Niantic CEO John Hanke informed his employe♓es this week that the company is sunsetting one game (NBA All-World), ending development on another (Marvel World of Heroes), and shuttering its LA studio. 230 game developers lost their jobs this week so that Niantic can “🌃bring expenses and revenue back into line.” This, despite in May that its revenue in 2023 was up over the previous year.
I read Hanke’s email, which was posted to Niantic's, and while I’m certainly no business analyst, it’s not hard to read between the lines here. I’ve seen plenty of mass layoffs in the game industry recently - it’s starting to feel like a weekly occurrence - and no matter what the presidents and CEOs of these companies say, I know exactly why this keeps happening. These massive companies simply refuse to engage in sustainable game development, and they have no incentive to operate in the best interest of their employees. 230 people just lost their jobs because of poor, short-sighted decision making, and a company that cares more about aggressively pursuing profits than building a sustainable business that doesn’t treat employees like an expendable resource.
Hanke says there are both internal and external factors that caused this to happen, which is a premise I fundamentally reject. The external factors he cites are “global macroeconomic slowdown” and “unique challenges in the mobile gaming and AR markets”. He elaborates by explaining that the mobile market is crowded and changes in the “mobile advertising landscape” have made it hard to launch new games. He says that the AR market is developing🃏 slower than he thought it would, and fewer investments are being made in the technology, “in light of the macro environment”.
I’m just an idiot who plays video games for a living, but even I can see how thin these excuses are. The economy is bad? When isn’t it? If you employ thousands of people, especially when those people are skilled creatives that your entire business depends on, you🎉r business ought to be built around the reality that the economy is going to constantly fluctuate. If hundreds of jobs are at the whim of something as vague and nebulous as “global macroeconomic slowdown”, you’re running your business irresponsibly. As for the slow development of the AR market, I simply do not believe the CEO of the most forward-thinking AR development company in the world doesn’t have a better sense of where the market is going.
These are not the kind of factors that sneak up on you. We’re not talking about a natural disaster - in fact, Niantic made the most money ever during the pandemic, which was a sudden, unpredictable thing that had a huge impact on a lot of businesses. I don’t believe the decision makers at Niantic were surprised by�🙈� these external factors, at least not the way that 230 people were surprised when they woke up today and found out they no longer have jobs.
Hanke does take responsibility for the company’s poor performance, sort of. I want to you read this part as its written so you don’t think I&rsq🐟uo;m putting words in his mouth:
“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 engag𝕴ement. 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.&rdq🃏uo;
It’s not that Niantic was participating in short-term thinking and unsustainable growth, it’s that the games it published weren’t good enough. They didn't have strong enough monetization, and the AR map doesn’t have the features that developers want. It’s a subtle indictment of all the people that worked on these projects, but it’s also a misdirect away from the real problem. He’s saying they need to focus on building products that are bigger and better, which would not be reassuring to me at all if I was one of his employees.
The frustrating thing is that he explains what went wrong right at the top, only he doesn’t frame it as the problem. Niantic saw a huge revenue surge during the pandemic, which it used to “pursue growth more aggressively, expanding existing game teams, our AR platform work, new game projects and roles that support our products and our employees,” which is a pretty heinous thing to say in the same breath that you’re laying off more than 200 of them, but I digress. Hanke then says that w🙈hen revenue returned to pre-Covid levels later on, those investments hadn’t yet paid off, so here we are.
It is not fair that 230 developers have to bear the consequences of the decision to overspend during a period of unprecedented and unsustainable growth during the pandemic. It is unfa🐭ir that Hanke and other executives that caused this to happen get to punish other people for their mistakes. It is unfair that workers in the game industry have no protections or advocates and that they have to live and work in fear, always waiting for the other shoe to drop, because the triple-A industry is shortsighted, profit-hungry meat grinder that treats human beings like values on a spreadsheet. My heart aches for 230 employees at Niantic, and the 121 employees at Relic, and the 90 employees at Deviation Games, and the 90 emploꦚyees at Kabam, and the 46 employees at Riot Games, and the 20 employees at Brace Yourself, and the 30 employees at CD Projekt Red, and the 800 employees at EA, and the 10,000 employees at Microsoft, which includes at least 60 from 343 Industries, and 10,000 employees from Meta. Niantic isn’t alone in this, but it certainly isn’t the exception either. This is a shameful way to treat people, and it can’t go on like this forever.