Pokemon Go is a cultural phenomenon. It has been a popular game ever since its release a few years back. It capitalized on the dreams of many who grew up being exposed to the games and TV shows in the Pokemon franchise of wanting to experience the same in the real world.
The game first came to the attention of people around the world the moment it was released. In its initial few days, it received a surge of downloads from locations worldwide.
Soon, we were witnessing people being outside and exploring places around them, with phones in hand and on the lookout for Pokemon. It united communities of gamers around the world and even led a large chunk of the audience to re-experience the thrill of catching Pokemon, but this time in the real world.
But how does Pokemon Go continue to retain players years after its release? How does Pokemon Go make money? What are the revenue models that Pokemon Go follows?
Let’s find out.
Before we dive deep into Pokemon Go’s monetization model and revenue status, let us have some background for better context on the game.
Pokemon is one of the biggest media franchises in the world. It started as a game in one of Nintendo’s earlier consoles and became a hit instantly, garnering widespread critical and user acclaim. Since then, it has spun a plethora of TV shows and games.
In fact, the Pokemon series of games are among the most-sold games of all time. There have been numerous games in the franchise that has introduced new locations and new Pokemon with each new game in the series.
However, all these games have been restricted to the virtual world inside games. You had to own a console and play within these virtual worlds, capturing Pokemon and then battling them with enemies inside the world or connecting with friends online and playing with them.
Enter Niantic. The San Francisco-based video game development company partnered with Nintendo to translate the gaming experience into the real world.
Thus began the frenzy of Pokemon Go. It had been a dream of many a Pokemon fan to catch these monsters in the real world and battle with their friends. The game made it closest to the experience of being a Pokemon trainer in real life.
It also became one of the first games in the world to become Augmented Reality popular. Augmented reality (AR for short) is the method of overlaying digital information in the real world. Pokemon Go took the same concept and bought Pokemon into the real world in digital forms.
The game works like this: you view the world through your camera and locate Pokemon spread around locations around you. Once you find a Pokemon, you battle to weaken it and throw a Pokeball onto it to capture it and then store it. You can use the captured Pokemon for battles in the future.
Currently, the game is only available on Android and iOS. Because to play the game, you have to move from one location to the other. Currently, only mobile devices have the capability to handle this type of gameplay.
Like its popularity, Pokemon Go had an initial surge in terms of revenue as well. In 2016, the year of its release, the revenue stood at $832 million, breaking a few records along the way.
But the money Pokemon Go makes per year dropped 2017 to $589 million in 2017. However, the revenue had a resurgence in the succeeding years, with $816 million in 2018 and $774 million in 2019.
From then on, the revenue has been on a steady high, with a massive $1.12 billion in 2020 and $1.30 billion in 2021.
Likewise, the lifetime revenue of the game averages 1 billion per year. In July 2021, the game hit $5 billion in lifetime revenue. Then, in June 2022, its revenue crossed $6 billion.
Similar to the revenue, there has also been a fluctuation in terms of users. The game had its most number of users in 2016, with nearly 232 million, but then experienced a massive dip in 2016 to a mere 65 million. Then, in 2018 and 2019, the numbers climbed to 131 million and 113 million, only to dip again in 2020 and 2021 to 86 million and 71 million, respectively.
But even with a dip, the monetization has only increased. This is a clear signal that the average revenue per user is higher than a lot of popular games on the mobile market. Otherwise, the game wouldn’t have generated more revenue even with lesser players compared to preceding years.
All these stats cement Pokemon Go’s revenue as one of the biggest in the gaming industry. So, let us take a closer look at how Pokemon Go earns far higher revenues than the competition.
The main reason is that Pokemon Go employs multiple monetization strategies. So, narrowing down the game’s monetization model to just one or two is impossible. Instead, let’s take a closer look at all the different strategies implemented individually.
The freemium model is perhaps the biggest monetization model in the gaming industry right now. It initially had its origins in mobile games but has gained a foothold in console and PC games which have followed the traditional premium monetization method till now.
For those who don’t know, the freemium model allows the player to play the game without paying a single buck. But at the same time, there are numerous enhancements that the players can purchase inside the game, often for smaller costs. These include cosmetic enhancements, power-ups, and other items. Some of these offer additional gameplay benefits, while others are just there for the sake of appearance.
Most of these purchases are made using premium currencies specific to that game. These are currencies that are bought using real-world money from within the App Store or Play Store’s systems. Often, these come as bundles, each having a specific number of coins and a set price.
In Pokemon, this currency is called as PokeCoins. Just like in other games, players can purchase them as bundles from within the stores.
There are numerous items that players can purchase inside the game using this currency. Below, we list some of them:
PokeBalls are items within the game that are used to catch Pokemons and store them. Players battle the Pokemon they encounter and then throw the Pokeball at the Pokemon to catch them. Once caught, these PokeBalls are in the inventory of the players.
The game has numerous types of PokeBalls apart from the basic one. These include Great Ball, Ultra Ball, and Master Ball. Each of these has specific use cases within the game.
Incense is a special item that is used in the game to spawn Pokemon near the player for 60 minutes.
A lot of players would be attracted to this item in gameplay because of the numerous benefits that it provides. The primary benefit is that it alleviates the excruciating wait time that is often associated with catching Pokemon. Players often have to wait for a long time for Pokemon to spawn around time.
The incense item circumvents this issue by spawning Pokemon around the player for a set period of time. The player has that entire duration to catch and collect Pokemon of different types.
Lucky Eggs are another type of time-based consumable item. Using the item doubles the XP that the player gains for the next 30 minutes.
This item allows players to gain more XP and reap the benefits that come with an increased number of XPs. These include leveling up, which comes with better rewards, increased power for the Pokemon players, and faster hatching of the eggs the player possesses.
Lucky Eggs are bought as bundles that can be purchased using the PokeCoins the player has.
Raid Passes are exclusive passes that give players access to an in-game event called Raid Battles.
Raid Battles are a cooperative gameplay mode where a powerful legendary Pokemon appears for all the players who have opted in for the battle. The players must work together to beat this legendary Pokemon and then reap the benefits of doing so, including the ability to capture the said Pokemon.
There are numerous types of Raid Passes, including Remote Raid Pass, Premium Battle Pass, and EX Raid Pass. All of these come with their own set of benefits.
In-game advertisements are also an essential part of game monetization. This revenue model that is implemented in Pokemon Go works in the following way.
The ads are shown to the players. If the player engages with the ad, the ad network pays the developers a certain amount of money. But the amount of money and what qualifies as engagement varies from one ad to the next and depends on a myriad of other factors.
Numerous types of ads are implemented in Pokemon Go. Below we list some of them.
Reward Ads are a sub-set of ads that have recently gained popularity in mobile game monetization. Because it is a much more user-friendly type of ad that provides users with benefits for engagement.
For better clarification, reward ads are video ads that players can opt-in to watch. If the player watches the ad, then the game rewards them with an in-game item or a number of in-game currency.
This gives players the incentive actually to engage with the ad. In fact, a large number of users prefer games to have reward ads as they help them receive benefits that otherwise would only be available upon making in-app purchases.
Location-based Ads are ads set in specific locations within the virtual world.
Under this monetization method, specific locations will have ads displayed in the place upon reaching them. Pokemon Go intelligently uses this system to monetize its players’ attention.
Balloon Ads are similar to reward ads in that these bestow certain benefits on the player upon engagement.
These ads appear in random locations in the game during gameplay, and players can engage with them if they see fit. Engagement usually results in the player receiving certain pre-determined gifts.
Pokemon Go’s monetization model is also closely tied in with the game’s design choices. Below we list some of the game design aspects that have helped reap the maximum benefit from the carefully chosen revenue model of Pokemon Go.
Before Pokemon Go, numerous other Pokemon games were released over the years. They all follow the same core gameplay of starting out as a low-level trainer battling it out in a certain region and attempting to catch as many Pokemons as possible.
Pokemon Go retains the same gameplay experience. In this game, too, players start out as low-ranked trainer who has to catch as many Pokemon as possible.
Pokemon Go is also a novel experience. The mobile game development company behind the game has managed to translate the Pokemon gaming experience into augmented reality, leveraging exploration of the real world.
Even for the most hardcore of Pokemon franchise fans, Pokemon Go is a novel experience as nothing like it has ever been released as part of the franchise.
Pokemon utilizes the real world in its gameplay experience to the max. There are PokeStops and Gyms that correspond to real-world locations. These play a pivotal part in the gameplay.
Numerous social features in Pokemon Go make the playing experience a worthwhile one.
Among them is the feature to make friends within the game. You have the option to connect with friends in the real world or to connect with virtual friends you have never met before. This amplifies the social experience and facilitates a way to connect with fellow humans.
Then other social features revolve around the core gameplay. A Trading feature lets players trade the Pokemons they have with their friends. Then there is the Battling feature, which lets players battle each other from the same location or from remote. And there is the Gifting feature, which lets players gift in-game items to each other.
LiveOps has been conducted for Pokemon Go since its start in 2016.
Since then, there have been numerous content updates, some of which have become core parts of the gameplay. For example, new generations of Pokemon are added that are different from the original 151 Pokemon in Gen 1.
Second comes Mega Evolution, which has been a core part of other Pokemon games in recent times. These let fully-evolved Pokemon have one final form, using special in-game items.
Finally, there are themed events that revolve around auspicious days. There have been in-game events that were based on New Year, Christmas, Halloween, etc.
Pokemon Go is still among one of the popular games in the world. It is also one of the highest-grossing games. It continues to generate revenues in millions each month.
The reason for such good monetization is the revenue model Pokemon Go follows. The freemium method implemented in Pokemon Go’s revenue strategy is a testament to the opportunities in the gaming industry for those willing to experiment and make conscious design choices that reward players with a superior gaming experience.
Several factors determine the cost of a game like Pokemon Go.
First of all, there are the servers. Pokemon Go is a location-based AR game and hence requires robust servers that can handle fast data transmissions.
Second is the AR implementation. AR is a relatively new technology in terms of gaming and has few specialists that have a proven track record.
Third, the number of assets. A game like Pokemon Go has a considerable number of art assets because of the high number of characters.
Considering all these pivotal factors and many others, the range of creating a game like Pokemon Go would be somewhere between $400,000 and $500,000.
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