Dive Brief:
- Pokemon Go developer Niantic is set to accept more paid sponsorships from retailers and other companies that want their locations designated as "gyms" within the game to lure players into their businesses, the company indicated at this week's GamesBeat 2016 conference.
- McDonald's Japanese unit became the first paying Pokemon Go sponsor last month, and now has 3,000 restaurants there designated as “gyms” where players can collect virtual supplies for their onscreen battles.
- Pokemon Go has been downloaded more than 100 million times and generates more than $10 million each day in revenue, according to data from analytics company App Annie cited by Reuters.
Dive Insight:
It was only a matter of time before Niantic ramped up its paid sponsorship program. We still find it kind of amazing that Pokemon Go didn't go live with several paid sponsorship already in place: Prospective sponsors may have wanted to get a sense of the app's appeal before they dove in, or maybe Niantic just didn't want to have too much on its plate and too many different parties to satisy at launch.
Regardless of who decided to play wait-and-see, that decision should pay off handsomely for Niantic, which can charge much more now that Pokemon Go has surged past 100 million downloads. This will help balance Niantic's fortunes against the sometimes dicey proposition of relying solely on in-app purchasing for revenue, although it sounds like Niantic is doing just fine through that revenue channel, too.
The next challenge for Niantic as the paid sponsorships pile up is to make sure that these sponsorships don't evolve into a distraction within the game.
Meanwhile, sponsors—particularly retailers—will need to keep a close eye on how their campaigns perform. They also will need to gauge how inviting a throng of Pokemon Go players into their places of business might affect operations, including the impact on customers who have no interesting in playing the game and might not want to be bothered by a lot of Pokemon hunters walking right into them as they browse the aisles.
