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Why Pokemon Go's Business Model is so successful?

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Pokemon Go’s Company Overview


Pokémon Go, developed by Niantic, Inc. in collaboration with The Pokémon Company, represents a groundbreaking entry in the augmented reality (AR) gaming industry. Launched in 2016, Pokémon Go quickly captivated millions by blending the beloved world of Pokémon with real-world exploration. The game encourages players to explore their surroundings to find and capture virtual creatures known as Pokémon, offering a deeply immersive experience that promotes both physical activity and social interaction. The mission of Pokémon Go is to motivate people to discover new places, engage with one another, and embrace a healthier lifestyle, all while enjoying the timeless magic of the Pokémon universe.

The business model of Pokémon Go is unique in its utilization of AR technology combined with a geolocation-based gameplay mechanic. This model not only differentiates Pokémon Go in the competitive gaming market but also fosters a more engaging user experience by linking the virtual world with the real world. Players are enticed to venture outdoors and collaborate with other users to complete in-game challenges and participate in events, thereby forming a robust and active community. The game continually evolves through frequent updates, seasonal events, and new releases of Pokémon species, ensuring that players remain engaged and invested over the long term.

The revenue model of Pokémon Go primarily revolves around in-app purchases and sponsored locations. Players can buy PokéCoins, the game's currency, which can be used to acquire items such as Poké Balls, Incense, and other in-game enhancements. Additionally, the game features special events and Community Days that sometimes offer exclusive items and bonuses for a fee. Sponsored locations, where businesses can sponsor PokéStops or Gyms, provide another significant revenue stream, offering companies a unique way to drive foot traffic through in-game incentives. This multifaceted approach ensures that Pokémon Go remains a financially viable enterprise, capable of sustaining continuous development and worldwide player engagement.

https://www.pokemongo.com/

Headquater: Tokyo, Japan, Eastern Asia

Foundations date: 1998

Company Type: Private

Sector: Information & Media

Category: Software

Digital Maturity: Digirati


Pokemon Go’s Related Competitors



Pokemon Go’s Business Model Canvas


Pokemon Go’s Key Partners
  • Nintendo
  • Niantic
  • The Pokémon Company
  • Apple App Store
  • Google Play Store
  • Local Governments
  • Tourism Boards
  • Cellular Carriers
  • In-Game Advertising Partners
  • Content Creators and Influencers
Pokemon Go’s Key Activities
  • Developing and maintaining the AR platform
  • Adding new features and events
  • Collaborating with third-party brands and partners
  • Conducting marketing and promotions
  • Community engagement and support
  • Data analysis and user feedback integration
  • Organizing live events and tournaments
  • Ensuring game security and fair play
  • Maintaining and expanding geographical coverage
  • Updating and balancing in-game content
  • Collaboration with Pokémon brand owners and licensors
Pokemon Go’s Key Resources
  • Niantic's augmented reality expertise
  • Licensed Pokémon intellectual property
  • Server infrastructure
  • Mobile application development team
  • Data analytics team
  • Strategic partnerships with local businesses and events
  • Marketing and community engagement teams
  • Global network of PokéStops and Gyms
  • Continuous content development and updates
  • Legal and compliance team
Pokemon Go’s Value Propositions
  • Augmented reality gaming experience
  • Discover and capture Pokémon in the real world
  • Social interaction and community engagement
  • Regular updates and new features
  • Free-to-play with in-app purchases
  • Fitness and outdoor exploration encouragement
  • Nostalgia for Pokémon fans
  • Special events and promotions
  • Team collaboration and competition
  • Local business partnerships for rewards and incentives
Pokemon Go’s Customer Relationships
  • Gamification features
  • Regular updates and new releases
  • Social media engagement
  • In-app community features
  • Customer support
  • Special events and competitions
  • Email newsletters
Pokemon Go’s Customer Segments
  • Mobile gamers
  • Adventure seekers
  • Fitness enthusiasts
  • Collectors
  • Social gamers
  • Millennials
  • Gen Z
  • Tech-savvy parents
  • Urban dwellers
  • Casual gamers
Pokemon Go’s Channels
  • Mobile App
  • Official Website
  • Social Media Platforms
  • In-game Notifications
  • Email Newsletters
  • Community Events
  • Online Advertising
  • Retail Partnerships
  • Influencer Collaborations
  • Merchandise Stores
Pokemon Go’s Cost Structure
  • Server maintenance and hosting
  • App development and updates
  • Marketing and advertising
  • Event organization
  • Customer support
  • Licensing fees
  • Research and development
  • Partnerships and collaborations
  • Data security and privacy management
  • Merchandising production and distribution
  • Game design and testing
  • Legal and compliance fees
  • Employee salaries and benefits
Pokemon Go’s Revenue Streams
  • In-app purchases
  • Sponsorships
  • Licensing deals
  • Event ticket sales
  • Merchandise sales
  • Special promotions
  • Partnerships
  • Advertising

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Pokemon Go’s Revenue Model


Pokemon Go makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Aikido
  • Blue ocean strategy
  • Advertising
  • Sponsorship
  • Location-based advertising
  • Experience
  • Pay as you go
  • Credits
  • Discount club
  • Freemium
  • Two-sided market
  • Franchising
  • Selling of branded merchandise
  • Licensing
  • Technology trends
  • Tradeable currency
  • Take the wheel
  • Tag management
  • Self-service
  • Online to Offline O2O
  • Mobile first behavior
  • Ingredient branding
  • Digitization
  • Product innovation
  • Corporate innovation
  • Crowdsourcing
  • Customer data
  • Augmenting products to generate data
Analytics


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Pokemon Go’s Case Study


Pokemon Go's Case Study: Blending Reality and Virtual Success


Without a doubt, Pokemon Go stands as one of the most innovative and disruptive entries in the gaming industry in recent years. Launched in 2016 by Niantic, Inc. in collaboration with The Pokemon Company, this augmented reality (AR) game from the beloved Pokemon franchise created a global phenomenon, redefining how we think about mobile gaming. It capitalized on the advent of AR and geolocation technologies, merging the virtual and physical worlds in a way we've never seen before.

The Genesis of Pokemon Go


The idea behind Pokemon Go was nothing short of revolutionary. The goal was to bring the magical world of Pokemon to our real-world environment, thereby encouraging players to explore their surroundings to find and capture virtual creatures known as Pokemon. The underlying mission aligns perfectly with societal needs today: motivating people to discover new places, engage with one another, and embrace a healthier lifestyle.
From the outset, Pokemon Go was poised to be a game-changer. It went beyond conventional gaming to promote physical activity, social interaction, and community engagement. According to a survey by the British Journal of Sports Medicine (2017), players walked an average of 2,000 additional steps per day during the first weeks of game play. This impressive statistic showcases Pokemon Go's potential impact on physical health.

Enhanced User Engagement Through AR and Physical Exploration


The concept of AR technology meeting geolocation-based gameplay proved to be a masterstroke. Unlike traditional games confined to screens, Pokemon Go enticed players to take to the streets, parks, and cities in search of virtual Pokemon. This made the user experience deeply immersive and continuously thrilling.
Frequent updates, seasonal events, and new Pokemon releases maintain user engagement and loyalty. According to Niantic, as of 2020, the game had over 166 million active monthly users. This is a testament to its successful strategy of constantly evolving gameplay and content.

Innovative Revenue Model: In-App Purchases and Sponsored Locations


One of Pokemon Go's standout aspects is its multi-faceted revenue model, which primarily revolves around in-app purchases and sponsored locations. Players can purchase PokéCoins, which can be used to acquire items like Poké Balls and Incense. Additionally, the game frequently offers special events and Community Days, occasionally featuring exclusive items for a fee.
But what sets Pokemon Go apart from other freemium games is its unique approach to sponsorship. Businesses can sponsor in-game locations, turning them into PokéStops or Gyms. This model not only drives foot traffic to real-world locations but also adds a layer of commercial value to the gameplay. Starbucks, Sprint, and McDonald's are among the notable brands that have inked deals, transforming their stores into hotspots for Pokemon Go players. This clever integration of advertising and real-world engagement makes the game's business model highly lucrative. According to Statista, Pokemon Go generated over $1 billion in 2020 alone.

Impact on Local Businesses and Tourism


Pokemon Go's influence extends beyond individual players—local businesses and tourism boards have also reaped significant benefits. Numerous reports indicate that areas with high concentrations of PokéStops and Gyms have witnessed increased foot traffic and economic activity. Amid the initial craze in 2016, small businesses reported a 75% increase in foot traffic and a 50% boost in sales, as stated by Lifelike Consulting.

Data-Driven Evolution and Customization


Niantic leverages vast amounts of player data to continually improve and customize the gaming experience. Machine learning algorithms analyze player behavior, preferences, and locations to introduce targeted features, enhance game balance, and mitigate issues. This data-centric approach ensures that Pokemon Go remains relevant and compelling, sustaining its appeal across different demographics and regions.

Expert Opinions on Pokemon Go's Success


Pokemon Go's breakthrough and sustained success have been subjects of extensive analysis by industry experts. According to Dr. John Hanke, CEO of Niantic, "the fusion of AR technology with geolocation not only redefined mobile gaming but also community interaction and physical exploration. Our vision was to make the real world a place of discovery and adventure, and Pokemon Go achieved that."
Professor Karl D. Schreiber, a digital marketing expert from Harvard Business School, notes, "Pokemon Go exemplifies the potential of AR technology when paired with a beloved brand. Their strategic use of location-based advertising and in-app purchases created a revenue model that is both profitable and unique."

Conclusion: More Than Just a Game


Pokemon Go is not just a game; it's a cultural phenomenon that has successfully leveraged AR technology, innovative revenue models, and data-driven strategies to create an engaging user experience that extends into the real world. By merging digital and physical realms, it has fostered social interaction, encouraged physical activity, and reinvigorated local businesses and tourism. As we continue to explore the possibilities of AR and other emerging technologies, the story of Pokemon Go offers invaluable lessons in innovation, user engagement, and sustainable revenue generation.
By understanding the elements that made Pokemon Go a remarkable success, we can glimpse into the future of digitally-integrated lifestyle experiences that resonate deeply with users and redefine industry standards.


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