Pokémon GO-maker Niantic says it has driven 500 million visitors to sponsored locations like McDonald’s Japan where gamers can score a special virtual good. But it never said how much those sponsors paid per visitor delivered by the game.
But in an interview published yesterday by Brazil’s Globo newspaper, Niantic VP of strategic partnerships Mathieu de Fayet said (translated), “The idea is to offer players items at certain locations, and partners pay $0.15 for each visitor attracted to the game. And we’ve already attracted 500 million visitors. In Japan [at the game’s peak last summer], each activated McDonald’s store attracted 2,000 visitors a day.”
However, we followed up with Niantic, and a spokesperson claimed that $0.15 number is incorrect, possibly due to a translation error. The company says “Niantic’s cost per visit (CPV) model visit has partners spending less than $.50 / daily unique visit to sponsored locations.”
At $0.15 per visit the math would indicate that the sponsorships could have racked up $75 million in revenue for Niantic, while the high bound of $0.50 would have generated $250 million.
Given that McDonald’s Japan activated 3,000 stores in the country, that price would mean that at the game’s peak, the fast-food giant would have paid out roughly $900,000 per day to Niantic for the Pokémon GO sponsorship at $0.15 per visitor, or $3 million per day at $0.50 each.
The sponsorships turn these locations into Pokémon GO “gyms” that players can win for their team through virtual battle, and “PokéStops” where they can gather eggs and Poké Balls to capture more pocket monsters.
Pokémon GO has since signed on Sprint and 7,800 Starbucks locations as sponsors in the U.S., both of which are hoping to boost in-store foot traffic from the teen and young adult demographics addicted to the augmented reality game.
Only a fraction of the cash trickles down to Nintendo. Niantic pays a licensing fee to the Pokémon Company, in which Nintendo owns a 32 percent voting stake.
But if the deals prove successful for the sponsors, they could forge a path for other apps looking to monetize by delivering foot traffic to brick-and-mortar businesses. Companies like Yelp struggle to quantify the sales they drive to restaurants and other stores. Even if people discover or choose a place to go on Yelp, there’s no geofenced trigger they pull back in the app when they arrive to confirm that’s how they got there.
Pokémon GO benefits from building demand for its free-to-produce virtual goods, which users claim when they arrive at a sponsor’s business. That lets sponsors pay under $0.50 per visitor. Other apps would need to build similar demand for something that costs nothing to give away, or be forced to distribute discount coupons or other incentives that could balloon the sponsorship price beyond the potential return on investment.
Yelpers or other app users might not be willing to trek to a certain business and then go through the chore of redeeming the prize upon arrival if all they get is a badge or sticker. Apps have to get creative.