Nintendo began as a card game maker in 1889. Although it has evolved during the last 125 years, the latest Pokémon Go craze might just prove to be both the biggest opportunity and challenge yet for the company.
Some observers are cynical about Pokémon Go, but in the immortal words of the Quad City DJ’s, “Please don’t knock it, until you ride it”.
After all, the numbers speak for themselves.
Since launching last month, Pokémon Go has already become the biggest mobile game in U.S. history. With more than 21 million daily active users, generating $2 million per day of in-game purchases, the stock price for Nintendo has increased 120% and added $23 billion in market cap.
Yet, Nintendo’s transformation into the mobile game space is far from complete or guaranteed.
According to The New York Times, “Nintendo’s drive has helped the Kyoto-based company produce some of the world’s most beloved games and play a major role in creating the modern global video game industry. Yet that same stubbornness and perfectionism led to missed opportunities. It skipped smartphones and app stores and dismissed partnering with other companies with potentially better ideas.”
As a result, after several years without a hit, while video game players started playing on mobile phones instead of consoles, Nintendo was forced to partner with Niantic Labs, a former Google company to launch Pokémon Go.
The NYT article continued, “It’s quite a big change,” said Serkan Toto, a game industry consultant in Tokyo. If Niantic had pitched Pokémon Go two years earlier, he said, “Nintendo wouldn’t have just said no, they wouldn’t even have listened.”
A recent Fast Company article paints an even starker picture of the challenges ahead, “Here’s a fact that many analysts have glossed over: Nintendo didn’t make Pokémon Go (Niantic Labs) … As for publishing, those honors go to the Pokémon Company, which markets and licenses the franchise … Nintendo’s vague involvement in Pokémon Go isn’t a magic shortcut.”
Even when you add $23 billion in market cap in just two weeks, a feat that publicly traded radio groups would be fortunate to emulate, there is no such thing as a magic bullet. In fact the mobile game space is mostly one hit wonders for the developers including Angry Birds, Candy Crush and Draw Something, which has Nintendo further considering if they want to be the masters of their own destiny in mobile gaming or make huge profits licensing their characters such as Super Mario to others.
Not a simple question for an organization that views itself as “a company of Kyoto craftsman.”
Key Insights for Radio
Regardless of Nintendo’s future mobile direction, Pokémon Go has leveraged several recognizable characteristics to become a cultural phenomenon: Engagement, Retention, Virality, and Monetization.
These are lessons from the game that stations can strategically consider.
According to Tech Crunch, Pokémon Go, “offers a quick ramp up that teases a lot of front-loaded rewards to get the player to come through the door and shut it behind them. That’s important to grab their attention, but there are also multiple layers of rewards that keep players wanting to stay in the game … There are different layers of currency built into the game that progress along different time curves, giving each layer of progression its own speed and flavor.”
In the same way, the relationship each P1 and P2 has with your station is not only unique, but each person is at a different point in their journey, not just with your station, but in their own lives.
When your core demo is 25-54, that represents people experiencing multiple life stages: before kids/early in their career, with kids/advancing their career and as an empty nester/with retirement coming into focus.
The value proposition of your station with these subsets of your core demo are going to vary.
Fortunately, we are no longer broadcasting to anonymous cume. We have the tools to build relationships and get to know your Super-Fans by name; while generating engagement, which keeps them coming back.
Right now, Pokémon Go is rapidly finding its way onto new devices at a rate of 4 to 5 million installs per day, but this pace won’t continue. The typical mobile game sees an attrition rate of 70% of its users after the first day. Meaning that 7 out of 10 who install it, never come back. For Pokémon Go, the tables are flipped and the game is seeing 70% of users return after the first day.
The ability to get more occasions from existing users will define the ultimate success of Pokémon Go.
Same with radio. Heavy listeners turn on the radio just 31 times per week. Your ability to win more of these occasions is critical to your ongoing success. A lot of time and effort goes into extending TSL, but it all begins with your brand being top of mind, as they seek out audio content on the infinite dial (playlist, podcast, Pandora or your station).
As this game design gets people off the couch and into the world, people are seeing people play and hearing people talk about it, which gets them to download the app and start playing it too. As reported in Tech Crunch, “A lot of people consider it to be an augmented-reality experience, and in many ways you could consider it to be that. But it’s not just an experience that uses your camera to play — it’s an experience that crosses the boundary between an imaginary universe and the real world.”
This concept isn’t new. Radio calls crossing the boundary between imagination and reality, “Theater of the Mind.” Just like Pokémon Go, radio’s ability to take the audience in and out of both worlds is a key reason why people seek us out.
In fact, we’ve long been creating content that gets people talking around the “office water cooler.” Now we have the opportunity to identify these Amplifiers by name and leverage them to bring more people to the station. Across markets and formats, 75% of the people who engage with the station after being invited by a friend are brand new to the station.
In Pokémon Go, the best features aren’t gated behind a paywall. As a result, “Players don’t feel compelled to spend money, and instead they’re offered a delightful experience when they elect to spend money.”
In a similar way, Facebook regularly surveys users on the types of ads they specifically want to see, because FB understands that ads impact user engagement and retention.
Not only is Facebook delivering relevant organic content to individual users, but undesirable ads will cost more to serve, if they get seen at all. Delightful experiences and relevant ads are the standard on mobile. When the device is with you 24/7 and you check it 150 times per day, apps that serve irrelevant content (paid or organic) won’t last.
Compare both of these monetization strategies with the knowledge many stations have that their spot load is too high without even factoring in whether the individual ads are relevant and engaging to the user. Streaming with all of the PSA’s creates an even bigger issue of providing relevant and engaging paid content. The overall streaming experience is problematic and part of the reason that it adds so little to overall listening.
Yet there are great ways to offer deals and experiences that money can’t buy to your Super-Fans. We call it Privileged Access and along with bringing in additional revenue from your best advertisers, it deepens the connection between Super-Fans and the station.
Radio is no longer being judged on smart phones by what the competition is doing up and down the dial. Your listeners are comparing their experience with you to their favorite digital brands including Netflix, ESPN, Amazon, Facebook and Pandora.
For more information on Privileged Access, which connects your best advertisers with your Super-Fans, contact us today.
– Andrew Curran, President and COO, DMR/Interactive