2022 has not been kind to some of the world’s gaming companies. In fact, Niantic, Unity Technologies, and Guild Esports were all forced to make layoffs and job cuts recently.
According to a report from Bloomberg, Niantic, the augmented reality gaming company behind Pokémon Go, recently had to cancel four projects while laying off 8% of its staff. Based on data uncovered by Bloomberg, this means that between 85 and 90 people will now be out of a job. The canceled titles include Heavy Metal, a Transformers AR game that was announced last year, Hamlet, a game that was originally supposed to be a collaboration between Niantic and the theatrical company Punchdrunk, and two more projects entitled Blue Sky and Snowball.
Niantic CEO John Hanke said that the organization is “facing a time of economic turmoil” and that the business had already been “reducing costs in a variety of areas.”
Unity is seeing some hard times too. As a result, the company had to cut 4% of its workforce. That may not sound like a lot, but that translates to a little over 200 workers losing their jobs.
David Beckham’s Guild Esports has also fallen victim to tough times. The organization announced it lost $5.96 million in the six-month period that ended ending on March 31st, 2022. In turn, the company was forced to lay off 15 people, about a third of its workforce.
“As a result of growing economic uncertainty and challenging market conditions, significant action was taken in the first half to streamline the company’s cost base,” Guild said in a statement. “These measures include a rationalization of suppliers and right-sizing staff numbers.”
The Profit‘s Take:
I need to preface this by saying it is NEVER good when our industry experiences layoffs. We feel for everybody that lost their job. The failure of companies often has more to do with leadership, not the people that were laid off. It’s sad that these people are the victims of bad decision-making at the top. Let’s face it, Niantic has had one hit game. Every game after that has just been a re-skin of Pokémon Go. There’s no innovation there. And, when you don’t innovate, you die. Niantic clearly has to innovate. No amount of cost-cutting will help them if they can’t put out another great game. The Niantic failure doesn’t surprise me at all. Guild was always doomed. That company never made a whole lot of sense to begin with. There’s no silver lining for them. I don’t think Guild Esports can survive long-term. Unity is the most interesting company mentioned here. It’s unacceptable for a CEO to say there will be no layoffs, then turn around and cut 200 jobs. It’s a public company, so it’s easy to cut costs and then blame your struggles on the economy. However, the reality is that Unity is a strong business. It could probably shoulder the cost of those 200 employees. I think there are buyers for Niantic. If we hit a full-blown recession, then I think there will be more consolidation. Nintendo should buy Niantic because they have a great mobile hardware business. You just need to make sure it’s a cultural fit.