Gamers of the world, unite! The launch of Pokemon GO sent mobile gamers in a frenzy, sending users to the streets to capture animalistic characters of the game to progress.
The brand first made its name in Japan back in 1998 in the form of anime and manga.
Since then, Nintendo has released a total of 122 Pokemon games across different gaming consoles.
When Pokemon GO was first launched in Malaysia on that August 6 morning, you can be sure that many eager players – myself included – logged in to their respective app stores to download the long-anticipated game.
Although initially met with criticism from concerned parties, what was undeniable was the allure of this location-based augmented reality Pokemon GO game developed by Niantic, Inc. With Pokemon GO, users are able to literally ‘catch Pokemon in the real world’.
The app and its map not only allow users to catch the Pokemons lurking around nearby: Players will also be able to find PokeStops and load up their bags, all while progressing forward in leveling up their trainers and earnings medals.
In short, this was a dream come true for longtime fans of the popular Pokemon or ‘pocket monster’ franchise.
Making a quick buck
Soon enough, the main Pokemon GO ‘hotspots’ – places where there are numerous Pokestops and a higher rate of (sometimes rare) Pokemon appearances – are now established in major cities.
While consumers take to the game addictively, businesses are not left out of the spirit of “Gotta catch ‘em all!”
Take Kuching for example, whereby original tourist hotspots such as the long stretch of the Waterfront and the well-traversed Malaysia-China Friendship Park are places often frequented by players converging to catch Pokemons.
A trip to the Friendship Park during the first week of the Pokemon GO hype saw a few business-savvy minded youths take it upon themselves to start selling drinks to thirsty Pokemon GO players and trainers as the latter captured Pokemons or battled it out at gyms which were conveniently situated at or near the park.
And that was just one of many business opportunities that have since presented itself since the nationwide launch of the game.
As iMoney.my editor Iris Lee pointed out recently, even if you do not have a business, there are various ways to leverage on the trend to earn some extra cash.
“For example, printing Pokemon graphic T-shirts to be sold online, or selling made-to-order Pokemon cupcakes for birthday parties or just a Pokemon GO get-together,” she said. “People cashed in hard on Angry Bird’s merchandise, no reason not to do the same for Pokemon!”
One of the more unique approaches to cashing in on Pokemon GO is getting paid by other people to play using their accounts or just filling your accounts with Pokemons and levelling up to a high ranking trainer in a short period of time before selling off the account to interested buyers. It is all about taking advantage of the trend before it eventually fizzles.
Bigger players catch a slice
Generally, in countries where Pokemon GO made it premiere, it could be seen that two particular sectors were quick to take advantage of this phenomenon – telecommunications (mobile network operators) and retail.
With all the hype surrounding the game, Malaysia’s mobile network operators (MNOs) and retail industry were certainly not going to miss out on this action and as expected, Pokemon GO marketing campaigns and promotions were soon popping up everywhere following the launch of the game.
Let’s face it. Despite waning interest a month into the Pokemon GO wave, there are still players out there who have yet to tire of this game.
BizHive Weekly takes a look at the impact Pokemon GO has had thus far on the telco and retail sector in Malaysia.
Telcos: Bundling data and in-game goodies
Perhaps the most obvious beneficiary of this trend are telecommunication (telco) players such as Maxis Group Bhd, DiGi.com Bhd and Celcom Axiata Bhd.
RAM Ratings co-head of Infrastructure and Utilities Ratings Davinder Kaur Gill observed that the buzz surrounding Pokemon GO – and the worldwide availability of AR and virtual reality gaming to the masses – sets the stage for a more rapid shift of the multi-billion dollar gaming industry to the mobile platform, away from traditional platforms such as consoles and desktops.
“As such, with greater gaming time comes greater data usage and more,” she told BizHive Weekly in an email. “Capitalising on the growing data usage due to Pokemon GO is just one of many ways that telcos or MNOs can leverage on the game’s popularity.”
The app is a potential catalyst for mobile data consumption, she added, based on the quick traction the app has gained since its inception.
“We are monitoring the use of the app to see if it acquires the momentum to be a significant game changer for mobile data consumption,” she affirmed.
This trend, if sustained, will likely see an increase in data uptake among the most avid gamers, and may require users to upgrade their data plan and/or pay for add-on data packs.
Based on RAM’s estimates of each hour of play consuming 10MB of data and around 5 hours of daily playtime for a small percentage of the most ardent fans, Davinder believed industry revenues may show an uptick of circa 0.5 to one per cent over the next 12 months, provided that the fad is sustainable.
“In this regard, even if the hype surrounding Pokemon GO is short lived, it still sets the stage for augmented reality, connection-dependent applications to become mainstream in the future,” she added.
“Telcos are riding this new wave by ”spicing up” their data packages to include cash rebates and in-game goodies, and are even collaborating with GrabCar and Uber to entice mobile subscribers.”
While the data usage of the Pokemon GO application is not expected to result in any large surges of data requirements on telco networks, it does present an interesting challenge for network architecture of the future, given large amounts of simultaneous usage at very specific locations.
“As incumbents and new players in the data space ramp up capex and upgrade their LTE networks in anticipation of intensified data consumption, the arrival of augmented reality apps is timely.
“Networks of the future would need to be nimble enough to evolve alongside the data usage patterns of future applications. Also on the horizon is the Internet of Things and new mobile apps that may change day-to-day life, all of which point to greater data usage.”
Meanwhile, Lee from iMoney gave examples of such instances occuring in other countries like Hong Kong whereby CSL and 1010 will offer customers free unlimited data, while other some telcos in Australia are offering ‘gamers plan’ where data usage for the game will not be counted in the data quota.
While data consumption is one area of revenue uptick for the MNOs, Davinder told BizHive Weekly in an email interview that garnering a slice of the in-app purchase revenues and other revenue generating potential of games like Pokemon GO such as advertising, etc. has the makings of a larger game changer for the MNOs (instead of solely relying on data consumption).
“The MNOs are riding the Pokemon GO wave through bundling of data packages with in game goodies,” she said.
“Further to that, the MNOs have been embarking on user engagement contests and lures as well as collaborating with other merchants (such as Grab and Uber) in a bid to entice mobile subscribers.”
Davinder added that it has been further reported that online payment channels of these MNOs, such as CelcomPay, has also seen a surge in traffic owing to online transactions related to Pokemon GO.
In Malaysia, Iris observed that there has been quite a lot of Pokemon GO-related marketing and promotional activities, especially from Maxis Bhd (Maxis) and U Mobile Sdn Bhd (U Mobile).
Indeed, Maxis was quick in responding to the Pokemon GO craze, even going so far as to launch the Grab-Hotlink PokeMobile before the game was made available in Malaysia.
“We are aware there is a huge Pokemon following in Malaysia and we wanted to join in the trill of the game. As Grab has always been focused on providing safe, comfortable, convenient and affordable rides, we wanted to encourage and help Pokemon Trainers hunt for the Pokemons while traveling from one PokeStop to another safely.
“In addition to our exclusive PokeMobiles, players can truly enjoy an immersive Pokemon GO experience and up their ante as each car comes equipped with a special Grab goodie bag, a car handphone charger and water for uninterrupted gaming pleasure,” said Jaygan Fu, country manager of Grab Malaysia.
Aside from providing PokeMobiles, Maxis stated that PokeMobile riders who are also Hotlink customers will get an extra advantage in the form of free US$100 worth of PokeCoins via Hotlink Cash Online, a Hotlink credit that can now be used for purchase of apps or in-app items such as PokeCoins in Google Play store. The free US$100 worth of PokeCoins is equivalent to 14,500 PokeCoins, which players can instantly exchange for additional gaming advantage.
Moreover, Maxis’ promotion also ensured that Hotlink customers will get 10 per cent off their PokeCoins every time via Hotlink Cash Online.
A month prior to the launch, U Mobile was just as prepared for the Pokemon GO wave compared to its larger incumbent competitors, from providing sufficient mobile data plans to setting up lures to attract Pokemon characters for two weeks post-launch.
U Mobile was also quick to establish the transportation factor in Pokemon GO by providing U Mobile customers discounts off their Uber rides so that “trainers may get to their desired PokéStops or Gyms faster”.
In addition, U Mobile cashed in on concerns of the battery life of customers’ mobile phones by allowing them to enjoy special discounts when they purchased powerbanks from Lazada for a limited period of time.
On another note, Iris highlighted that speed is quite important for gamers when playing the game – a drop in signal could mean the loss of a rare Pokemon.
“Hence, we may be able to see an increase in plan upgrades, or even a switch in telcos if they find their currently telco is unsatisfactory,” she said.
However, she stressed that how big the impact will be, will really depend on the staying power of the game.
“To remain competitive, telcos have to be more creative in ‘catching’ and keeping their subscribers while the craze is still on-going,” Iris opined. “Personally I feel that the most important thing is the stability of the service.”
Overall, while the data usage of the Pokemon GO application is not expected to result in any large surges of data requirements on telco networks, RAM Ratings observed that it does present an interesting challenge for the network architecture of the future, given large amounts of simultaneous usage at very specific locations.
“As incumbents and new players in the data space ramp up capex and upgrade their LTE networks in anticipation of intensified data consumption, the arrival of augmented reality apps is timely.
“Networks of the future would need to be nimble enough to evolve alongside the data usage patterns of future applications.
“Also on the horizon is the Internet of Things and new mobile apps that may change day-to-day life, all of which point to greater data usage,” it said last month.
Retail and REITs: Luring players to malls
While there has been a progressive slow down in the Pokemon GO hype in the past few weeks, there are still crowds of players who remain dedicated to the game and thus will still make efforts to visit popular hotspots for now.
These Pokemon GO-concentrated hotspots are not limited to famous landmarks or monuments in a city or town. It also includes shopping malls and food and beverage (F&B) joints, thus benefitting small and medium businesses along the way.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), managers of shopping malls have utilised the game as a marketing tool to attract customers to visit their retail space, hoping that higher footfall could be converted into actual spending.
MIDF Research noted that F&Bs, convenience stores as well as mobile phone accessories businesses appear to be beneficiaries of this craze.
“Small and medium businesses like restaurants and merchandise sellers could also benefit from this craze,” it said in a sectoral outlook following the game’s launch. “Players also tend to buy additional power-banks to quickly recharge their mobile phones as they catch the Pokemons outdoors.”
The research arm observed that hundreds of players would ‘camp’ at parks to hunt for Pokemons even late at night.
“This extended outdoor activities could lead to consumer spending at convenience shops as players rejuvenate themselves with drinks and food. Even property developers take the opportunity to draw crowds into their sales galleries,” it added.
Iris pinpointed that Pokemon GO is already having an impact on the F&B industry, especially those located in the game hotspots (PokeGyms and PokeStops).
MIDF Research was also of the same opinion, reckoning that higher footfall at the malls might benefit F&B tenants as Pokemon players would likely spend on F&B during their stay at the mall.
However, the research arm did not expect the higher footfall to significantly boost the sales of fashion retailers as Pokemon players are tend to be engrossed in the game.
Hence, it expected no change to rental reversion outlook for real estate investment trusts (REITs).
“Besides, most of the REITs may not be able to capitalize on the higher revenue of F&B tenants as most of the rental income from tenants is on fixed-term.
“As such, earnings impact on REITs from Pokemon-GO craze is expected to be minimal,” it said.
iMoney’s Lee noted that shopping malls are crowded, especially for those who successfully leveraged on the popularity of the game, such as Sunway Pyramid and Pavilion KL.
“Sunway Pyramid was reported to have doubled it’s patronage since the game was launched in Malaysia, while convenience stores like KK Mart saw a 20 per cent increase in sale,” she said.
MIDF Research higlighted that one of the most common ways used by the retailers is by activating the “Lure Module” which attracts Pokemon to a PokéStop for 30 minutes.
“As a result, we expect increased footfall at the shopping malls (especially in the Klang Valley) as those malls have become hotspot for Pokemon players,” it said.
On the Kuching front, shopping malls such as tHe Spring was also swift in acting on the hype following the launch, with its #GOspringster contest whereby players who shared their ‘catch of the day’ on Instagram stood a chance to a mystery gift and constant lure module applications on the PokeStops in the compound.
The Spring Management Services Sdn Bhd (The Spring Management Services) even took it upon themselves to organise Pokemon GO meet-ups which had garnered great response from players.
“They come here and sit at Starbucks and just play the game and it creates a lot of attraction to the mall as we have several PokeStops here so that is fantastic,” The Spring Management Services director of marketing and leasing Andy Song told The Borneo Post Seeds back in August.
Lee opined in her recent Pokemon GO-related article that although businesses prioritise their profit the most, Pokemon GO offers a common ground for many businesses to reach out to their customers.
She believed that the level of engagement between businesses and consumers can be increased easily with the right message and strategy.
“The best way to do that is be part of the community, one of the hallmarks of the game. This will allow greater personal engagement with your existing and potential customers.
“The more your business is connected to the game and its players, the more likely you are to profit from the game,” she said.
That said, although the game seems to be a global phenomenon, Iris did not think that this will be a long-term trend.
“The gamers are slowly reducing and stabalising,” she said. “Though REITs are given a short-term boost during this period, I believe business will be back to usual in a few months, if the game does not introduce any game changing features to keep the gamers hooked.”
Lee said REITs with higher percentage of retail will likely benefit from this craze, but it will likely be short-lived.
On another note, MIDF Research commented that while there could be a hike in demand for some goods and services related to this hype, it is hard to ascertain how much exactly would it be translated into earnings for Malaysian listed companies in comparison with their international peers that benefit directly from the app.
That said, the research arm pointed out that one economic indication could be impacted directly and positively from Malaysians’ love of the game – the retail trade index (RTI).
“According to the Department of Statistics Malaysia, retail trade for the quarter ended June was higher by 8.7 per cent or from RM7.9 billion to RM98.5 billion year-on-year (y-o-y).
“The value nevertheless slid marginally by 1.1 per cent quarter-on-quarter,” it said.
MIDF Research underlined that the improved number was boosted by stalls and markets, which climbed 11.7 per cent y-o-y, retail sale of food, beverages and tobacco in specialised stores (up 10.6 per cent y-o-y) and retail sale of information and communication equipment in specialised stores (up 9.5 per cent y-o-y).
“This mirrors data from The Malaysian Institute of Economic Research, which portrayed a meaningful recovery in the RTI at 105 points in the second quarter.
“During the period, the RTI crossed over the 100-point mark, suggesting that confidence in the sector is restored compared to the previous quarter.
“Current and expectations indices are also up, implying that better market and business conditions are expected going forward,” it said.
As such, coinciding with the phenomenon of Pokemon GO, MIDF Research noted that the RTI for the third quarter of 2016 (3Q16) is likely to be lifted further.
“So, before the Pokemon craze stalls, businesses are likely to find ways to capture consumer spending as much as they can,” it added.