The Profit in the PokéStop

Pokémon Go transforms our public spaces into potential sites of exchange and purchase, and its inhabitants into roving profit centers.

Pokémon Go is a phenomenon. Despite having been released a short time ago and in a select few countries, the game has garnered more active daily users than Twitter and is already generating $1.6 million of in-app purchases per day in the United States alone. Nintendo, which has a 33 percent stake in the Pokémon franchise, has seen its stock value double since the game’s debut.

An “augmented reality” spin-off of the popular Pokémon video game franchise for iOS and Android devices, Pokémon Go uses your GPS to generate a virtual map that transforms real-world locations into “PokéStops” that can be used to capture Pokémon or collect in-game items.

Follow the prompts that appear on your map and churches, public parks, university campuses, street corners, and historic monuments become potential Pokémon hunting grounds. Location and time of day are key: water-type Pokémon like Goldeen and Horsea are more likely to be found by bodies of water while ghost Pokémon like Haunter are more likely to be caught at night.

These PokéStops recently prompted a small stampede of players searching for rare Pokémon in New York’s Central Park and lured roughly 2,000 people to the Sydney Opera House. Police stations have had to warn people away from entering inside. Dozens of people appeared outside a Massachusetts man’s home — a church that was converted into a residence — after it was designated a Pokémon Gym where players can compete against each other.

It may be a momentary illusion in your smartphone’s camera, but there’s something delightful about seeing fully rendered 3D Pokémon appear right in front of you, whether it’s on the sidewalk or in the middle of a packed subway. Pokémon will appear at random, making you occasionally feel like you really are an intrepid Pokémon trainer, exploring wild grasslands and caves in a bid to complete your Pokédex (even if you have to avoid bumping into strangers on the street). Although you’re using your phone to navigate, the digital interface keeps you tethered to the neighborhood, always looking for that one special spot that might net you a rare and powerful Pokémon.

Pokémon Go’s design pushes you to notice significant landmarks that you might otherwise miss walking down the street, all so that you can replenish necessary supplies in your quest to catch ‘em all.  While playing in Toronto, I was directed to several murals, historical plaques, and sculptures that I had never seen before.

The app, which uses the original 151 Pokémon that appeared in the game’s first generation over twenty years ago, effectively combines the novelty of smartphone technology with the nostalgia of its classic brand. But behind its seductive interface lie thorny questions about the monetization of public spaces and our activities within them.

Pay for Play

Video games have been a cultural fixture for the past forty years, but the advent of mobile games, and the familiar sight of commuters tapping away at Candy Crush or Angry Birds, has made them seem more ubiquitous than ever. Pokémon Go takes us a step further.

By overlaying a game interface onto real-world sites and landmarks, it collapses the distinction between the physical and the virtual. And through the game’s transactional nature, it abolishes the old boundaries of the marketplace. The public park, the community church, the sprawling college campus, and the open square are all commodified with Pokémon Go’s in-game virtual item economy, which supports a very real, corporate one.

This is a welcome windfall for Nintendo, which has recently seen flagging console and game sales. Rather than waiting for sales in the home or through the digital marketplace — spaces that game manufacturers have already saturated with products — they’ve figured out how to turn every open, unproductive space in your city into a site of potential profit.

The commercial intention of Pokémon Go’s exploration and social features become more obvious when examining its gameplay, which differs in crucial ways from its handheld versions. Pokémon caught in the game do not have levels but instead “CP” or Combat Power. CP is increased by giving your Pokémon stardust and candies — two resources collected by catching Pokémon (including ones you’ve already caught) over and over again.

Players must also have the right amount of candies to evolve their Pokémon to a more powerful form, but collecting these candies is an extremely time-consuming process. Even the fact that you can exchange your duplicate Pokémon for candy doesn’t significantly reduce the amount of effort. Magikarp is a particularly egregious example. It requires four hundred candies to evolve into the much more powerful, battle-ready, Gyarados. Contrast this with the regular Pokémon games where you level up and evolve your Pokémon by battling other Pokémon and Pokémon trainers.

In terms of combat, the game ditches the typical four moves and turn-based battle for simply swiping to dodge and tapping to attack. The higher your CP the better you’ll do against other trainers’ Pokémon. You don’t even wear Pokémon down to catch them, but instead use an inconsistent on-screen swipe move to throw Poké Balls until they are caught. The purpose of the game’s systems is thus clearly discernible: to wear down your in-game resources and significantly increase the effort you have to make if you don’t want to spend any money.

The game — while free to download — combines gatekeeping gameplay with repetitive mechanics and intense grind, incentivizing players to buy in-game items with real money to make the process easier. These micro-transactions range from ninety-nine cents to ninety-nine dollars. In this way Pokémon Go monetizes players’ exploration of the spaces around them, creating a tightly controlled virtual economy that contributes to the profits of Niantic — the developer of Pokémon Go — Google, and Apple, whose digital storefronts the game is downloaded from, and of course, Nintendo.

A recent profile of Niantic in Motherboard details the company’s previous forays into commercializing augmented reality. Niantic began life as Keyhole, a startup looking at commercial applications of mapping technology, before it was acquired by Google in 2004. Niantic was then developed within Google in 2010 before being spun off in 2015.

At Google, it developed a precursor to Pokémon Go called Ingress — an augmented reality game played on mobile phones that cast the player as a hacker battling with other players for control of special portals. These portals, just like Pokémon Go’s PokéStops, are tied to real locations. In fact, many of the PokéStops found throughout Pokémon Go are analogous to the portals found in Ingress. Niantic monetized Ingress by turning businesses into sponsored locations that hosted one of Ingress’ in-game portals. Niantic’s CEO John Hanke has confirmed that Pokémon Go will also have sponsored locations.

The Pokémon Go and Ingress formula is reminiscent of William Gibson’s 2007 novel, Spook Country, which explores the reshaping of public space for commercial ends through augmented reality technology. In his novels and short stories of the 1980s, like Neuromancer and “Burning Chrome,” Gibson explored cyberspace as a separate virtual realm hosted by large, centralized corporate data networks. But in Spook Country cyberspace is an integral and inseparable part of the real world.

One of the novel’s main characters, Hollis Henry, uses an augmented reality headset and GPS coordinates to track down a public exhibit where a virtual copy of River Phoenix’s corpse is placed on the same Los Angeles street where he died. Spook Country, along with the other two novels of William Gibson’s informal trilogy of the early to mid-2000s, Pattern Recognition and Zero History, is obsessed with trendspotting, and how spaces are mediated and reshaped by new technology to support and cash in on the latest cool thing.

Gibson’s vision appears to be becoming reality — marking the beginning of an upsurge in both augmented and virtual reality gaming, and heralding a process in which the public sphere and its previously open spaces are increasingly assigned arbitrary economic value.

This doesn’t mean the game isn’t intensely enjoyable. It simply means that for the game’s designers getting us outside is the point; through Pokémon Go, every location in our world is a potential site of exchange and purchase, with players acting as decentralized profit centers.

Savvy business owners are already trying to get in on the action by buying “lure modules” to increase foot traffic. A “lure module” is a special item in Pokémon Go that essentially randomly generates Pokémon at that location for thirty minutes. A key part of this is that lure modules are tied to a PokéStop, so businesses not adjacent to a PokéStop must apply to become a designated PokéStop.

The geography of PokéStops is extremely uneven. People playing in the suburbs or in more rural areas have complained that there are barely any PokéStops or Pokémon to catch, and some have noted that Pokémon Go’s economic potential is heavily concentrated in already affluent areas.

Unequal distribution of goods is also now a major component of Pokémon Go’s in-game item economy: players who didn’t get a head start two weeks ago in the United States, Canada, and other regions where the game was just officially released may not have a chance at making a real impact in team battles at Pokémon Gyms. Pokémon Gyms are different from PokéStops in that you can leave your Pokémon there to battle other players.

There is a real economic benefit to having powerful Pokémon defend the gyms. Every day your Pokémon successfully defends the gym from other players you are rewarded with Pokécoins, the in-game currency used to buy items. Since the only other way to obtain Pokécoins is by actually buying them with real money, players who waited may be out of luck, unless they are willing to grind it out or drop the necessary cash to successfully compete over this key resource in the game.

The Future of Fun

Pokémon Go as a video game craze is not without precedent. The arcade boom of the late seventies and early eighties was another time when video games ubiquitously used physical space for economic activity. Nearly everywhere you went — shops, restaurants, and in one rumored case, a funeral home — arcade machines were placed inside businesses to increase foot traffic and profits.

Initially, in the heady days of the first video game boom, these places were able to install a Pac-Man or Space Invaders machine and pay off the initial cost quickly. A popular arcade machine cost $1,200 to $1,700 at the time and could pull in anywhere from $300 to $400 a week. Even with the split with the manufacturer, businesses could pay it off in a month or less.

Arcade machines were also — like Pokémon Go — micro-transactional, allowing a player to bet their skill and whatever quarters they had in their pocket against the toughness of the machine. But Pokémon Go goes far beyond the arcade games. It is much more pervasive, decentralized, and profitable, and more closely integrates the economic relationship between real and virtual spaces.

The enduring appeal of the Pokémon series has always been its themes of discovery, exploration, and friendship. Exploring neighborhoods with friends and strangers to catch bizarre, colorful creatures in Pokémon Go is fun and builds on this appeal.

But it’s still worth interrogating the logic that underpins Pokémon Go because play does not always have to be contingent on the needs of capital. Augmented reality games have the potential to go in any direction. We can make games that preserve the elements of social exploration, discovery, and fun without yielding more aspects of our life to the generation of profit.