Pokémon GO takes over the world!
Unless you were in a coma last summer you’ve heard of Pokémon GO. Launching on July 6, Pokémon GO quickly went viral and skyrocket to be the #1 App both in popularity and revenue. An AR mobile game, created by developers Niantic Inc., the App features those little Japanese monsters that older Millennials and younger Gen Xers loved in the 90’s. It is the fastest game to earn $600 M in revenue, taking just 90 days, and as of 1/31/2017 revenue estimates are $1 B. In only 19 days the Pokémon GO App had 50M downloads world-wide, peaking in September with over 500M downloads. As it turns out tossing Poke Balls at an unsuspecting Pikachu is a lot more fun than it sounds on paper but that is not the only reason for Pokémon GO’s success. So how did Pokémon GO do it? What factors determine user engagement and at the end of the day how do free Apps make money?
With so many Apps competiting for user attention there are measurements that will give insight into overall App engagement and adoption performance. Some of those key factors include:
- Time spent on the App
- Long run retention rates
- App stores user rankings and reviews
Pokémon GO definitely had some instant success with several of these measurements.
The overall number of times an App is downloaded is a primary measure of overall engagement. Another insight is how quickly those download numbers increase which will give inclinations of the potential for the App to “go viral”. Pokémon GO absolutely can claim victory for download rates. Looking at the graph the download rates were staggering with almost 6 Million downloads on the first day alone.
Total average daily visitors is another important metric to determine App engagement. By mid August Pokémon GO was putting up some really impressive numbers with 20+ Million daily visitors to the App.
Where the App ranks on an individual users list of most frequently visited Apps daily is important as well. The sweet spot is to be among the top 3-5 most used Apps daily. Again by mid-August Pokémon GO was in a great position beating out the likes of Netflix and Pandora.
Average Daily Time Spent on the App
The more time spent on the App is another measurement of success. Pokémon GO peaked at 43 minutes, this is phenomenal for a gaming App. The next 3 closest Apps were all social media; WhatsApp, Instagram, and Snapchat.
Long Run Retention Rates
Basically this is how many days an App user continues to use the App. For the App industry the average for a 3 day retention rate is about 15%. Pokémon GO averaged over 60%.
How do free Apps make money?
Free Apps are everywhere, in fact over 90% of Apps are free to download according to Tech Crunch. What is even more interesting is that 98% of Google play revenue comes from these free Apps. On the surface it seems difficult for a free App to make money but there are several ways this can be accomplished.
- Email Marketing
- The “Freemium Upsell”
- Amazon Underground
- Selling Merchandise
- Affiliate Income
- In-App Purchase
Pokémon GO used several methods, especially In-App Purchases and Sponsorships, to become one of the fastest growing revenue Apps at the height of its popularity. What an App makes on its daily active user (DAU) is an important contributing factor to overall success. In the Pokémon GO game users can make In-App purchases of Pokecoins and use those to acquire Poke Balls to further advance the game. In-App purchase are big money with 80% of iOS App game players making purchases. Approximately 29% of Pokémon GO players made In-App purchases and 5% of all Pokémon GO players have spent over $100 on In-App purchases. At its height Pokémon GO was generating an averages of $0.25 per DAU out performing another very popular game Candy Crush Saga at $0.22 per DAU and casual games in general at $0.10.
Sponsorship opened up additional revenue streams for Pokémon GO. McDonald’s was the first major sponsor and paid for rights to open up a Pokémon gym. The concept is that the sponsorship will drive traffic to McDonald’s and while there Pokémon GO players will purchase items. Of course this might be counterproductive to one of the games claims that it encourages activity and leads to weight loss but that’s a topic for another day. Other sponsors have since jumped on board including BoostMobile, Starbucks, and Sprint. Some interesting rogue sponsorships have been seen across the country where bars and restaurants have used the App to set up “Lures”, attracting these allusive little mosters, with the hops of gaining more patrons and retaining customers in the establishment for longer periods of time. Sponsorship can take many other forms in the mobile App world including to but not limited to re-branding the App to reflect sponsors name.
Pokémon GO is not without its challenges. There were various safety concerns being raised. Some might remember all the restrictions being added to the software to limit driving while playing. Other serious concerns around Poke Stops and Lures being exploited by criminals who would ambush players. The game also lost some luster, at least in the US, when kids went back to school and the weather became a little cooler. Currently the game ranks in the 100s for most popular Apps, although still around 15 for most popular gaming Apps. There may be a resurrgence as the summer months approach but there are definitely opportunties for the game to reduce seasonality impacts. Reviews still show users frustrations around location problems and login problems. When I asked some Pokémon GO users about their experience and what lead them to stop playing here are some additional opportunites for the game to retain and engage users.
What feature(s) did you like least about Pokémon GO?
” The inconsistency in game play, you could use the same finger movements on the screen however your poke-balls travelled differently thus wasting resources. The worst part about the game and ultimately why I stopped playing was the compounding points needed advance your character. As you advanced your character you would find stronger pokemon and you could evolve stronger pokemon. Everyone I know stopped playing around the same point although we reached that point at different times. Levels 20-24″
Ultimately the unique nature of the Pokémon GO game contributed to its popularity and viral launch. The game combines AR technology with many other engagement factors. There are social elments that bring people together not only in the digital world but the physial world too. Players interact with each other sharing their passion about the game at various Poke Stops. Another aspect is combing gaming with outside activities. How many people remeber being yelled at by their parents telling them to get outside and play. One statistic showed that players report take 26% more steps a day. There is an educational component with Poke Stops being located at historical sites. All of these elements came together to make Pokémon GO a success and will be just the beginning for this style of Mobile App gaming.