Niantic Lays Off 8% of Staff and Cancels Four AR Projects
Pokémon GO developer Niantic lays off around 90 employees and cancels four upcoming projects to brace for potential economic headwinds. The moves highlight the company's struggle to replicate the massive financial success of its flagship game.
Pokémon GO developer Niantic lays off 8% of its workforce, affecting approximately 85 to 90 employees, as the company prepares for potential economic difficulties. CEO John Hanke shares in an internal email that these cost reductions are necessary to weather financial storms ahead. This shift occurs just seven months after the company raises $300 million at a $9 billion valuation to build a real-world metaverse.
As part of this downsizing, Niantic cancels four upcoming projects, including a beta-tested Transformers game called Heavy Metal, a theater collaboration named Hamlet, and two other projects called Blue Sky and Snowball. Recently announced titles like NBA All-World and Peridot remain unaffected. The cancellations reflect a harsh reality for the company, as newer releases like Pikmin Bloom generate only $6.8 million, a mere fraction of the $1 billion annual revenue brought in by Pokémon GO.
To diversify its income, Niantic plans to monetize its Lightship AR Developer Kit starting in early 2023. Previously offered for free to developers using the Unity game engine, these augmented reality tools will soon require payment for access. This new revenue strategy accompanies the recent staff reductions as Niantic attempts to stabilize its finances amid a challenging economic climate.