In the way-back times of the 1990s, a new craze swept the world in the form of a Nintendo Game Boy game called Pokémon. The premise of the game is incredibly simple. Capture monsters, train them and pit them against other monsters. What made the game so popular was that simplicity combined with the social aspect. Not only could a player duel against computerized opponents in single player mode, but also link two handheld consoles together and battle friends.
Though the franchise continues, the ubiquity of cellphones has put a significant dampener on the handheld game market. It’s hard to convince adults to shell out $100 or more on a dedicated portable games device when the cell phone can handle most of those duties. It’s somewhat surprising that it took Nintendo and others this long to put the two together and make Pokemon Go, a mobile iteration of the classic premise.
The combination of nostalgia and convenience has flung the app to the top of the download list, surpassing previous mobile champion Flappy Bird for number of downloads in a day. 21 million people around the world are playing the game, and quite a few of them are paying for the privilege. The app is free, but uses microtransactions as a form of revenue generation. Players can buy power ups in the game for a few dollars.
There’s nothing micro about the way these transactions add up, though, as purchases in the app accounted for nearly half of the total mobile marketplace transactions on its release day. People were spending about as much money on Pokemon as they were on every single other app in existence.
One of the surprising companies cashing in on this lightning success is Apple. The company takes in about a third of all the in-app purchases, which analysts expect to be around $3 billion over the next year or two. This shocking win highlights one of the undervalued components of Apple as a stock. They represent the biggest marketplace for online app distribution, and control access to iPhone users, who tend to be bigger spenders in mobile apps and devices.
It’s unclear at this time if Pokemon Go will have any kind of lasting success beyond an immediate buzz. Apple is well-positioned either way. Because the infrastructure for app distribution is a fixed cost for the company, any success is success enough for Apple. They remain one of the behemoths of the mobile marketplace, a sector that looks to continue strong growth in the future.