User Retention is Declining in Pokemon Go

Like new songs, new applications are typically only enjoyed until everyone gets bored of them. Well, it looks like this same death cycle is rearing its ugly head to Pokemon GO. Within a week after Pokemon GO was released in the US, it had broken records at the Apple store for most downloads in a week. Herds of people were crowding famous landmarks labeled as “Pokestops,” as they scurried to find their first legendary Pokemon. There were also reports of people rudely scavenging on their phones in places like graveyards and memorials.

Nevertheless, it seems as if the glory days of Pokemon GO are a thing of the past. At its peak, it was reported that Pokemon GO had 45 million players on the date of July 17, according to their Daily Active Users statistic.

However, Axiom Capital Management reported that over 10 million players have quit the game since the middle of July. The estimated daily users of Pokemon GO has subsided to below 30 million as of late August. Axiom’s statistics are also showing that engagement and downloads of Pokemon GO has fallen as well.

Fortunately, this decline in daily use has been offset by the proliferation of Pokemon GOers in foreign countries. Right as Pokemon GO was waning in popularity, they began releasing the game in countries such as Brazil, China, Indonesia, France, and more. As a result, the revenue lost by players quitting in the US is being compensated for by the growth experienced in other countries.

This is illustrated through the marginal decline in Nintendo’s profits. Nintendo owns about one third of Pokemon GO, and their price share fell only about 3% as a result of the diminishing popularity. Thus, Nintendo will certainly be able to stay afloat despite this Pokemon GO drought.
Although games are expected to lose players after a popularity boom, there are certainly other factors at hand other than time. For example, Niantic, the creators of Pokemon GO, cracked down on cheating and the usage of third party websites for unfair advantages. Plus, Niantic made the game slightly harder by removing the “nearby” feature on the game, which could have dissuaded some users from playing.

In sum, despite this loss in popularity, both Niacin and Nintendo will certainly have the resources to keep their businesses afloat.

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