The Economics of Pokemon Go: The Beginnings of Success

Pokemon Go provides us with an incredibly refreshing experiment in thought because its effect is so unexpected. Over the next few weeks, I’m cataloging my thoughts on the game’s effect and posting every weekend. This is Part One.

BEGINNINGS OF SUCCESS

Pokemon Go just got a wide release in the United States this week and it has taken the mobile market by storm; topping the charts both in downloads and in-game purchases. But that’s not what I mean by success.

Pokemon Go is a GPS-based Augmented Reality mobile game where it uses your geographical location as a central game element in determining what Pokemon appear, and how to interact with other players.

While that’s a basic summary of what Pokemon Go is as an app right now, let’s settle what Pokemon Go is as a product in the dynamic digital markets. An opinion article at Droid Life claims that “Pokemon Go is a Total Disaster.” The writer points at some very prevalent technical issues, but it’s apparent that he doesn’t actually understand Pokemon Go for what it really is; a magnificent success.

Now what do I mean by that: I mean let’s look at how Start-Ups work.

One of the biggest rising philosophies in startups is the “Lean Method” (you can read about it everywhere online) and central to the method is what they call the “MVP” or “Minimally Viable Product.” Everyone’s talking about MVP. Basically it’s the smallest thing a company can throw out into the market place in order to test a single component about what they believe the market will respond to.

The flip-side of that would be throwing out a complex product in which you wouldn’t know what components led to the successes or failures of the product. For instance, let’s say Nintendo and Miitomo released an extremely complex version of Pokemon Go. If it fails or succeeds, they wouldn’t really know which components their audience liked or didn’t like; they would only know that the product as a whole had a general reaction.

Instead, what they’re doing right now is releasing this incredibly basic product (where all you can do is catch Generation 1 Pokemon by walking around, and then battle them at gyms) so that they can have a solid, market-verified basis for building their product further. If/when they add more game elements, like Pokemon trading, they can test out different versions in different markets; perhaps you can only trade with people in your immediate location so that they don’t have intercontinental markets forming which would devalue rare Pokemon. Or perhaps they’ll make a points-system where you can only trade depending on how much you’ve played. There could be hundreds of possibilities and the fact that the product is so basic right now is a sign that we’re going to see this game continue to grow.

And the fact that they’re having such an amazing reach means that they can learn how to improve their product much quicker. In the future, we’re going to see them try out different game engines and elements. We might see time-centered events like the bug-catching contest from Generation 2, or maybe a Team Rocket invasion — and on the technical side, perhaps they might have to alter the game slightly in order to help users save a little battery or to avoid crashing the servers repeatedly. All of that will need to get tested in the market and right now, the possibilities are endless. We’re seeing the most dynamic time for this franchise! Embrace it!