Niantic to Shut Down LA Studio Amid Restructuring Efforts

Niantic, the developer of Pokémon Go, has announced the closure of its Los Angeles office, resulting in the layoff of 230 staff members. According to an email from founder John Hanke, the company's expenses grew at a faster rate than its revenue. Following the COVID-19 pandemic, Niantic expanded its workforce and investments in new game projects and augmented reality (AR) platform development. However, the revenue generated by these new projects did not meet expectations. The AR gaming market has become increasingly competitive since the release of Pokémon Go in 2016, with Hanke stating that the current market requires high-quality games with strong monetization and social features to drive engagement. Niantic has not met its goals in these areas and is therefore restructuring. As a result, the company is ending support for NBA All-World and canceling the development of Marvel: World of Heroes. Work on Pikmin Bloom, Peridot, and Monster Hunter Now will continue, but Hanke acknowledged that significant improvements are needed. Even Pokémon Go has shown signs of decline, with estimated revenue for April being the lowest in five years, although Niantic disputes the accuracy of this figure.