Niantic, the Pokemon Go developer, downsizes its staff by 25%.

Niantic, the creator of Pokemon Go, has announced plans to reduce its workforce by 25% and shut down its Los Angeles studio due to a slowdown in demand within the gaming industry following a surge in downloads during the pandemic. Additionally, the company will be cancelling the development of two games.

In a statement, Niantic’s CEO, John Hanke, admitted that the company’s expenses have grown faster than its revenue. Pokemon Go gained worldwide popularity upon its release in 2016, breaking app store records for the highest number of downloads in a week, as acknowledged by Apple.

Hanke emphasised the importance of maintaining the long-term success and growth of Pokemon Go as a “forever game.” However, he also noted that since the game’s launch, the mobile market has become crowded, making it increasingly challenging to launch new mobile games at scale due to changes in the app store and mobile advertising landscape.

The job cuts will affect a total of 230 employees across various departments, including the game platform team. Niantic will also retire its NBA All-World game, released in January, and cease production of its Marvel World of Heroes title.

During the peak of the Pokemon Go phenomenon, players filled public spaces in search of virtual creatures like Pikachu and Snorlax. However, some users disregarded safety warnings, leading to accidents, robberies, injuries, and even fatalities.

Last year, Niantic had already announced the cancellation of four projects and an 8% reduction in its workforce. The recent workforce reductions come in response to reports in May suggesting a decline in revenue from Pokemon Go. However, a Niantic spokesperson disputed these claims, stating that the company’s revenue in 2023 has actually increased compared to the previous year. As a private company, Niantic is not obligated to disclose its earnings publicly.