Do you have Pikachu? Unless you’ve been hiding under a rock, you should know that Pokemon Go became available in the Philippines last Saturday, Aug. 6, exactly a month after its global debut on July 6.
Phenomenon
The game is a global phenomenon, with estimates of first-day revenue ranging from $3.9 million to $4.9 million. On the Monday after its US launch, Nintendo, the company that owns the Pokemon franchise, saw its stock price surge over 24 percent in one day. Google’s play store shows over a hundred million downloads of the app and the game had more first week downloads from the Apple App store than any other app in history.
An online post by Craig Smith collects some interesting statistics. His most recent estimate of the amount of time users spend in the app daily—26 minutes. Estimated accumulated global revenue as of Aug. 8 was $200 million. As of Aug. 2, the estimated daily average revenue was $10 million. This compares with the daily revenue average of $1.6 million estimated by Techcrunch’s Darrell Etherington a few days after the global release (posted 11 July).
As of July 13, Kurt Wadner (recode.net) estimated 9.5 million daily active users. By contrast, estimates of the core active users of Ingress, the first augmented reality game, range from a low of 350,000 to a high of 7 million. And Ingress is a game that is four years old!
To keep things in perspective, let us remember that the Pokemon franchise is itself a phenomenon. Techcrunch estimates over 279 million copies of the game have been sold to date. At the height of its popularity, the franchise included a highly popular cartoon series and a host of licensed toys and other merchandise.
More importantly, the generation that grew up with the Pokemon franchise are tech natives. The mobile phone is their default communication device. Even more importantly, they are now in their late teens to mid-twenties—precisely the age when they have spending money, are likely single, and, partly due to the credit crisis, globally the generation that is still able to depend on their parents for housing and food.
Lessons
There are lessons to be learned here—and no, I don’t mean game tips. Although, by now, I hope you already know how to get Pikachu.
Lesson No. 1. The easiest people to sell to are those who are already customers. The game play for Pokemon Go is nearly identical as that for Ingress. However, Ingress relies on entirely new intellectual property and a new story line. This means that it has to attract an entirely new market—selling not only the idea of an augmented reality game but also the story line and game play. Interestingly, the Ingress game play is very similar to the underlying game play of the original Pokemon game—one involving discovering things and duels.
By contrast, Pokemon has a huge customer base, one that has strong positive memories of the franchise and the main characters of the franchise.
At this point, if you do happen to have been living under a rock and have no idea what an augmented reality game is, here’s a quick definition. An augmented reality game involves superimposing game information on real life. In Pokemon Go, the game uses GPS information and a map in order to track player movement. Players earn points through visiting special areas (called Pokestops), catching Pokemon (creatures in the Pokemon game), dueling with their Pokemons, and walking.
Lesson No. 2. Build on what you have. Pokemon Go is the result of a cooperation between Nintendo, the creator and owner of the Pokemon franchise and Niantic, the makers of Ingress. The game uses the underlying logic, and the maps created by Niantic for Ingress as the skeleton of the game.
In fact, Niantic and Nintendo brought together two of the key components of any successful product—a large existing market and a core product structure.
Lesson No. 3. Take advantage of normal human behavior. We always hear that one of the best ways to market a product is through word of mouth. It’s free and satisfied customers are credible. The great thing about these games that require you to go out and find things in the real world is you then have a great reason to interact with others. Also, you profit from having many people playing the game – so you tend to tell people about it. The advantage of Pokemon Go over Ingress is that Pokemon has a massive base of people who already know the characters. And while they were children when they first fell in love with Pokemon, now they actually have their own income.
So what?
There are, of course, glitches. The game is so popular that servers can get overwhelmed. Players can get so involved that they end up endangering themselves. The game actually stops if it senses you are moving too fast and reminds you that you should not be playing while driving. Clearly, there is still room for improvement.
However, there is also much opportunity for monetizing. As most business people know, any product or service that enables the gathering of many people to a specific area, be it virtual or real, has enormous potential for use in drawing potential customers. AR games such as Pokemon Go can be used to gather people to real places, not just websites. The game allows the placement of “lures”—essentially a feature that results in a high concentration of Pokemon in a single place. This, of course, results in a concentration of people. There is a report of one zoo opening during the night, when most of the animals are asleep, and actually beating their regular day’s receipts simply because they filled the zoo with lures. In Manila, lure parties are already being announced online.
But the most important job for the folk at Niantic is this: How do they keep the game continually engaging? How do they cater to the needs of those who don’t necessarily want to travel the world to collect all of the 150 something Pokemon? And something they don’t necessarily want to discuss with the folk at Nintendo: what other things can they build with their core infrastructure?
Starting is hard. Growing and sustaining – well, that can be harder. It’s a brave new world. But the basics of business remain the same.
Readers can email Maya at integrations_manila@yahoo.com. Or visit her site at http://integrations.tumblr.com.
