager in the second half of the 90s and dreamed of being able to capture and train the famous “pocket monsters”.
At the time, Apple said the augmented reality game broke the app store’s record for ‘most downloads in a week’. There is no doubt that the game became the developer’s flagship.
“Our priority is to keep Pokémon Go healthy and growing as a game forever,” says Hanke.
However, the chief executive of Niantic also says that, since the launch of Pokémon Go, the market mobile it got crowded and changes to the app store and advertising landscape made it increasingly difficult to launch new games on a large scale.
In total, 230 company workers, including those on the gaming platform team, were affected by the job cuts. Niantic also decided to retire the NBA All-World game, which was released in January of this year, and stop production on Marvel World of Heroes.
In June last year, the company had already said it would cancel four projects and reduce its workforce by about 8%. The latest cuts follow reports from May this year, which claim that the company’s revenue from Pokémon Go has been falling, but the BBC, Niantic denied the information.
“We generally do not comment on third-party estimates of our revenue as they are often incorrect, which is the case here. Our revenue so far in 2023 is up from last year,” a company spokesperson said at the time.
As a private company, the developer is not required to release its earnings reports.
* With information from BBC News
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