What happened: Niantic, the creator of "Pokémon Go," is undergoing a restructuring to improve its finances. The company said it will lay off 230 employees or 25% of its staff, close its Los Angeles studio, and cancel the games "NBA All-World" and "Marvel: World of Heroes." The big picture: After a surge in sales during the pandemic, Niantic's expenses have outpaced revenue growth, CEO John Hanke said. The company attributes this to a slowdown in the global macroeconomic environment and slower-than-expected progress in the development of the augmented reality (AR) market. Quotable: Niantic's flagship game, "Pokémon Go," has been a significant source of revenue for the company, outshining its other games and projects. In a memo to employees, Hanke said its "top priority is to keep 'Pokémon Go' healthy and growing as a forever game." By the numbers: "Pokémon Go" has seen an average annual revenue of $1B since its launch in July 2016, as per Sensor Tower data. However, the game's in-app purchase revenue has been declining since the price increase of Remote Raid Passes in March. From July 2022 to March 2023, Niantic earned an average of $70M per month in gross in-app purchase revenue. However, in the three months following the price increase, the average monthly revenue dropped to $53M. Niantic's annual mobile revenue has also decreased from its peak of $918.8M in 2020 to $713.5M in 2022.
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