On summer vacation, four of us were sitting in a truck at 10:45 p.m., parked in a parking lot at a high school in Yorkton, collecting Pokémon. Beside us, four other cars and trucks, idled, with air conditioners running and doors closed to keep out the man-eating mosquitos.
The evening before, my wife, Michelle, and I had parked near the Yorkton Courthouse, where there were at least 15 other vehicles parked around 9 p.m., with a few people wandering in circles giving blood to the god of mosquitoes. We had to stock up on pokéballs for son Spencer, who is the true Pokémon addict. Never mind that we swung through pokéstops in Lampman (three on its Main Street), and Arcola (two on its Main Street) on the way to Yorkton.
All of this was for Spencer’s benefit, of course, so his standing in the game improved.
The Pokémon Go craze is everywhere. It is ubiquitous, addictive, and crazy like a fox. It must be making enormous piles of money. And this is where the lessons in economics come in.
First of all, a bit of an explainer. Pokémon has been around for about two decades. It’s had computer games, trading cards, and now, one of the biggest phenomena of the mobile gaming age. Its premise is relatively simple: the world is populated with “pocket monsters,” a.k.a. Pokémon, and you want to catch ‘em all. You then use these Pokémon to do battle with each other, at places called gyms, for supremacy of something or other.
It’s a “free game to play,” in that it doesn’t cost anything to download or run the app on your smartphone. But it is insidious as the game goes on. At first they make it easy – you go to places called pokéstops and pick up additional ammunition called pokéballs, potions, revives and eggs. These are usually playgrounds, parks, murals or churches. In working with Google Maps, they apparently have mapped a large portion of the world, including small town Saskatchewan. While travelling down everyday streets your phone buzzes and you encounter another Pokémon in the wild. I’ve found they are usually about every block or so, and often at intersections. When one shows up on your screen, you throw your pokéballs at it to catch it.
But as you advance in the game, it becomes much harder to snag one, as they escape. Plus, your pokéstop visits result in you receiving far less ammunition and more items of other varieties. Eventually you will run low on ammunition.
In the game, there is a shop function. Here you can buy more pokéballs, lures, eggs, etc. But to buy them, you need pokécoins. You can earn pokécoins by conquering gyms, but that’s really hard. So it is much easier to buy pokécoins, WITH REAL MONEY. And they’re not cheap. You can find yourself dropping $13.99 for 1,200 pokécoins which will buy you 200 pokéballs at a cost of 800 pokécoins. Nothing is in round numbers to match conveniently, meaning you’re probably going to make multiple purchases. The price structure and fake currency for real currency are additional layers to disguise the fact you are spending very real money on imaginary balls to throw at imaginary monsters in augmented reality.
You can even get 14,500 pokécoins for $139.99. If you use an iPhone, Apple takes a 30 per cent cut on all transactions. Buy stock in Apple.
In places where there is a high concentration of landmarks (e.g. pokéstops) in close proximity, you can find people congregating, often in idling vehicles to keep the air conditioning going. The use of lures (think a worm on a fishhook) draws in more Pokémon. These lures cost 100 pokécoins, or $1.39, and last for only 30 minutes.
That’s how the creators of Pokémon Go make money. But there are a lot of other segments of the economy making money, too. Much of the press in the first few weeks was about people walking around to catch Pokémon, but the canny people soon realized that it is much more efficient using a vehicle, with the player in the passenger seat while the driver goes slowly so the game’s motion detection still counts the motion as walking or biking. (Driving at high speeds doesn’t count, and Pokémon don’t show up either.)
The enormous volume of data the game uses is surely making the cellular carriers smile from ear to ear. Buy stock in them, too.
Globally, the consumption of gasoline to support Pokémon habits must be huge. I don’t see a lot of people walking for Pokémon these days, but I can pick out a driver in a heartbeat.
The drop in productivity for businesses has got to be large enough to start registering on national GDP calculations. I spoke to someone the other day who mentioned at least one of the PhD’s working for him was hooked on the game.
For Spencer, he’s learning how different items have different values, and different actions unlock those values. It’s basic economics in a game that’s making big money.
Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net
