Niantic, the company behind the popular mobile game Pokemon Go, has revealed plans to lay off a quarter of its employees as the gaming industry experiences a decline in demand following a surge in downloads during the pandemic. 

Niantic will be shutting down its Los Angeles studio and abandoning the development of two games.

According to Niantic’s CEO, John Hanke, the decision to downsize comes from the firm’s expenses outpacing its revenue growth. 

Pokemon Go gained worldwide acclaim upon its release in 2016, even breaking Apple’s app store record for the highest number of weekly downloads. 

Mr. Hanke expressed the company’s commitment to maintaining the game’s longevity. Still, he acknowledged the challenges presented by the increasingly competitive mobile market and the evolving app store and mobile advertising landscape.

The layoffs will affect approximately 230 employees, including those in the game platform team. Niantic will also retire NBA All-World, a game launched in January, and halt the production of Marvel World of Heroes.

The frenzy surrounding Pokemon Go drew players into public spaces as they eagerly pursued virtual creatures such as Pikachu and Snorlax. 

However, some individuals disregarded safety precautions, resulting in car accidents, robberies, injuries, and even fatalities.

Last year, Niantic canceled four projects and reduced its workforce by around 8%. 

The recent layoffs are believed to be in response to reports of declining revenue from Pokemon Go. However, a Niantic spokesperson disputed these claims, stating that the company does not typically comment on third-party estimates and that their revenue for 2023 is higher than the previous year.