Though Pokémon Go has been available for less than a week, its massive success has already had financial consequences. In the days immediately after the mobile game’s release, Nintendo’s stock price climbed aggressively. Meanwhile, on a smaller scale, some businesses have reportedly activated in-game lures to draw in customers via the promise of more and better Pokémon on site. (If you don’t know what any of this means, check out Slate’s thorough explainer on the topic.) For all that, though, it hasn’t been entirely clear how, exactly, the game will make money for its creators. New reporting from the Financial Times, however, suggests one intriguing possibility.
At present, in-game transactions are the most immediate and obvious source of revenue in Pokémon Go. Like many other mobile game companies, Niantic sells in-game tokens (pokécoins) for real money (the exchange rate varies, depending on how many you’re willing to buy at a time), which can then be exchanged for items such as pokeballs, incense, and eggs. (Again, confused reader, just read our explainer.) In the iOS App Store, the free-to-play game currently sits in first place on the “top grossing” chart, outdoing perennial hits such as Mobile Strike and Game of War. However, while microtransactions reportedly account for a significant portion of App Store revenue, research has long indicated that a significant percentage of gamers are unwilling to spend real money while playing. For Niantic, that may mean seeking other ways to monetize Pokémon Go’s massive user base.
Reporting out an interview with Niantic CEO John Hanke, the Financial Times’ Tim Bradshaw and Leo Lewis suggest that advertising may be coming to the game. As Bradshaw and Lewis note, there are already real-world promotions in Niantic’s cult-favorite augmented reality game Ingress, where businesses can sponsor “portals” to draw players in. Hanke apparently brought up this revenue stream while in conversation with the publication about its new hit, speaking to his company’s “cost per visit” model, which is “similar to the ‘cost per click’ used in Google’s search advertising.” Bradshaw and Lewis clarify that Hanke “would not comment on any such sponsorship deals that had been struck.” It makes sense, however, that such a model might pair well with Pokémon Go and appeal to advertisers, not least of all because it could drive real, measureable foot traffic from the game’s huge mobile audience.
If so, such sponsorships may just be the start. Given that the game now imprints Pokémon on the real world, it stands to reason we could soon see billboards popping up behind those elusive little monsters. To be clear, this is all speculation for now. But it’s clear why such a business model might be effective, not least of all because its augmented-reality mechanics would make it possible for advertisers to reach out to players in ways largely unavailable in previous mobile games. In a world where you can stumble across Pikachu out on the street, is it really so crazy to think that he might welcome you into the local Starbucks?
