Remember Pokémon Go? We were such nerds back then! Just kidding, we’re still nerds. And even though you’ve left Pokemon Go behind along with your pogs and troll dolls and stone-washed jeans, reports of the app’s decline are missing the point—along with hundreds of millions of dollars.

It’s not like Pokémon Go needs white knight (or a 200 HP Snorlax) to defend it. It’s cashing in! It’s doing just fine. But it also presents a unique opportunity to look at just how the app store economy works, and why public perception rarely lines up with the, in this case, very profitable reality.

Remember, this is an industry where an app can lose 20 million players in a month, and on some days make even more money. At least, if that app Pokémon Go.

The Long Fade

I get it. When Pokémon Go launched, you were right there with it. You joined team Valor, you caught a few dozen Weedles, you maybe even coughed up real money for fake coins to pay for lures to catch digital monsters with names that are a little on the nose, no offense Spearow. You maybe, maybe even figured out the Easter egg that guarantees your Eevee evolves exactly how you wanted it to.

But the Pidgeys piled up, and temperatures cooled, and so did your interest in catching them all, or even catching them some. Adolescent Pokéfans went back to school. You went back to Twitter and Instagram and a plague of iMessage stickers. Suddenly, gyms and Poké Stops seem a lot less crowded.

That’s anecdotal, but it’s also true! Pokémon Go spent weeks at or near the top of the iTunes rankings for free apps. Now it’s 30th. According to the latest numbers from app market analyst Apptopia, monthly active users plummeted from 50.2 million on August 12 down to 32.4 million on Sept 10. Average session times fell sharply as well, from 6.82 minutes to 5.41 The implication: That sure ended fast.

Here’s the thing. Those charts with the downward-drooping red lines, and even what you’ve seen with your own eyes, belie what’s really going on with Pokémon Go, which is that that it’s still an absolute monster. Apps don’t make money the way you might think. In most cases, they don’t need you to make money at all.

Whale of a Time

What’s lost in talk of Pokémon Go decline is context, so here’s a dose. First, according to app analytics company App Annie, about one in 10 US smartphone users are still playing the game. Pokémon Go is still as popular on Android as Twitter, and matches up with Pinterest on iOS. And in Japan? At least 20 percent of smartphone users play regularly.

That’s not to say the decline isn’t real; it definitely is. But all apps fade in time. The right question to be asking is how much.

“For users that came in July, the 30-day retention is excellent,” says App Annie executive Fabien Pierre-Nicolas, who notes that Pokémon Go is holding onto players better than even heavy-hitters like Candy Crush and Clash of Clans did. “People often forget that no matter what, every app has a decay curve. But seeing it decay slowly is a sign that the app is healthy.”

The apps that tend to be toast are the ones that drop off a cliff after a week or two. Many apps only manage to hold onto two or three percent a month in. Games that are generally considered to be big hits retain about 30 percent. Pokémon Go beats that benchmark as well.

And even if it didn’t, even if the overall decline were a serious cause of alarm, things would still be fine, because of how apps actually make money. It’s not from however many millions of users chipping in a few bucks at a time. Apps that rely on in-game purchases get the bulk of their revenue from a small percentage of power users, the people who are already pushing Level 30 and have stockpiled enough Pokémon incense to ride out the decade.

Pokémon Go illustrates this perfectly. That free fall over the last month, where it lost nearly 20 million players? Daily revenue dipped just two percent in that same time, according to Apptopia. In fact, if you compare August 12 to just one day earlier, Sept 9, daily revenue was actually up. Again, that’s despite losing over a third of active players.

Pierre-Nicolas pegs the percent of users that Pokémon Go has managed to pay up for extras at around 10 percent, a huge number relative to the app market as a whole. That’s also why Pokémon Go is still the top-grossing app in the App Store, despite such a seemingly large dropoff in downloads. It still brings in more money than even apps like Netflix and Spotify, which are bolstered by steady streams of subscription income, not a string of impulse Poké Ball buys.

App Annie estimates that the game has brought in $530 million. In a little over two months. So, yes, because of how the app economy works, Pokémon Go is doing just fine. And it could start doing even better.


Pokémon Go isn’t just big. It’s nimble. After quashing a slew of bugs that frustrated legions of early adopters, developer Niantic has gone on to add meaningful features at a regular clip. Just this week, an update let users pick a Pokémon buddy to walk with them to gain monster-specific upgrades along the way.

“They’re approaching it as a service, not a product,” says Pierre-Nicolas. “They keep adding every two or three weeks. IF anything, when you compare it to Candy Crush, Clash of Clans, and all those top-grossing apps, the steps that Niantic is taking is identical.”

Even if the general public hasn’t fallen off, there’s enough new in Pokémon Go to keep that core group of users engaged. And there’s still plenty of room to grow; Niantic hasn’t yet introduced the so-called “Legendary Pokémon” that, when revealed, will be the most powerful creatures in the game.

More important than in-app improvements might be the fact that Pokémon Go still has plenty of geographic room to grow.

“There are still a number of countries and continents that Niantic has yet to reach with the game, including places like China, India, Russia, parts of Africa and Southern Asia,” says Niantic spokesman Chris Kramer.

Which is, you know, pushing three billion people. Many of who own smartphones and play games on those smartphones and make in-app purchases to advance in those games.

So no, you’re not seeing Pokémon Go everywhere anymore. You’re not playing it as much, if at all. Doesn’t matter! The way the app economy works, it didn’t really need you in the first place.


This article: 

Pokémon Go Is Doing Just Fine, With or Without You