Pokémon Go
Pokémon Phenomenon
Everybody's running through the streets throwing Pokéballs at virtual Pokémon with this free
app that has taken the world by storm.
So how are the big shots cashing in on our hunger for escapism?
We should probably ask an accountant about that…
I mean the potential is enormous.
Let’s throw the basic one out first, if you’re a serious Pokémon Go player, you’ve
probably laid out some dough on in app purchases.
99 cents may seem like small change to progress a bit faster in the game, but multiply that
by millions and we’re talking real money.
Many people aren’t just spending 99 cents either.
They're spending hundreds of dollars.
Analytics Firm Sensor Tower are reporting that iOS users alone are spending $1.6million
a day on the app, with analysts predicting it could rake in over a billion dollars of
revenue for the game makers as the worldwide roll out continues.
This is just blowing up!
Coffee shops, pizza places, clothing retailers, are all spending money on in game ‘lures.’
Apparently a pizzeria owner paid ten dollars to lure people and his business is up 75%.
These are things that attract rare Pokémon to a specific location, and with Pokémon
come customers, tired from a long day of running around the real and virtual world.
But the game's revenue won’t stop there, sponsored locations are already being used
by McDonalds in Japan, to turn over 400 of their locations into Pokégyms.
I hope the irony isn't lost on you guys there.
But Niantic, the game’s creators, are not the only ones gaining here.
Shares shot up almost 25%.
Nintendo right now is worth seven billion dollars more than it was last week.
The highest one day gain since around 1983.
Nintendo stock has skyrocketed.
This is clearly a win for Nintendo.
Investors can hardly contain themselves.
Investors in Nintendo, who own a portion of Niantic, which created the game and a portion
of the Pokémon Company, are smiling as their stock price doubled since the game’s launch,
before people came to their senses and the stock price pulled back a little.
It's not just Nintendo that's benefiting from this.
Investors are hoping Nintendo can recreate the success with their other beloved franchises,
but at this point they're gonna have to share some of their profit with others like Alphabet,
Google’s parent company and co-investor in Niantic.
Niantic, they are the actual developer of this game.
Then there’s Apple and Google again, who through their 30% commission on in-game app
purchases, are smiling all the way to the bank.
Apple could make as much as three billion dollars in the next two years if the game's
success continues.
That means Apple at least in the short term could make more money than Nintendo on it's
own game.
Because Nintendo only owns 32% of the Pokémon company and a portion of Niantic.
And they split that with the App store, like Apple and Google.
And then the actual game manufacturer, and then this company that they own together.
Clever people on the street are also finding ways to cash in.
Marketing experts say businesses could further profit from Pokémon.
Some are offering to drive Pokémon players from one Pokéstop to the next.
Others are offering to play for you, increasing your game level and hatching your eggs all
while you eat, sleep and work.
Got rare Pokémon?
People are willing to buy your account.
The funny thing is, the more people that jump on the Pokémon bandwagon, the more fuel they
add to the fire.
Spreading it to even more users and reminding people to play the game.
This is business gold.
On the shadier side, Niantic has access to a lot of user data.
Where you are in the world, where you are going, what times, identifying information
on you.
They have access to it all.
Are they using this data for something else?
The game's terms and conditions allow for it, saying they can share the information
for “research analysis, demographic profiling and other similar services.”
They even go as far as calling it a “business asset.”
Yup, that’s your information, now a huge corporation's business asset.
So yes, the game is making a lot of money.
But the big question is can the game continue to build on this momentum?
What does this really mean for the company down the road, once the fever dies off a little bit?
How long do you think this can last for Nintendo?
What will Nintendo do with this like new breath of life that they have?
We’ve seen crazes come and go before.
So will the game, and therefore the economy around it, have staying power?
Or will we all rush to the next big thing in a few weeks?
Time will tell but either way, forget Pikachu, I choose you.
You’re welcome.
Have a Pikachu kind of day.