Pokémon GO! Hits a New User Spending High at $8B
In this new piece, we're exploring the dynamics of the AR games market, Niantic’s approach to making hit games there, and the drivers behind Pokemon’s Go continuous success.
— by Diana Levintova
Pokémon GO! has surpassed $8B in user spending, thus reaching a new milestone in the history of Niantic. On the market for over 8 years, the game continues to deliver large revenue streams to its publisher.
Disclaimer: To calculate user spending, we have revised the revenue metric displayed on the app’s page by adding back store fees and inclusive taxes that stores in some countries have to settle before making their payment to a publisher.
To confirm it, let’s look at the 2023 numbers: the game’s net revenue was equal to $567M (13% less than in 2022). While the title was unable to repeat its two most outstanding monthly revenue peaks of $136M (August 2016) and $117M (August 2020), it is still keeping its numbers high with earnings of $44M in March 2024.
Why Is Pokémon GO! Trending 8 Years Later?
While the statements about evolution and the novelty of added features and updates of the game won't bring a lot of operational insights, let’s try to discover the physiological aspects that have kept the players engaged all this time.
- Nostalgia. The game reaches out to the happy memories from our childhood where we would be playing our Gameboys or watching the original Pokémon TV series… and life would be so carefree.
- Sense of belonging. For people that lack social interaction, Pokémon GO! creates a sense of community, allowing them to meet new friends at PokéStops or while putting together groups for battles.
- Breadcrumbs effect. Catching a pokémon at a PokéStop on the way home, say, from work or college, a player notices another location right nearby. What do they do? They go, “Ah, a couple hundred more yards won’t hurt.” And then, a few days and PokéStops later, they’re hooked.
- Hoarding instincts. Collecting things allows us to experience a sense of accomplishment or goal attainment, and one that is way easier to achieve than, say, pursuing a successful career or excelling at studies. In the best sense possible, people like things that come easy.
- Collective advantage. Pokémon GO! not only allows establishing a pastime routine or creating friend groups, but it also notably helps small (and not-so-small) businesses businesses") improve their performance, thus adding a collective benefit touch to it.
Niantic’s Strategy
Now, let’s do a little digging into Niantic’s portfolio. The company has 19 mobile apps published and has been especially active since 2021. Out of those 19 apps, only 12 are games, with only the further three of them that can be labeled successful: Pokémon GO!, Monster Hunter Now, and Pikmin Bloom. Monster Hunter Now came out in August 2023 and has already generated $164M in gross revenue. Pikmin Bloom is somewhat behind on the metrics with its release in October 2021 and the $44M over lifetime. These three and all of the games in Niantic’s portfolio are, of course, AR/Location titles.
In general, looking at the AR and AR Location-based games, we see that no one has been able to beat Pokémon GO!’s success. Dragon Quest Walk (ドラゴンクエストウォーク) by Square Enix was, at some point, a contender for replicating Niantic’s success; as of today, however, it is earning just around a third of Pokémon GO!’s income. However, we cannot ignore the fact here that Dragon Quest Walk is only available in Japan.
The top third title is yet another brainchild of Niantic’s that we have already mentioned: Monster Hunter Now. And the final game to highlight is Jurassic World Alive that, while released far back in 2018 and not displaying any notable peaks since, was able to generate a total of almost $180M in gross revenue up to date. All other players of the submarket are coming in far behind.
AR Games Market Dynamics
Overall, the AR games market can be estimated at almost $12B gross revenue. As for its trends, it has been stalling for the last couple years, hovering around the $1.5B mark for the gross revenue per year.
Amongst other things, the segment is very reluctant to accept new players: there have been over 100 new releases since April 2022, and only a very special few managed to secure any significant income. In fact, there are only two worth acknowledging: the now familiar Monster Hunter Now with its gross earnings of $164M and Nobunaga's Ambition (信長の野望 出陣)") with its $21M made entirely in Japan.
Conclusion
Our studious analysis demonstrates that, despite its more than 8 years on the market, Niantic’s Pokémon GO! is as alive as ever due to the publisher’s efforts with continuous game development and improvements—as well as thanks to the game’s unique social and physiological effects that keep users coming back for more.
As of the Pokémon GO!’s market, where the game is continuing to lead by a huge mile, it has been stagnating over the past several years; even with a bunch of new releases, not that many of them have reached the metrics that we can confidently describe as successful. Niantic themselves, admittedly, were only able to hit the lucky spot 1 out of 10 times. Well, we guess the mystery of the AR games market remains unsolved!