Ever since the app hit Apple and Google’s app stores on July 6th, Pokémon GO has skyrocketed in popularity, surpassing the number of daily active users that Twitter had. With the average player spending 43 minutes and 23 seconds a day on the app, the game has a higher usage time than WhatsApp, Instagram, Snapchat and Facebook Messenger.
The hugely popular augmented reality game inducts players into the world of Pokémon. To catch the many Pokémons, you have to move in the real world. The game tracks your phone’s GPS coordinates as you look for these creatures, and once you are within ‘sight’ of a Pokémon, your phone’s camera will allow you to ‘catch it’ in a photo. The places where Pokémons congregate are called PokéStops and “Gyms”. These are located at public places near you, such as city centers, historical markers, monuments, popular malls and stores. Anyone can fill out a form and request to be a Pokéstop.
Do you want to capitalize on the “Pokémon GO” phenomenon? Of course you do!
First things first: how Pokémon GO makes money
Pokémon GO makes money through in-app purchases. The game itself is free to download, but players need to advance through levels and evolve and that takes time. Those who don’t mind parting with $0.99 can buy a pack of 100 “Poké Coins” with which they can buy items in the game that can help them advance without all the time spent training. The coins come in packs of 100, 550, 1,200, 2,500, 5,200 and 14,500. The most expensive pack costs $99.99. It is estimated that Pokémon GO makes $1.6 million a day.
But there’s a much bigger source of revenue hidden in the game, and that’s what’s got investors coming down with Gold Rush fever. It is the ad revenue, and for the more visionary, the ability to explore new business models.
How can businesses and markets cash in on the Pokémon GO mania?
1. Use “Pokémon Lure” to get customers into your store. Players are roaming around looking for Pokémons and locations called Pokéstops. These locations have hidden items, so players tend to congregate around them. Businesses are tapping into the game’s following to help sales. For example, a coffee shop in California offered to drop a “lure” for every 15 drinks purchased. A lure is an in-game item that attracts Pokémon to a location for 30 minutes and costs 100 pokécoins (that’s 99 cents). Here are a few other ways businesses are trying to profit from Pokémon GO mania:
- If a player drops a lure, which could attract other potential customers, a pizza restaurant will give you $4 off your meal.
- A hotel restaurant is offering 10 percent off for players who identify with a “Team Mystic”, one of the teams you can pledge loyalty to in the game.
- A pretzel store is going deep into the Pokémon GO knowledge and offering a pretzel giveaway for the correct answer.
Businesses can use a “Lure” to do just-in-time promotions. Bars are inviting people to come in for drinks and to catch Pokémon. Coffee shops are doing promotions in the morning to get your “Morning Joe” and catch a few Pokémons.
2. Publicize that you are near a “Pokéstop”. Yelp (YELP), the review site, has added a “Pokéstop Nearby” filter to show you which business are located near a Pokéstop, the locations where players can stock up on Pokémon-catching supplies. The company recently announced this new feature and urged customers to chime in. It’s asking players to help identify which businesses are Pokéstop-adjacent by checking in to locations. For example, when you check into a restaurant, Yelp will now ask if there is a Pokéstop nearby. At the moment, Yelp’s Pokéstop map is a little sparse, but that is expected to change as armies of Pokemon hunters head out again this week. Smart businesses will likely flag themselves in an attempt to lure people inside.
3. Become a “Pokéstop”, future feature. Pokéstops are pre-determined by the developer, Niantic Labs. This is a hidden gem, Niantic has a fantastic marketing and revenue opportunity here. Currently locations are supposed to be accessible to the public and a permanent point of local interest (public art, park, cemetery, post office, etc). Although the initial set of Pokéstops and Gyms were pulled from a subset of Ingress portals, a game created by Niantic before, there are paid portals in Japan and parts of Europe. Be assured that in the future, businesses will be able to pay to become “Pokéstops”.
4. “Pokémon GO” Channel. Pokémon GO is unlike other games like Angry Birds or Candy Crush. It is more like Television because the game play is like a channel and the ads are interlaced into the game play. It is like taking your TV for a stroll in your neighborhood and getting the right contextual ads. Think about it as YELP/FourSquare with better interactions. It is a television channel that serves as the bridge between the real and virtual world. It gives you an immersive experience. Like Google and Facebook, I am sure there is a model in development to monetize the time on the platform. Customers will not like an Ad supported banner model that may ruin the Pokémon GO experience, but there are other subtle ways in which a business can contextualize and differentiate itself from its competition. Think about product placements within a movie.
5. Acting on Pokémon GO, future feature. As additional game components get added, you will be able to star in your own Pokémon GO play. Immersive play will allow you to play with other players and create a compelling experience which is unlike anything else. It is like the movie “Total Recall”, where you can immerse yourself in a virtual adventure to train and have your Pokémons compete against other players. You play the role of the trainer helping your Pokémons compete. Think Mr. Miyagi from the movie The Karate Kid.
6. Pokémon GO Pro-league, future feature. Finally, as the popularity of the game increases, there could be a real potential for creating a league similar to the NFL or NBA with professional teams competing against each other in Pokémon duels. The ability of multiple spectators not only watching others play but potentially immerse themselves into the action will create a compelling different experience to view and follow sports. Don’t you agree?
I would love to hear your monetization ideas/models around Pokémon GO.