As the gaming industry experiences a slowdown in demand following a spike in downloads during the pandemic, the company that created the video game Pokemon Go, Niantic, has announced that it will lay off a quarter of its workforce.
The company will also cancel two games and close its Los Angeles studio.
Niantic's CEO John Hanke admitted in a statement that "we have permitted our expenses to grow faster than revenue.".
When it was released in 2016, Pokemon Go quickly became a worldwide phenomenon.
When the augmented reality game broke its app store record for most downloads in a week, tech giant Apple claimed it was at the time.
The main objective, according to Mr. Hanke, is to keep Pokemon Go alive and expanding as an ongoing game.
In addition, he noted that since the game's release, "the mobile market has become crowded, and changes to the app store and the mobile advertising landscape have made it increasingly difficult to launch new mobile games at scale. ".
The job reductions will affect 230 employees overall, including those on Niantic's game platform team.
Additionally, the company will put an end to production on its Marvel World of Heroes game and retire its January-released NBA All-World game.
At the height of the Pokemon Go craze, players were scouring public areas to find the virtual creatures, including Pikachu and Snorlax.
Users who disregarded safety instructions caused car accidents, robberies, injuries, and even fatalities.
Niantic announced in June of last year that it would halt four projects and cut its workforce by about 8%.
The most recent budget cuts come after news broke in May that the company's Pokemon Go sales were declining.
A Niantic representative at the time stated, "We typically don't comment on third-party estimates of our revenue as they are frequently wrong, which is the case here.".
The spokesperson added, "Our revenue thus far in 2023 is higher than last year.".
Niantic is not required to make its earnings reports public because it is a private company.
