Dive Brief:

• Pokemon Go developer Niantic Labs is planning to allow businesses to sponsor locations for certain in-game activities, according to the Financial Times.

• Along with in-app purchases by players in Pokemon Go, “there is a second component to our business model at Niantic, which is this concept of sponsored locations,” Niantic’s CEO John Hanke told the Financial Times.

• Although Hanke didn’t say whether any such sponsorship deals had been made yet, several adept techies have discovered evidence in Pokemon Go's code that McDonald’s has forged such a partnership. 

Dive Insight:

Pokemon Go is the most-downloaded app in the Apple App Store since its release last week, even though it’s only available in the U.S., UK and Australia. The game, developed by both Niantic and Nintendo, caused Nintendo's stock to soar more than 50% this week and has surpassed popular dating app Tinder in users. 

Along with creating a frenzy with users, the game, which prompts people to walk around and “collect” monsters via their phones in real locations, has sent advertisers scrambling for strategies to capitalize on its popularity. 

Niantic previously monetized portals on Pokemon Go’s precursor game, a sci-fi app dubbed Ingress. If Niantic follows this strategy, retailers and other businesses would be able to buy Pokestops (locations where players go to stock up on pokeballs and find Pokemon) or Pokegyms (locations where players battle other Pokemon) to lure players to their locations. So far these portals are now largely geo-located at sites like parks and museums.

The augmented-reality Pokemon have already been spotted in various of retail stores, prompting some retailers to seize on the phenomenon and others to ban players.

Retailers can already participate in the game by purchasing a Lure Module through the app that brings monsters to a Pokestop for 30 minutes—and presumably customers after those monsters. According to the New York Post, a New York pizzeria saw business rise 75% after it dropped a lure in the game for $10. Other restaurants are advertising that their locations happen to be Pokestops and Pokemon Gyms.

Forbes game reviewer Jason Evangelho said this week that retailers shouldn’t be so quick to shun players searching their aisles for Pokemon, because welcoming them could garner stores all manner of benefits. The app also offers malls and retailers, many of which are struggling due to competition from e-commerce and falling foot traffic, a glimpse at how technology could help them attract customers. As malls continue to mix up their offerings, providing a better selection of tenants and events, adding augmented reality games for customers could also draw in the crowds.