How Profitable is Pokémon Go?
The Pokémon Go app is said to be the biggest game app in US history, crushing records with app revenue double the industry average. But does it keep on getting better from there? Pokémon Go actually made $35 million in its first two weeks! Therefore, it seems like there is no stopping the Pokémon Go phenomenon but is the app here to stay or is it just another hype?
App Revenue and Key Performance Metrics
Acquisition
- 4-5 million app installs a day
- In the US alone, the app was downloaded more than 7.5 million times from both the Google Play store and iOS App Store.
- Just two days after its release, Pokémon Go was installed on 5.16% of all Android devices in the US.
Engagement
- On July 14, 2016, the app reached 26 million active users for both Android and iOS and as of July 18, 2016, it dropped to about 21 million active users.
- As of July 8, 2016, average time in app (for Android) is 43 minutes and 23 seconds, considerably higher than social apps like WhatsApp (00:30:27), Instagram (00:25:16), Snapchat (00:22:53) and Messenger (00:12:44).
Retention
- The app’s retention rate is double the industry average with about 7 out of 10 downloaders returning to the app the next day.
- On its first week, about 60% of downloaders from the US use it daily.
Monetization
- The app’s revenue is also double that of the average for casual games. Casual games average revenue per daily active user (ARPDAU) is only $0.10 while Pokémon Go reached $0.25 ARPDAU.
- As of July 11, 2016, Pokémon Go is earning $1.6 million (for the iOS app only) a day.
- Pokémon Go’s paid users are ten times that of Candy Crush’s.
Positive Contributors in Making Pokémon Go Stick
- Pokémon had been around for a decade – it’s not just a hype, it’s a cultural phenomenon. The app is just a new approach in targeting an established market. As long as there are Pokémon fans, the app will thrive.
- There’s much room for expansion. Pokémon Go can expand its content offerings relative to the Pokémon franchise. Right now, the app only features the original 150 Pokémons but there are about 570 other Pokémon as of Pokémon X/Y’s release and more to come with the release of Pokémon Sun and Moon.
- The app also has great monetization opportunities. This starts with the very premise of the game. The user either needs to spend a lot of time on the game to progress or purchase in-app items to bypass the process. Therefore, the app depends on the number of users and not on whales for effective monetization.
The massive success of Pokémon Go undeniably contributed to the boost in Nintendo shares (up to 24.52%). But an analyst believes that in order to contribute real impact to Nintendo’s profits, the app should earn a minimum of $140-196 million every month consistently.
