The maker of the Pokemon Go video game, Niantic, says it will cut a quarter of its workforce as the gaming industry faces a slowdown in demand after downloads surged during the pandemic.

The firm will also close its studio in Los Angeles and cancel two games.

"We have allowed our expenses to grow faster than revenue," US-based Niantic's chief executive John Hanke said in a statement.

Pokemon Go became a global phenomenon when it was released in 2016.

At the time, technology giant Apple said the augmented-reality game broke its app store record for the most downloads in a week.

"The top priority is to keep Pokemon Go healthy and growing as a forever game," Mr Hanke said.

However, he also said that since the game's launch, "the mobile market has become crowded and changes to the app store and the mobile advertising landscape have made it increasingly hard to launch new mobile games at scale."

A total of 230 workers from across Niantic, including those in its game platform team, will be affected by the job cuts.

The company will also retire its NBA All-World game, which was released in January, and stop production of its Marvel World of Heroes title.

During the height of the Pokemon Go phenomenon gamers chasing down characters including Pikachu and Snorlax filled public spaces to hunt down the virtual creatures.

Some users disregarded safety warnings, leading to car crashes, muggings, injury and even death.

In June last year, Niantic said it would cancel four projects and reduce its workforce by around 8%.

The latest cuts follow reports in May that the company's revenue from Pokemon Go had fallen.

"We generally don't comment on third-party estimates of our revenue as they are often incorrect, which is the case here," a Niantic spokesperson said at the time.

"Our revenue so far in 2023 is up on last year," the spokesperson added.

As a private company, Niantic is not required to make its earnings reports public.