Welcome to the Pokéconomy: how businesses are riding the Pokémon craze

Businesses across the US are cashing in on the popular game thanks to crowds of players prowling the streets – and sponsored locations could be next

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The mobile game sensation Pokémon Go has altered the lives of the more than 20 million people who’ve downloaded it over the past week, but it has also affected the thousands of businesses that find themselves situated near one of the game’s many hotspots – both for good and ill.
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In tech-crazed San Francisco – where a scheduled Pokémon Go crawl is expected to draw nearly 6,000 players next week – local business owners couldn’t help noticing throngs of people in front of their establishments, huddled around their phones tossing Pokéballs around.

“I did my research,” said Rich, an imposing figure with a bullet-shaped head who minds the door at The Gold Club, a gentleman’s bar in the city’s south of market district. “They got 7 million more people signed up this week than last. The kids come by, they’re like 20 or 25, they just collect their points and move on. But I can see them bringing their dads along to come in for a drink.”

Diana Roman, an employee of Cafe Germain Creperies, just down the road from the Gold Club, thinks it would be a great idea to put a Pokémon character in front of her business to draw more customers. “Can you do that? Really? That would be awesome. I just started playing,” she said. “I’m on Level 4,” her colleague Priscilla Rico boasted.

The game works through a smartphone’s camera overlaying some 250 Pokémon characters into real-world settings. Players capture these creatures by throwing Pokéballs at them, which they collect at various interesting places such as historic landmarks or graffiti walls. Players slowly “level up” during the game until they reach the status of Pokémon trainer, where they can take a passel of captured creatures to a Pokégym (do keep up)and teach them how to fight. And they can also purchase objects to use inside the game, which is how Nintendo and its partners are making a reported $1.6m per day from the free download.

I can see the kids bringing their dads along to come in for a drink
Rich, The Gold Club gentleman’s bar
Pokémon Go is not the first augmented reality (AR) game to use real-world locations as its playing field. Its predecessor, Ingress, was created by the same company, former Google subsidiary Niantic. Pokémon Go and Ingress share the same user-generated location database, only in Ingress the hotspots are called “portals”, and there are no cute fuzzy Pokémon creatures to capture.

A handful of companies have purchased “sponsored locations” in Ingress, paying Niantic a few pennies for every player drawn to the site. In an interview with the Financial Times, CEO John Hanke said Niantic plans to pursue the same strategy with Pokémon Go, which is significantly more popular. He said companies will be able to pay to be featured in the virtual game because it will drive foot traffic.
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Lewis Ward, IDC’s research director for gaming, doesn’t expect Niantic to roll out sponsored locations for Pokémon Go any time soon. For the short term, he says, Niantic will concentrate on upgrading its infrastructure to handle the unexpected demand on its servers – which has caused some outages – as well as adding more locations, more things to buy in the app and new content.

“This is by far the most successful AR game ever,” says Ward. “It’s spawning changes in behaviour and opening up new possibilities for revenue that have never been tangible before. I’m sure companies not on Niantic’s map will want to opt in, while some who don’t want people snooping around their place of business may want to opt out.”

He also expects to see a rush of AR apps attempting to duplicate Pokémon Go’s surprising success. In the meantime, enterprising Pokémon-savvy businesses are finding their own workarounds.

The only problem is they’re taking all of the parking from real customers
Maria Kambatta, Beach Chalet restaurant
L’inizio Pizza Bar in Queens, New York, increased its walk-in business by 75% – and made national headlines in the process – by taking advantage of its location next to a Pokéstop. Restaurant manager Sean Benedetti purchased so-called “lure modules” (costing 80 cents to $1 a piece) inside the game and set them outside the restaurant. Each module lasts for 30 minutes, attracting creatures to them – as well as players who wish to capture them.

But not every small business owner is ready to embrace his or her inner Pokémon trainer. Maria Kambatta is a concierge at Beach Chalet, a restaurant and brewery in San Francisco’s Golden Gate Park. The restaurant has become a popular Pokéstop, with at least 250 people a day stopping by solely for the game over the last week.

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“We’re not complaining,” she said. “The only problem is they’re taking all of the parking from real customers … and now our customers are saying they have to go quite a distance to find parking. It’s unusual. It’s absolute because of Pokémon.” The huge crowds weren’t helping business, Kambatta added, because the Pokémon fans aren’t dining in. “They come in looking at their phones … They just go in and out.”

Giulio Tempesta is the proprietor of Umbria, an Italian restaurant in central San Francisco. He almost spits when the topic of Pokémon Go is brought up. “About a dozen people came by asking about it today,” he says. “I got 250 people in here for lunch, you think I have time to be interrupted by a bunch of kids asking me stupid questions? I think it’s time we got back to the concept of communicating with each other face to face, the way our parents did.”

Umbria’s bartender Ally Ramos – maybe a generation or two younger than Tempesta – thinks Pokémon Go is a great way to get kids to leave the house, meet up and talk to each other. She’s planning to create a special drink named after one of the Pokémon characters.

Sam Levin also contributed to this report.

 

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