Pokemon GO! has made $14M already
July 11th, 2016 | /pokemon-go-has-made-14m-already/
Last week a collaboration between The Pokémon Company and Niantic released an augmented-reality game called Pokémon GO! which managed to instantly reach the top-grossing ranks on both Android and iOS platforms. Few other titles have managed to do this, and considering the relevance of the companies involved (Nintendo, Alphabet), as well as the novelty of augmented reality technology, presents a unique case study on the current state of the mobile games market.
Early estimates indicate that Pokémon GO! has so far managed to generate $14.04 million across mobile platforms since its release, putting it ahead of other titles using the franchise, including Pokémon Shuffle Mobile which has earned an estimated $14.03 million since its release in August, 2015.
Why we are not surprised
Pokémon GO! doing so well initially should not be a surprise: it is one of the most enduring and widely popular game franchises in the world. It has produced no fewer than 18 full feature films, a cartoon series, trading card games, and a slew of swag. More so, even though Pokémon is operated independently, it is part of the Nintendo empire, which saw a similar consumer response with Miitomi. It is hard to underestimate the strength of this Japanese giant and its assets, even if contenders have emerged in the last few years.
The initial audience response is more telling of the increasingly lethargic mobile games market: with its growth slowing, it takes an established franchise like Pokémon for the numbers to suddenly, and likely briefly, flutter before reestablishing its previous equilibrium. Given the current of user acquisition in the mobile games market on iOS ($4.01 in May 2016, up 2.3% YoY) and Android ($3.40, 3% YoY), many industry participants seek to leverage established franchises and brands to offset marketing expense.
What will be critical is the coming period: can Pokemon GO! keep its momentum and cultivate a loyal following. Just like every other mobile game it will have to face the retention figures after 7, 30, and 90 days. Chances are we are looking at the mobile games’ equivalent of a summer hit song rather than a revolution in the mobile game monarchy.
What this means for Nintendo
The initial success of Pokémon GO! has drove Nintendo’s market share price up 25% in Tokyo trading today. However, the Pokémon Company is a licensing and marketing firm under the control of a joint-venture between Nintendo, Game Freak, and Creatures, which each represent a different branch of licensing products: games, magazines, and trading card games, respectively. Nintendo owns 32 per cent of of The Pokémon Company. Niantic Inc., the developer behind Pokémon GO! is a spin-off from Google parent Alphabet, and previously published a comparable augmented reality game called Ingress, which has only generated just over $1.1 million since its release. Nintendo, in other words, reaffirms its control over a very valuable franchise portfolio that may yet carry the company through its current phase as it seeks to recover from disappointing Wii U sales, the loss of one of its figureheads, and the market’s shift into mobile gaming.
What does this mean for AR/VR?
As the games industry continues to ramp up its efforts behind both AR and VR, the consumer market ultimately requires a ‘killer app’ that will allow mainstream audiences to familiarize themselves with new technology and its applications. When the iPhone was first introduced, it was games like Angry Birds that taught consumer audiences how to swipe and use a touch-screen, which was a novelty at the time. Augmented has been available for some years, and with the popularity of the new Pokémon game seems to have found a suitable application with the ability to both motivate and educate audiences on its uses. Mobile devices are the first point of contact for mainstream consumer audiences with augmented reality, but on the long term companies like Microsoft have devices like the Hololens in development. For 2020E we forecast the total AR market (hardware + software) to reach $4.3 billion in worldwide revenues.
- Pokémon GO! Has so far managed to generate $14.04 million across mobile platforms since its release, putting it ahead of other titles using the franchises, including Pokémon Shuffle Mobile which has earned an estimated $14.03 million since its release in August, 2015.
- Niantic previously published a comparable augmented reality game called Ingress, which has only generated just over $1.1 million since its release.
- User acquisition on mobile are up year-over-year for May 2016: $4.01 on iOS, up 2.3% YoY, and $3.40 on Android, up 3% YoY.
- The worldwide market for games totals $103.9 billion this year, and is up 7% year-over-year. The mobile games market.
- For 2020E we forecast the total AR market (hardware + software) to reach $4.3 billion in worldwide revenues.
- On live streaming channels, Pokémon GO! is among the top 35 titles, with almost 200,000 hours of content streamed since launch, placing it well above other Nintendo franchises like The Legend of Zelda: Majora’s Mask and Mario Kart 7.
- See our most recent AR/VR numbers.