Acquisition Project | Pokémon Go

Website: Pokémon Go

Introduction: Merging Worlds with Augmented Reality

Pokémon Go merges the digital and physical worlds. This AR game turns familiar locales into thrilling Pokémon habitats, inviting players to venture outdoors and discover Pokémon in their neighborhoods. It's a game that unites Pokémon enthusiasts and casual gamers, blending nostalgia with the latest technology. Pokémon Go redefines mobile gaming by transforming ordinary places into interactive playgrounds, enhancing physical activity, and fostering community among players.

Problem | Solution:

Screen Addiction and Sluddish Lifestyle

The Problem: Both adults and children are increasingly absorbed in their screens for entertainment. This shift towards virtual activities leads to less physical activity and outdoor interaction, causing a disconnection from real-world social engagement and exercise.

Research shows increasing rates of screen time among various age groups, correlating with a decrease in physical well-being and social interactions.- source

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The Solution:

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Encourages Physical Movement:

Unlike traditional mobile games, Pokémon Go requires players to walk, explore, and physically engage with their environment to progress in the game. This design cleverly integrates exercise into entertainment. Players are motivated to leave their homes, walk more, and even engage in physical activities they might normally avoid, thereby countering sedentary habits.

Promotes Exploration and Real-World Interaction:

Unlike traditional mobile games, Pokémon Go requires players to walk, explore, and physically engage with their environment to progress in the game. This design cleverly integrates exercise into entertainment. Players are motivated to leave their homes, walk more, and even engage in physical activities they might normally avoid, thereby countering sedentary habits.

Fosters Community Engagement and Socialization:

Through community events and group activities like raids and battles, Pokémon Go creates opportunities for players to meet, collaborate, and build relationships. This design fosters real-world social interactions, helping to build community ties and reduce the isolation often associated with excessive screen time.

Dynamic and Evolving Content:

The game frequently updates with new Pokémon, events, and challenges, keeping the content fresh and engaging. This approach retains the interest of players over time, catering to the need for evolving entertainment and continual engagement.

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Summary:

Pokémon Go solves this by tempting the players outdoors through its AR-driven gaming experience. This game converts local environments into vibrant Pokémon landscapes, requiring physical exploration for gameplay. It not only promotes outdoor activity but also fosters community spirit, as players encounter each other in their shared quest for Pokémon, rekindling the joy of outdoor exploration and real-world connections with the world around us.

Pokémon Go, developed and published by Niantic, is a prime example of a product that achieved both product-market fit and mature scaling .

High User Engagement: Pokémon Go quickly became known for its widespread popularity. Players were highly engaged, spending hours collecting Pokémon in real-world locations .

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Growth in User Base: The game saw a rapid increase in the number of users after its launch, tapping into both nostalgic older generations and new, younger audiences.

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Brand Recognition: Pokémon, already a well-established brand, helped in gaining immediate recognition. The innovative use of augmented reality (AR) technology in gaming further strengthen its place in the market.

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What has made Pokémon go viral?

This is such a gripping game for so many people, regardless of age, and here's why:

• Demographic timing: a collision of thirty-somethings from the Pokémon Genesis era (always ready to relive the glory days) with children at a perfect age for free mobile games.
• Newly mature technology: geo-fencing and map overlays have been around for a while under the hood, but this makes that plus AR readily accessible to the masses.

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As of March 29, 2024, it is still at the top of the chart in the virtual game store - source​

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Target Audience: Understanding Pokémon Go's Ideal Customer Profiles (ICP)

Ideal Customer Profiles (ICP)

ICP Examples

​The Social Gamer:

• Why the Preferences: These ICPs enjoy AR games with social features rooted in their desire for interactive and immersive experiences, they value the sense of community and connectedness, which is increasingly sought in the digital era. They're active on social media, favoring platforms like Instagram and TikTok, The preference for longer, narrative-rich content as noted in social media trends for 2024​. - source
• Prioritization: They're a top priority because they're very active online and can influence their friends and followers about what games to play.

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The Nostalgic Fan:

• Why the Preferences: These ICPs have an affinity for content with a nostalgic theme, aligning with a broader societal trend of seeking comfort in familiar experiences. They love things that remind them of their younger days, such as old-school games and themes, reveling in the joy and comfort of reliving the good old times. - source
• Prioritization: They're important because they're keen on products that bring back memories, but they might not have as big an impact on trends as the other two groups.

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The Tech Enthusiast:

• Why the Preferences: These ICPs are driven by a fascination with technological innovation and a desire to be at the forefront of new trends. Their interest in AR and AI technologies stems from a pursuit of cutting-edge experiences that push the boundaries of conventional gaming. Always on the lookout for the newest tech, especially AR and AI. They want gaming experiences that are not just fun but also use the latest technology. - source
• Prioritization: Super important for spreading the word about new tech. They're the ones who try new things first and can sway others into trying them too.

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In conclusion, while each ICP has its own unique characteristics and preferences, The Social Gamer and The Tech Enthusiast are likely to have a larger influence on market trends due to their active online presence and role as early adopters. The Nostalgic Fan, while important, may have a more niche impact due to their specific interests.

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Market Analysis: Gauging Pokémon Go's Reach and Potential

Total Addressable Market(TAM)

TAM for mobile gaming is approximately 3 billion players worldwide. This figure represents half of the world's population, estimated at 6.6 billion, signifying a massive potential market for mobile games.- source

Serviceable Addressable Market (SAM)

For Pokémon GO, an AR mobile game, the SAM is determined by the number of active AR device users. According to data, there are about 1.4 billion active AR user devices, which is 46% of the overall TAM. - source

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Serviceable Obtainable Market (SOM)

For Pokémon GO, this is represented by the actual number of players engaging with the game. As of the end of March 2024, the monthly average SOM for Pokémon GO is around 81 million players, while the daily average SOM stands at about 22 million as of March 29 2024 - source

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Now we can calculate the Total Addressable Market (TAM), Serviceable Addressable Market (SAM), and Serviceable Obtainable Market (SOM) for each Ideal Customer Profile (ICP) of Pokémon Go,

The Social Gamer

TAM (Total Addressable Market)

Assuming Social Gamers make up about 30% of this market .

3 billion x 30% = 900 million

SAM (Serviceable Addressable Market)

Assuming 40% of AR users are interested in social gaming.

1.4 billion x 40% = 560 million

SOM (Serviceable Obtainable Market)

Assuming 30% of Pokémon Go players are Social Gamers.

81 million x 30% = 24.3 million

2. The Nostalgic Fan

TAM

Assuming Nostalgic Fans constitute about 25% of the mobile gaming market.

3 billion x 25% = 750 million

SAM

Assuming 30% of AR users are Nostalgic Fans.

1.4 billion x 30% = 420 million

SOM

Assuming 25% of Pokémon Go players are Nostalgic Fans.

81 million x 25% = 20.25 million

3. The Tech Enthusiast

TAM

Assuming Tech Enthusiasts make up about 20% of the mobile gaming market.

3 billion x 20% = 600 million

SAM

Assuming 50% of AR users are Tech Enthusiasts .

1.4 billion x 50% = 700 million

SOM

Assuming 45% of Pokémon Go players are Tech Enthusiasts.

81 million x 45% = 36.45 million

Summary

• The Social Gamer: TAM = 900 million, SAM = 560 million, SOM = 24.3 million
• The Nostalgic Fan: TAM = 750 million, SAM = 420 million, SOM = 20.25 million
• The Tech Enthusiast: TAM = 600 million, SAM = 700 million, SOM = 36.45 million

These calculations give an idea of the potential market size for each customer profile in the context of Pokémon Go.

How Users Search for Pokémon Go Online

Google search volumes: Pokémon GO players frequently search for specific strategies to enhance their gameplay. Common searches include queries like "How to defeat [specific Pokémon]?” This trend indicates a strong interest in developing tactics for succeeding in battles within the game.

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There are many articles and blogs available that provide a variety of statistics on many different Pokémon, indicating the community's interest in understanding each Pokémon's unique attributes for strategic gameplay - source

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Google Trend shows a high interest in "AR games" and "RPG games," with Pokémon GO leading these categories, suggesting it's successfully tapping into the immersive and narrative-driven gaming experiences.

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Searching/ Watching on YouTube: Numerous content creators on YouTube focus on Pokémon GO, offering tips on catching rare Pokémon and Tips and Tricks on the app with a larger Viewer base, indicating the game's widespread popularity.

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CAC:LTV Ratio

CAC (Customer Acquisition Cost):Represents the cost incurred in acquiring new customers.

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LTV (Lifetime Value): LTV refers to the total value a player brings to the app over their entire lifetime.

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​AOV (Average Order Value): AOV represents the average value of in-app purchases made by players in a single transaction.

• Customer Acquisition Cost (CAC) for Pokémon Go:
• • Estimated at $10, considering the game's strong brand recognition and marketing strategies.
• Average Order Value (AOV):
• • Assumed to be $10 for Pokémon Go, based on the nature of its in-app purchases.
  • For instance, the 'Ultra Box' bundle in Pokémon Go is about $9.99.
  • Comparative in-app purchases in other games:
  • • Candy Crush: 'Set of Boosters' at around $2.99.
    • Clash Of Clans: 'Pile of Gems' for $9.99.
• Margin:
• • The profit margin per transaction in Pokémon Go is around 30%.
  • This covers costs such as server maintenance, development, and royalties.
• Frequency:
• • A typical Pokémon Go player might make in-app purchases about three times a month.
• Retention:
• • For Pokémon Go, the average retention period is assumed to be 1 year (12 months).

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Calculating LTV

• LTV = AOV x Margin% x Frequency x Retention
• LTV = $10 x 30% x 3 x 12 = $108 per user

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CAC:LTV Ratio

• CAC:LTV Ratio = CAC / LTV
• Ratio = $10/ $108 ≈ 0.09

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The 0.09 customer acquisition to lifetime value ratio indicates that for every dollar spent on acquiring customers, we earn over ten times that amount over the customer's lifecycle. This suggests that investing in paid advertising is cost-effective and likely to be highly profitable.

Marketing Strategy: Enhancing Pokémon Go's Visibility

The top Result for “Mobile AR Games” in Google Search is Pokémon GO but there are no Paid Ads under the Search

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Paid Ads Channels Prioritization

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Personalized Ad

Google Search

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Insta-Ad

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Budget Deployment (with a $100k total budget):

The budget strategy is mainly investing in Google App Campaigns and Facebook/Instagram Ads, due to their effectiveness in driving app installs. YouTube Ads are also a focus for showcasing our game's AR features. Additionally, we're testing emerging platforms like Snapchat, TikTok, and Twitter to connect with younger audiences and stay on top of trends.

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With a budget of $100k and CAC:LTV ratio of 0.09, we are positioned to generate $1 million in Lifetime Value. Since Customer Acquisition Cost (CAC) of $10, Pokémon Go can potentially acquire around 10,000 new users.

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Product Integration: Expanding Pokémon Go into Wearable Technology

Pokémon GO can be integrated into the Wearable Devices

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Integration of Pokémon GO with Fitbit, as an example:

1. Integration Discovery: Users open the Fitbit app and see a new feature announcement: "Connect with Pokémon GO".
2. Setup and Connection: They select the feature and are guided through a simple process to link their Pokémon GO account with Fitbit.
3. Data Sharing and Display: Once connected, Fitbit tracks and displays the user's walking distance and activity, directly contributing to in-game actions in Pokémon GO, like hatching eggs.
4. In-Game Rewards and Notifications: Fitbit sends notifications about in-game milestones achieved through physical activity, encouraging further engagement.
5. Gamification and Health Insights: The Fitbit app incorporates Pokémon GO-themed challenges and provides insights into how playing the game contributes to the user's fitness goals.

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