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Niantic is closing its LA studio and laying off 230 employees, the company announced. Collateral damage from this move includes the shuttering of “NBA All-World” and “Marvel: World of Heroes.” Despite the layoffs and project cancellations, “Pokémon Go” remains safe.

Company CEO John Hanke explained the situation in an email to employees, citing tough finances in the timespan between the pandemic and now. He also stated that expenses were outpacing revenue. Niantic publicly posted the email.

“Post-Covid, our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments,” Hanke’s email reads. “This change will bring expenses and revenue back into line while preserving our core assets and long-term upside.”

Hanke cited difficulties with launching mobile games at scale as a contributing factor to the current situation, in addition to an AR market that hasn’t been developing as quickly as Niantic had expected.

“We also bear responsibility for our own performance. Today’s highly competitive mobile gaming market requires dazzling quality and innovation. It also requires strong monetization and a social core which can drive viral growth and long-term engagement,” Hanke wrote.

“Teams need platform tools that are force multipliers, enabling them to build at the highest quality with powerful engagement features quickly and efficiently. Our AR map and platform must deliver the features that developers want in a robust and reliable way. We have not met our goals in all of these areas.”

The company’s revised focus is to spread its team less thin and focus on quality over quantity. Hanke said employees should expect Niantic to adopt a more “results-based culture,” where in redundancies and unnecessary elements will be excised. It’s a sentiment that sounds like it was ripped right out of the playbook Elon Musk recently pioneered for Twitter (a playbook Meta’s Mark Zuckerberg has also adopted).

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Niantic is one of many tech-sector companies to experience big playoffs in 2023. Whether it be Reddit, Amazon, Microsoft, or even Apple, big names across a variety of tech spaces have either culled or trimmed their headcount in recent months.

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