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Pokemon Go trickle-down boosting local game industry, developers say

Thursday, 21 Jul 2016 13:45:13 | Emily Stewart

Game developers say the success of Pokemon Go will be good for the local industry.

Cult hit Pokemon Go has broken records as the highest grossing mobile app, and Australian game developers say the success will flow through to the local game industry.

Key points:

  • Australia has 270 game developers
  • Video game industry worth around $3b per annum in Australia
  • The 18m Australian mobile users spent $870m on games last year

The local video game industry is comparatively small, with around 270 game developers nationwide, but a crop of successful games including Flight Control by Firemint and Crossy Road by Hipster Whale have helped put developers on the global map.

"Where it helps the game dev industry is it's going to make it easier for us to be able to sell those concepts," said game developer Wil Monte.

Mr Monte creates educational games and is one of the creators of the hit 'Dumb Ways to Die', owned by Metro Trains.

It went to number one on the iTunes app store in 21 countries, and clocked up 1 billion players.

"A lot of this stuff because it is so, deemed as a bit of a risk, however with a case study like this behind us it gives us the confidence to go in and say if you do this right the reward is absolutely massive," said Mr Monte.

Mobile fastest growing platform

In Australia alone, the video game industry is worth almost $3 billion, and last year it enjoyed double-digit year-on-year growth.

While in the 90s it was all about playing on consoles and PCs, mobile is now the fastest growing platform.

"Certainly Australia is right up there as one of the countries most engaged with video games - that's traditional console-based games - and mobile games we're certainly heavy core users," said Ron Curry, chief executive of the Interactive Games and Entertainment Association.

"There's around about 18 million mobile users in Australia — we know one of the major activities people do on their smartphone is play games," said analyst Foad Fadaghi from research firm Telsyte, adding that Australians spent $870 million last year on mobile games alone.

But the key to success is the developer's relationship with Apple and Google.

"There is no level of side marketing unless you're going in with a licence like Pokemon that will give you the exposure you need to rise to the top of millions of other apps," said Mr Monte.

Pokemon Go's success

"Pokemon Go is a great marriage between technology, the notion of play and also a great franchise in Pokemon," said Mr Curry.

"While the app is a fun pastime for many players combing the city streets to capture digital creatures, for big business it is big money."

Created by Google-spin off Niantic and the Pokemon Company in a joint venture, the game reportedly earned $35 million in its first fortnight, and Goldman Sachs has estimated the game could generate $2.5 billion in annual sales.

Nintendo has doubled in value and is now worth $50 billion, despite a slight pull back on its shares in the past two days.

Investors are also piling into Apple shares, and brokerage firms forecast it will make $4 billion in revenue from gamers buying "pokecoins" in the app store.

Shares mildly related to Pokemon, including those that sell the branded bread, burgers and cartoons have also soared.

"Nintendo has been a little bit quiet over the last few years in the past people have said they've missed the mobile revolution," said Mr Fadaghi.

"They've really come back roaring with Pokemon go."

You can watch Emily Stewart's story today on The Business at 4:30pm and 8:30pm (AEST) on News 24 and 11:00pm (your local time) on ABC.

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