Image source: Niantic Labs.
It's fair to say that Pokemon Go mania has swept the nation. The popular mobile-gaming app based on Nintendo (NTDOY -0.33%) characters is encouraging folks to explore their surroundings despite sweltering summer conditions.
The phenomenon has been huge. Apple (AAPL 0.38%) confirmed to gamer site Polygon on Friday that Pokemon Go shattered the App Store record for downloads in its first week of availability.
The game is free to play, but there's big money to be made through the sale of virtual items that enhance play. Needham & Co. analyst Laura Martin issued a noted earlier in the week, estimating that about $3 billion in purchases could go through Apple's App Store alone in the next year or two, and with Apple collecting nearly a third of that amount, it stands to make some serious coin in the process.
This would be great news for Nintendo, Apple, Pokemon Go developer Niantic Labs, and the countless number of wireless carriers, mobile power management specialists, amusement park operators, and retail establishments that are cashing in on the spike in activity.
Too bad history has shown us that it's not likely to last.
Peak Pokemon
It's easy to believe that Pokemon Go will have legs for years to come. With tens of millions of active players in this country alone and server outages continuing as popularity increases and global expansion takes off, some will argue that we're still in the early innings of the frenzy.
Don't believe it. The biggest problem with hot mobile-app diversions is that they tend to fizzle out fairly quickly. Of course, it's easy to believe that things will be different this time. Folks are spending too much time -- and, in a growing number of instances, money -- to flesh out their Pokemon battalions to let the game go. However, many Zynga (ZNGA) shareholders probably thought folks building out their farms in FarmVille would never cut their virtual parcels of land loose. Likewise, Glu Mobile (GLUU) investors figured that the deeper you went into Kim Kardashian: Hollywood, the more likely you were to stick to the celebrity simulator.
Zynga and Glu Mobile eventually saw their bookings and billings take a hit, and these days Zynga and Glu Mobile stock trade at a sliver of their all-time highs, back when their games were the toast of the Android and Apple iOS app stores.
Hot apps aren't worthless, though. Companies have recently spent billions to acquire the developers of Clash of Clans and Candy Crush Saga. However, we can't get too excited about Pokemon Go if we're looking out beyond the next few months. Nintendo's portfolio of Pokemon characters is deep, and it's clearly holding back on a few to sustain interest in the near future -- but just as Zynga and Glu Mobile investors have found that it's hard to catch lighting in a bottle again, or to keep it bottled in the first place, smartphone owners are a fickle lot.
In a few weeks there will be a glut of augmented-reality diversions in the digital Android and iOS marketplaces. Most will flop, but all it takes is one hot new app to make folks forget about the hot mobile game they were playing before.
It may not seem possible right now that people will move on. Families are connecting to play Pokemon Go together, and exploring nearby areas of interest is also enhancing social interactions with neighbors. There are a lot of great things that Pokemon Go is doing. But history has shown us that it won't be long before someone else takes that baton and runs with it.
