The Pokémon Go maker, who's been riding high on an AR promise ever since the game’s 2016 release, just had a bad day.
It could be that the bottom just officially fell out of the AR gaming market as Niantic - the company that put AR on the map (literally) - are to divest themselves of 230 employees and cease production on a high-profile AR-based Marvel app.
The news comes in a leaked internal email (via Kotaku) from company founder John Hanke in which he says that “expenses [grew] faster than revenue”, with high-profile real-world games (via large teams in expensive cities) being among the most expensive and troublesome projects to take on.
The fact that the company is walking away from a Marvel licence may, on paper, seem like madness but given the costs and difficulties in producing the AR titles they're famous for, perhaps their upcoming Marvel game was simply proving too much of a battle in the face of AR indifference.
All eyes will now be on Pikmin Bloom, their recently released Peridot and the upcoming Monster Hunter Now to redress the company's problems and turn the AR ship around.
AR apathy
The victim of the situation is Niantic’s Los Angeles studio which shall be closed, meaning the shuttering of their NBA All-World game and all work on the upcoming Marvel: World of Heroes being wound up.
While Pokémon Go defined the genre it’s worth noting that it was the unique location-based gaming that was the real power behind the throne. Many users simply opted to turn off its AR features making the delicate tossing of Pokeballs easier to control. So while the game is an AR pioneer, as to how many people play it in AR remains debatable.
In his email Hanke also observes that following the infamous Covid boom the company is now seeing declining revenue as multiple projects, such as the recently released Peridot are failing to repeat Pokémon Go’s increasingly unique 2016 success.
“We also bear responsibility for our own performance,” he writes. “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. 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.”
Hanke’s only ray of optimism is that Pikmin Bloom, Peridot and Monster Hunter support and development will continue, along with a promise that Pokémon Go - the one global phenomena that they can truly call a success - will remain a prime focus for the company, promising that it will remain “healthy and growing as a forever game.”
We’ll have more updates following an official statement from Niantic shortly.
