You can’t escape the Pokémon GO mobile game sensation. Literally. Previously uninhabited parks have been deluged by players looking for Drowzee and Zubats, melding the real world with the virtual. People have been walking zombie-like up streets furiously trying to catch, and then level up, their Pokemon monsters.
The number of people playing has reputedly rivalled major social networks, such as Twitter and Facebook.
Even the tight-lipped game’s designers would be hard-pressed to admit that they were expecting this level of success, this quickly.
While the game is quite simple, the mechanics are finely balanced. A bit like the economy of a country. Quite a lot like the economy of a country.
Welcome to Pokénomics.
Here are five parallels of the world of Pokénomics to real-world economics and business success.
1. Cities are economic hubs
On his latest podcast episode, CNET’s Luke Westaway asked what playing Pokémon GO was like outside London. I answered by showing him the view from my house. It’s a village. And that means no economic activity.
Even the town near where I live is quiet. While there are plenty of Pokéstops, the opportunities to catch Pokémons are much lower compared to London.
I did more in my 20 minutes walk from the station to my office, than 2-3 hours over the weekend.
Cities are like this too. They draw talent, investment and economic activity like giant magnets. Want to get maximise your economic potential? Move your business and yourself within reach of a city.
There’s another lesson here about access to infrastructure. Apart from the game’s virtual limitations, if you haven’t got access to a 4G network, you can’t really play it properly in the first place.
2. First mover advantage holds true
In Pokémon, there’s a clear advantage to getting on early and progressing your Pokemon. When I look at Pokégyms where there are Hypnos with 1,000+ CP, I wonder, ‘how did they get there so quickly?’. They got on the game sooner than me.
3. Hard work pays off
If you’re a follower of Gary Veynerchuck, you’ll know getting on and being better than the competition is largely about working harder (and smarter) than the competition. He always talks about the power of the hustle.
Pokémon is the same. If you didn’t get on the game early, you can really make up for lost time by dedicating more effort to the game than anyone else.
4. The sharing economy in action
One of the interesting aspects of the game is the lack of pre-defined user journey. Players have to work out the mechanics themselves. But this being the internet, other people are there to help, with literally thousands of guides and blog posts written helping people through the maze. The upside for these people is traffic to their site, to earn advertising revenue or just getting people there to sell their expertise.
Another extension of the sharing economy is people selling their personal time. You can get personal driver services, where you can get taken to top swarm sites for $20 per hour. Or other budding entrepreneurs will offer a concierge service, levelling up your account while you’re at work.
Or you can just cut the hassle altogether and buy a level 21 account for $600.
All of these things show that markets create opportunities to be exploited.
Can we model Pokémon GO?
I’m not an economist (clearly, this is just for fun), but I think that like any system where there are participants and a scarcity of resources, it can be modelled. What’s interesting is looking at people’s impulse to play the game.
There are some learnings about what motivates consumers. Economists have long-struggled with the fundamental flaw of economics: that consumers are not rational. That’s led to the rise of behavioural economics to help explain irrational consumers.
One of the core reasons why Pokémon GO really works – aside from the hype – is that it gives people a dopamine reward for progress. It’s why we’re all hooked on social networks, WhatsApp and mobile games in the first place (this piece on Psychology Today explains all this).
Where Pokénomics will really come into their own will be when trading commences. This was a core aspect of the card games, so will surely feature in Pokémon GO at some point. It’s at that point the real market opens.
If you want more from me on Pokémon GO, check out my ‘Pokéscope’ interviews with my colleague John Crossley on Persicope. The first being an introduction to Pokémon GO and the second, my views after playing the game for 24 hours.