Why PokemonGo is sitting on a $$ goldmine
Given the phenomenal popularity of PokemonGo, most of you have at least heard of it, if not more intimately involved with the game. The augmented reality game is more addictive than Tinder and Snapchat and enjoys a growth rate several times that of Twitter. It has higher daily usage time than Whatsapp, Instagram, Snapchat and Messenger. This was literally an overnight success after launch. I am mesmerized as much by the game as its potential to make insane amounts of money for Nintendo.
Great untapped business opportunity: CPC equivalent for brick and mortar
Nintendo and Niantic are making money hand over fist from Pokeman Go. Exact figures are unknown and are only speculative but Nintendo shares have only soared. The current business model is in-app purchases like virtual coins or Lure Modules that businesses are buying to attract more foot traffic. Here is a complete breakdown of the simple business model. For now most of the money is made only through in-App purchases. If tapped correctly, local brick and mortar businesses can be tapped for a lot more. It is clear that the game is already generating additional foot traffic for some businesses. When I was talking to the local bar owner near my house he said:
No one knew us last week and now customers keep stumbling in and we cannot keep up. — my local bar owner
Right now business owners cannot be a PokeStop easily. Money will start raining as soon as Nintendo / Niantic start three things:
- Start allowing local businesses to subscribe as a PokeStop so they can control if and how much they want to participate.
- Allowing them to target users demographically by attracting them with ways to get ahead in the game.
- Finally allowing local business to bid for user attention and businesses getting rewarded if they attract the relevant audience.
This will create a parallel to how web based advertising companies target users and make money. This is the holy grail for brick and mortar stores. Once businesses can subscribe to attract users, they can also start bidding for desired user demographics. Up till now businesses had no persuasive tools to attract users other than offer coupons, which works only if users are already in geo proximity of the business. But users are already seeking businesses offering them a way to get ahead in NintendoGo. This is what the brick and mortar stores should exploit to their advantage and attract target customers. These businesses will gladly pay Nintendo subscription for additional foot traffic.
For example: The local bar can be a PokeStop and target all players above 21 after 8 pm. Nintendo can charge a per foot print for each user who stops at the PokeStop and loads up the goodies.
This is equivalent of CPC on the web where Google made its money. There was no good equivalent in the real world … until now
Add bidding by local businesses to this and you have the perfect formula for targeted advertising and foot traffic which has largely not materialized in the real world.
Whether you love, hate or are apathetic to PokemanGo, and whether this craze will stay or is a passing fad, there is a great business opportunity in augmented reality games like PokemonGo. If not Nintendo, someone else will figure it out.
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