In just one month since it debuted in Australia and New Zealand on July 6 – and propelled by its famous brand name and a massive word-of-mouth marketing campaign – Pokémon GO has become the world´s most successful mobile game ever. And with millions of people playing in many countries every day (including myself and my two daughters... my wife still resisting...), the viral spread of Pokémania as a multi-cultural sensation seems far from being over.
So far having launched only in about half of the regions where the App Store and Google Play are available, Pokémon GO has been been installed over 100 million times and already generated more than $160 million in net revenue across both platforms. Pokémon GO is raking $10 million every day. In the U.S. the average Pokémon GO user is still spending more time in it (26 minutes) than an average Facebook user (23 minutes) is in that app each day.
Per minute there are almost 5,000 global downloads of the game (both iOS and Android) which generate roughly $ 25,000 in the same 60 seconds. Two other super popular apps – Clash of Clans and Candy Crash Saga – realize "only“ about 1,250 downloads per minute (source: appinstitute).
TTHE REASONS OF SUCCESS
Important to re-call here that the app was created by Niantic and not Nintendo. Niantic is an augmented reality game maker spun off from Google in late 2015. Nintendo is an investor in both Niantic and the Pokémon Company. Nintendo generates revenue with Pokémon GO via in-game micro-transactions. What has made the game so successful?
Pokémon GO is simple, free, has almost no stumbling blocks to get started, and plays on a smartphone, i.e. on a device which is already in everyone´s pocket. Combining the Pokémons with the real world by applying a rather basic augmented reality (AR) technology was definitely a stroke of genius by Niantic (versus opting for a cooler technology like virtual reality which would have required a new device). Pokémon GO is barely AR, since only applying simple uses of the camera to position a Pokémon character in the environment. In fact, many players even disable the camera.
Still, it nicely blends all the colorful creatures which players are supposed to catch with many familiar elements of their real world. Based on that people are even willing to make the commitment to physically leave their home and to catch Pokémons in the outside world. Movement is a key success factor of the game as it makes people meet face to face in shared spaces (e.g. at PokéStops or Pokémon Gyms). It´s based on a Global Positioning System (GPS) which again every smartphone user knows and which really turns Pokémon GO into such a big success. Both the innovative and yet straightforward AR technology and the GPS-enabled moving application have significantly reduced adoption barriers. The game makes the walk to the supermarket or to work just more fun and even magical.
Whether people are playing out of curiosity or nostalgia (greetings from Nintendo Gameboy!), many Pokémon fans have been waiting for a good Pokémon game to appear on a smartphone. By word-of-mouth it succeeded in attracting many players (e.g. my mother-in-law) who do not fall into Pokémon´s traditional target demographic. Still, like many millions of unlikely players, she has become addicted to the game.
And as players learn and share new tricks they become better and more immersed into the Pokémon community and develop a joint spirit of companionship. Also for hardcore players there exist countless communities and forum on Reddit, Google+, Facebook, etc. where they can team up and exchange latest strategies and tricks.
No doubt, the game taps smartly into the human reward systems, since you can move up levels whilst not losing which makes you feel good, and you can fully live out your very original instincts of being a hunter and collector. How satisfying!
KEY IMPACT AND MAIN LEARNINGS
According to a very recent App Annie analysis, Pokémon GO is still going strong and it even appears that it has a very positive overall effect on the app economy. It seems that engagement rates of other popular apps like Facebook, Snapchat, and Instragram have not dropped. So most likely, although it´s early days for a more thorough assessment, Pokémon GO might have successfully enlarged the size of time spent mobile. In addition, it has provided significant insights for developers in order to increase user engagement and creating new revenue opportunities.
What Pokémon, and similar or related companies, could/should do to both keep current players engaged and to attract new users
Getting the basics right: Most of the app´s one-star reviews (and there are many of them) are caused by the broadly known server issues which result in multiple app crashes, freezes, and slow downs. Niantic´s developers should also improve very quickly the maps and GPS accuracy
Improving the design and aesthetics. especially since Pokémon GO is part of a quality brand like Pokémon
Giving players more options to interact with each other and making it more social. Like in most games, players want to play with or against each other and trade items (e.g. Pokémons). There should also be more PokéStops and Pokémon Gyms to make the game even more exciting. Also some storytelling and narrative could and should be added to avoid monotony for more experienced players. This would help not having in the end a too simplistic game of which players get soon bored
Pokémon should have a much broader range of customization options, i.e. to allow players to customize their avatar beyond the limited options which are currently available. Also the launch of specific, value-adding Pokémon GO devices should be considered like the upcoming release of Pokémon GO Plus
The Niantic team should try to accelerate the global roll-out of the game and at the same time to work on regional and local adoptions (e.g. more specific Pokémons only available in certain countries, regions, cities, etc.
A comprehensive strategy is needed on how to integrate third-party app developers, advertisers, and other companies and to come up with a strong future monetization model (it´s pretty passive in this respect right now). When doing so Pokémon GO needs to avoid giving players the impression that they would force or manipulate them into buying items they do not need or want.
Last, but not least, Nintendo will have to decide soon on how to get more involved (or not). From my point of view, one of the main strategic challenges is to find the right approach to have a certain fraction of Pokémon GO players convert to console gamers and to become loyal Nintendo fans.
What other companies could/should do to learn and benefit from Pokémon GO´s success as much as possible
First, understand that Pokémon GO has two main effects: (1) It has introduced and popularized the concept of AR (at least a basic version of it) i.e. virtual objects visualized and geolocated in the real world, and (2) it has helped businesses understand the value of AR as in-game Lure Modules (an in-app purchase to attract Pokémon to a particular location). That results in the following opportunities for a multitude of companies (by the way, if you're serious about learning how to capitalize on Pokémon Go, and if not done already, first you need to play it. That´s the only way you'll comprehend the game and its underlying concepts. You should also check out some of the available tutorials).
As a business the two most relevant game elements to understand are PokéStops and Gyms which both are real-world locations that have been designated as special venues in the game. At a PokéStop (could be a famous landmark, or even a business like a hotel, theme park, restaurant, etc.) you can find Poké Balls and other special items called Lure Modules (or just Lures). These items can only be acquired through in-app purchases. When attached, Pokemon will be drawn to the location and nearby users can see and capture them. Lures at a PokéStop are bound to attract players and therefore to generate increased traffic. Currently the chosen locations are mostly arbitrary and come from data in Niantic's previous AR game Ingress. As a business owner and/or marketer you should try to evaluate together with Niantic how best to qualify to offer sponsored PokéStops in the game.
The same is true for Gyms which are places where players battle each other using their Pokemon or train their creatures. Some weeks ago in Japan, McDonald´s announced that it would be the game´s first major sponsor in a deal which turns the firm´s 3,000 stores in the the country into Pokémon Gyms.
Ultimately, the real challenge will be to convert increased traffic into sales. Or in other words: Avoiding having a large number of Pokémon GO players in your venue which don't buy anything, but possibly even block your original patrons from doing so (e.g. by occupying retail space, car parks, etc.). So you should better think beforehand about offering Pokémon GO players dedicated incentives such as e.g. discounts. The best way is to integrate these incentives into the game itself so players feel understood and appreciated.
Develop your own games. For example U.S retailer Sears is hoping to recreate the Pokémon GO excitement in its stores with a game called Find Max where it tries to combine real-world scavenger hunts and in-store activations. The game, which appears inside the Sears mobile shopping app, was developed with the makers of The Secret Life of Pets movie, bringing some of the film’s characters to the interactive experience and enabling shoppers to search for clues and unlock prizes using the retailer’s shopping application.
In general game developers and retailers could also join forces to make a limited amount of in-game items (or virtual currency) available at specific retail stores or local businesses who in turn would pay for the increased foot traffic.
As a company owner or marketer you can also learn from Pokémon GO about how to leverage the strong appeal of nostalgia and how important it is for customers to collect and being rewarded. Preferably in a community setting with an appealing mission. Finally, you might also want to have a thought about producing Pokémon-based content to spice up your social media outlets and your newsletters
CONCLUSIONS
Pokémon GO has had many positive effects since it was introduced. Which other game or app can claim having succeeded in moving an international army of couch potatoes out of their homes and to re-discover the sun, fresh air and even meet other people to embark on a joint mission? Innovative businesses (of them many small and local ones) have been able to piggy-back on its success e.g. by increasing foot traffic to their venues and recruiting new customers.
Without doubt, Pokémon GO has also proved in an impressive manner that apps are far from dead or not working. Brands and developers will need to better team up to develop content people find engaging and love. Augmented reality will become mainstream far quicker than expected by many. Instead, it has opened up new engagement and revenue opportunities for the entire app ecosystem by creating a model between online and offline.
Although many Pokémon GO users may be angry about the most recent closure of third-party trackers like Pokévision, PokéHound, etc. as well as the removal of the game´s footstep tracker (and some other handy elements) with the recent update to version 0.31.0, Pokémon GO still stays strong.
The main question is how Niantic can further develop Pokémon GO to keep it engaging and exciting to grasp our attention. Saying that, looking at how quickly it has grown within just one month into a global phenomenon, how it seems to jump from strength to strength, how many opportunities there still are for the game to be captured, it would be a severe mistake discarding it as a fad. Instead you should consider it as a unique chance to learn, and if possible, to leverage it for your own business.
Think about it this way: How much time do you or someone you know spend playing Pokémon GO? Any idea how much money you or they have spent on it so far?
Anyway, you gotta catch them all... or they might catch and eat you for breakfast. They´re here to stay. Like ´em or hate ´em...
What do you think? Please share your thoughts with us by leaving a comment below.
Best,
Andreas von der Heydt
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Andreas von der Heydt is the Head and Director of Kindle Content at Amazon in Germany. Before that he held various senior management positions at Amazon and L'Oréal. He's a leadership expert and management coach. He also founded Consumer Goods Club. Andreas worked and lived in Europe, Australia, the U.S. and Asia. Andreas enjoys blogging as a private person here on LinkedIn about various exciting topics. His latest book is about what makes a future leader. All statements made, opinions expressed, etc. in his articles only reflect his personal opinion.
