During late October, Pokémon GO reached a milestone in revenue generated as reported by Sensor Tower, reaching up to $1 billion in revenue for the year 2020, roughly 11% more than their highest annual revenue generated since its debut release in 2016. Faced with the 2020 pandemic and the lockdown/ social distancing procedures involved, it is quite a surprise that Pokemon GO – a game that is based on location-based interaction – has topped their record for annual revenue and still has a whole month to go till the year ends.
Their success could be attributed to the overall increase in downloads of mobile games due to consumer’s boredom from the lockdown. However, this alone could not be the sole reason for Niantic’s unpredicted success this year. Last year, according to the Sensor Tower Store Intelligence report, Pokémon GO had the best year in 2019 in terms of revenue, but this time, it is beaten by a huge margin.
Niantic’s tackling down of problems and subtle improvements
Niantic perfectly handles the situation by bringing the game to players’ instead of having them go out, tackling the issue of lockdowns and social distancing. As their incredibly attractive solution of providing incense involves micro-transactions, they manage to profit heavily. Then their original solution creates a problem- the shortage of pokeballs. They once provide another solution that involved micro-transactions– purchasing pokeballs. By taking the issue, creating demand, and deriving another demand from it, Niantic breaks all expectations for Pokemon GO and manages to increase the quantity transacted of Pokecoins, thus making this their best year yet in terms of revenue.
Another less significant but notable reason could be due to the strong travel urge built up within people during their lockdowns. As lockdowns- specifically in the US and in May- were raised, many bored citizens could finally express their suppressed desires to physically travel and explore, leading to an increase in people hiking, exploring the cities, and visiting others. As Pokemon GO’s premise surrounds interacting with physical locations and pokemon that spawn at different physical locations, the game is a favorite for anyone who likes to walk around outdoors, be it to spice up your shopping experience or to add innovation to your hiking trip.
With the large demand for travel, it is likely that people may want to download Pokemon GO and implement it into their travels, thus illustrating that the demand for Pokemon GO one that was derived from the spike in the demand to travel due to the raises of lockdowns.
Incredible marketing strategy from the Pokémon GO team
The largest reason why Pokemon GO managed to blow up their revenue during the troubling year of 2020 was because of their incredible marketing strategy. Due to the pandemic, many players be they new or old have been required to stay at home, thus disabling the premise of the game- the change in a physical location. Niantic responded by bringing the game to players’ homes by selling 30 incenses ( items that lure pokemon to spawn near you ) at the low price of 1 Pokecoin, thus attracting many players to invest in the game and purchase Pokecoins.
This caused an overly successful lure of Pokemon for players as the issue that was at hand was that players were running out of pokeballs to catch pokemon. To tackle this issue, Niantic increased their output of pokeballs by increasing the number of pokeballs received from gifts, then increasing the limit of gifts that can be opened in a day. Next, they offered 100 pokeballs to be bought at 1 Pokecoin, once again attracting more players to invest in Pokecoins. To help players cope with the massive influx of pokeballs they could receive, they also increased the maximum amount of pokeballs you can carry in your inventory to 20.
Final thoughts
Breaking all expectations and making the best out of their situation, Pokémon GO earning $1 billion in revenue in 2020 is a perfect example that game developers should look up to when dealing with adversity due to their strategic marketing, revenue growing and resilience in these trying times. In the face of adversity and a situation where they should have failed, they managed to succeed and further reach new heights.
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