By: Kayleigh Yerdon, Cornell University Have you seen anyone walking through the neighborhood staring at his or her phone lately? Now you’re thinking: all the time, people never get off of their phones anymore. But, you might have even noticed a huge increase in the number of these people in the past week. So, think again: have you noticed any really strange, seemingly random walking behavior recently? Many people have. That’s because Nintendo has given many of us 150 new reasons to walk around staring at our phones.
On July 6th, the Japanese gaming group released its newest production, Pokémon Go, which proved to be an enormous hit in the United States. The game seemingly aims to revamp the Pokémon franchise that began in 1995. To do so, the Pokémon group decided to keep in line with some of today’s most popular technology companies by creating a social app that can be used all day via smartphone. In effect, they added an interactive, Pokémon-themed smartphone game to their previous list of popular card games, video games, Gameboy games, movies, and TV shows.
The game acts basically as a real-life scavenger hunt, in which users – called “trainers” – must leave their real-world homes in order to “catch” 150 possible Pokémon characters within the app. Using mapping and camera functions on their phones, players can take pictures of different locations that are “homes” to the creatures they’re trying to catch. The aim of the game is to catch all of the characters and many users have even reported that they feel addicted to the game – like they have to catch all of the Pokémon. However, as players move forward in the app (which you can download for free from the App store), more of the Pokémon characters are found in obscure locations – that require the trainers to move to new places. To avoid this, players can opt to pay for in game “extras,” like “Pokéballs” and “Stardust.” Basically, you can pay real money to more easily catch characters in the game.
This is where Pokémon Go transitions from the virtual world into the real world. Players need these “extras” to catch more Pokémon and upgrade their in-game inventories. While you can earn Pokécoins (used to buy Pokéballs and Stardust in the game’s store) throughout gameplay, it is much quicker to pay the 99 cents for 100 of the virtual coins. You can even pay up to $99.99 for 14,500 Pokécoins in a single transaction. The coins you earn (or buy) can then be used to redeem any extras within the game – helping you catch more Pokémon. In essence, Pokémon Go’s revenue model mainly entails many in-app purchases after players get addicted to catching as many Pokémon as possible.
There have been a variety of estimates about the game’s total possible revenue from in-app purchases, but many reviews – like MarketWatch, for example – have estimated that it will bring in revenue of upwards of $58 billion just this year. With a national user base that is expected to pass that of Twitter just this week, it’s fair to say that in-app purchases from Pokémon Go could definitely bring in a lot of money in for Nintendo. Furthermore, after hearing of the success of Pokémon Go, some stores have even paid Nintendo directly to become sponsored locations – meaning they become “home” to a Pokémon for users to catch. Because players can only catch Pokémon from exact locations, stores believe that this method will help them to bring in new customers. On the other hand, Nintendo gets the added benefit of being paid for their Pokémon locations – yet again profiting from the creation of the app.
That said, Pokémon Go became one of the top-grossing apps on the iTunes store almost in less than 24 hours. However, game creators believe that the biggest test will be for the game’s release in Europe and Asia. Japan, most specifically, which is the Pokémon Company’s home market, is expected to count for over a third of the game’s total revenue. It is expected that the game will be released in Europe and Asia this week, and a good public reception in Japan alone could mean an estimated $104 million for Nintendo’s full-year net profit.
So, look out, investors – Nintendo’s stock price, which increased around 52% after the game’s release in the United States – could see future price fluctuations depending on the success of the game’s worldwide release. The popularity of this game around the world could also influence other technology or gaming companies in their future app development ideas. The need to “catch ‘em all” could be the start to something big in the worldwide gaming industry!