1
00:00:04,400 --> 00:00:07,800
Speaker 1: Welcome to tech Stuff, a production from my Heart Radio.

2
00:00:12,119 --> 00:00:14,880
Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,

3
00:00:15,000 --> 00:00:17,840
Speaker 1: Jonathan Strickland. I'm ad executive producer with iHeart Radio and

4
00:00:17,840 --> 00:00:21,640
Speaker 1: I love all things tech. And previously on tech Stuff,

5
00:00:21,680 --> 00:00:25,599
Speaker 1: I talked about the founding of the company Niantic, how

6
00:00:25,640 --> 00:00:28,520
Speaker 1: it took its name from a ship that ended up

7
00:00:28,600 --> 00:00:32,400
Speaker 1: being buried under San Francisco, and it went on to

8
00:00:32,520 --> 00:00:36,560
Speaker 1: launch the phenomenally successful Pokemon Go. I covered a bit

9
00:00:36,640 --> 00:00:41,680
Speaker 1: of how Niantic developed another game called Ingress before it

10
00:00:41,840 --> 00:00:44,839
Speaker 1: jumped on Pokemon Go. So today we're going to continue

11
00:00:44,840 --> 00:00:47,080
Speaker 1: our story. We're gonna talk a little bit more about

12
00:00:47,120 --> 00:00:51,360
Speaker 1: how Pokemon Go works and how it makes money, and

13
00:00:51,400 --> 00:00:54,320
Speaker 1: also what else Niantic has been working on. So let's

14
00:00:54,360 --> 00:00:59,240
Speaker 1: first talk about how Pokemon in general, not just Pokemon Go,

15
00:00:59,360 --> 00:01:02,319
Speaker 1: but how Pokemon on in general works. From a very

16
00:01:02,400 --> 00:01:07,679
Speaker 1: high level, the Pokemon are fictional critters. They are pocket monsters,

17
00:01:07,760 --> 00:01:10,400
Speaker 1: if you will, though many of them are far too

18
00:01:10,520 --> 00:01:14,880
Speaker 1: large to fit inside of a pocket. Players called trainers

19
00:01:15,040 --> 00:01:19,120
Speaker 1: attempt to find and catch the various Pokemon and add

20
00:01:19,160 --> 00:01:23,479
Speaker 1: them to their collection or Poka decks. By the way,

21
00:01:23,720 --> 00:01:27,680
Speaker 1: get used to poke a being used a lot in

22
00:01:27,720 --> 00:01:31,880
Speaker 1: this episode. Uh. You use poke balls to catch Pokemon,

23
00:01:32,000 --> 00:01:36,440
Speaker 1: and trainers can even evolve Pokemon into more advanced forms. So,

24
00:01:36,520 --> 00:01:41,480
Speaker 1: for example, the char Mander Pokemon will eventually evolve into

25
00:01:41,560 --> 00:01:45,280
Speaker 1: a form called the char Million and then further evolve

26
00:01:45,480 --> 00:01:49,400
Speaker 1: into the charas Art. Each evolution marks an increase in

27
00:01:49,440 --> 00:01:54,200
Speaker 1: Pokemon power and some changes in their abilities. Trainers pit

28
00:01:54,440 --> 00:01:59,240
Speaker 1: their Pokemon against other trainers into Pokemon battles, and that

29
00:01:59,280 --> 00:02:02,600
Speaker 1: means in most Pokemon games you enter into a turn

30
00:02:02,720 --> 00:02:07,320
Speaker 1: based combat sequence. In the standard Pokemon games, it's clear

31
00:02:07,360 --> 00:02:10,880
Speaker 1: that some trainers are bad guys. They're working to create

32
00:02:10,919 --> 00:02:14,359
Speaker 1: a sort of criminal organization that leans heavily on these

33
00:02:14,400 --> 00:02:18,760
Speaker 1: Pokemon critters to do nefarious things, Team Rocket being a

34
00:02:18,760 --> 00:02:24,280
Speaker 1: prime example. Each Pokemon belongs to a category or a type,

35
00:02:24,760 --> 00:02:28,600
Speaker 1: and each type has strengths and weaknesses against some of

36
00:02:28,639 --> 00:02:32,800
Speaker 1: the other types. And it's kind of like paper rock scissors,

37
00:02:33,120 --> 00:02:36,440
Speaker 1: you know, because paper beats rock, rock beats scissors, scissors

38
00:02:36,440 --> 00:02:40,640
Speaker 1: beats paper. In Pokemon, however, you don't have three types.

39
00:02:40,800 --> 00:02:45,760
Speaker 1: You've got eighteen different types. Some types have no advantage

40
00:02:45,840 --> 00:02:50,040
Speaker 1: or disadvantages against each other. Uh. Some Pokemon types like

41
00:02:50,280 --> 00:02:54,920
Speaker 1: grass types are weak against many other types, and so

42
00:02:55,000 --> 00:02:58,880
Speaker 1: knowing which types are effective against others helps a trainer

43
00:02:58,919 --> 00:03:02,560
Speaker 1: win battles. And just because one Pokemon is naturally weak

44
00:03:02,760 --> 00:03:08,960
Speaker 1: against another does not necessarily mean defeat is inevitable. There's

45
00:03:09,000 --> 00:03:12,720
Speaker 1: an R and G element or random number generator to

46
00:03:12,840 --> 00:03:16,840
Speaker 1: this too, so it is possible, but very unlikely, that

47
00:03:16,919 --> 00:03:20,360
Speaker 1: a Pokemon that's weak against another will still win in

48
00:03:20,360 --> 00:03:22,960
Speaker 1: a battle if it just happens to get really good

49
00:03:23,080 --> 00:03:27,160
Speaker 1: random results and the other one gets really bad results.

50
00:03:27,200 --> 00:03:30,280
Speaker 1: But obviously the odds are against you in that scenario.

51
00:03:30,800 --> 00:03:33,280
Speaker 1: Oh and each Pokemon has a few different moves that

52
00:03:33,360 --> 00:03:36,280
Speaker 1: you can play in this turn based system. Some moves

53
00:03:36,320 --> 00:03:40,200
Speaker 1: are meant to reduce your opponent's defenses, some are meant

54
00:03:40,240 --> 00:03:44,000
Speaker 1: to decrease the potency of their next attack, and some

55
00:03:44,080 --> 00:03:47,640
Speaker 1: are just meant to inflict damage. When a Pokemon has

56
00:03:47,640 --> 00:03:49,800
Speaker 1: taken all the damage it can take, in other words,

57
00:03:49,840 --> 00:03:53,040
Speaker 1: all of its hit points are gone, it faints. There

58
00:03:53,120 --> 00:03:55,720
Speaker 1: is no dying in Pokemon, which is something of a

59
00:03:55,760 --> 00:03:59,360
Speaker 1: relief in most Pokemon games. If you're a creature faints,

60
00:03:59,640 --> 00:04:02,760
Speaker 1: you can swap in another Pokemon from your collection and

61
00:04:02,800 --> 00:04:05,840
Speaker 1: continue the battle. But if all of your Pokemon in

62
00:04:05,840 --> 00:04:09,120
Speaker 1: your in your little group faint, you lose the battle

63
00:04:09,440 --> 00:04:11,600
Speaker 1: plus some money, and you head off to a Pokemon

64
00:04:11,640 --> 00:04:14,080
Speaker 1: center where you can have your poor little critters recover

65
00:04:14,200 --> 00:04:16,800
Speaker 1: before heading back out to do it all over again.

66
00:04:17,640 --> 00:04:20,200
Speaker 1: Now there are other aspects to the game as well.

67
00:04:20,560 --> 00:04:23,720
Speaker 1: Most games allow players to buy various items which can

68
00:04:23,760 --> 00:04:27,800
Speaker 1: help during Pokemon battles, like it can help restore hit points,

69
00:04:27,839 --> 00:04:30,880
Speaker 1: for example. And then there's the poke ball, which is

70
00:04:30,920 --> 00:04:34,039
Speaker 1: a small sphere that acts both like a net to

71
00:04:34,160 --> 00:04:37,160
Speaker 1: catch Pokemon and also a storage space where your little

72
00:04:37,160 --> 00:04:41,320
Speaker 1: pokemons live. It captures them and holds them wild Pokemon.

73
00:04:41,600 --> 00:04:44,120
Speaker 1: If you encounter one in the wild within these games,

74
00:04:44,400 --> 00:04:46,039
Speaker 1: you have a chance to try and capture them and

75
00:04:46,040 --> 00:04:47,760
Speaker 1: add them to your collection, but they have a chance

76
00:04:47,800 --> 00:04:51,640
Speaker 1: to escape capture. Battling wild Pokemon with one of your

77
00:04:51,640 --> 00:04:54,680
Speaker 1: own can weaken the wild ones enough so that when

78
00:04:54,720 --> 00:04:58,240
Speaker 1: you grab them, they don't have the strength to escape. Charming, right,

79
00:04:58,520 --> 00:05:01,200
Speaker 1: all right? So in pokem Mon Go, some of these

80
00:05:01,240 --> 00:05:04,320
Speaker 1: elements made it into play early on, but not all

81
00:05:04,400 --> 00:05:06,760
Speaker 1: of them did. There were some limitations on things like

82
00:05:07,200 --> 00:05:10,039
Speaker 1: whom you could actually battle. You couldn't go head to

83
00:05:10,080 --> 00:05:13,440
Speaker 1: head against another player for example. But Pokemon Go also

84
00:05:13,480 --> 00:05:17,600
Speaker 1: introduced some elements that are not in the standard console games.

85
00:05:18,120 --> 00:05:21,560
Speaker 1: For one, the types of Pokemon you encounter depend heavily

86
00:05:21,680 --> 00:05:25,680
Speaker 1: on where in the world you really physically are. Some

87
00:05:25,720 --> 00:05:29,919
Speaker 1: Pokemon are unique to specific continents, meaning you could wander

88
00:05:30,120 --> 00:05:33,600
Speaker 1: all over uh, well, let's say North America, and if

89
00:05:33,600 --> 00:05:36,760
Speaker 1: you did, you would never see a Mr. Mine, which

90
00:05:37,279 --> 00:05:40,920
Speaker 1: frankly might be a blessing. But that's because Mr. Mime

91
00:05:41,080 --> 00:05:44,039
Speaker 1: is exclusive to Europe. You would have to travel to

92
00:05:44,120 --> 00:05:46,920
Speaker 1: Europe to have a chance of finding one in the wild.

93
00:05:47,480 --> 00:05:49,680
Speaker 1: And also the time of day matters too. You will

94
00:05:49,720 --> 00:05:53,280
Speaker 1: see a different distribution of Pokemon monsters in the morning

95
00:05:53,400 --> 00:05:56,880
Speaker 1: versus the evening, for example. Now for another thing, The

96
00:05:57,000 --> 00:06:01,320
Speaker 1: act of catching a Pokemon in Pokemon involves a gesture

97
00:06:01,360 --> 00:06:04,680
Speaker 1: control mechanic. So you've got your little poke bowl on

98
00:06:04,760 --> 00:06:07,479
Speaker 1: your screen. Then you can also see your Pokemon that

99
00:06:07,520 --> 00:06:10,559
Speaker 1: you're trying to capture on your screen. If you're playing

100
00:06:10,560 --> 00:06:14,240
Speaker 1: an augmented reality mode, the Pokemon actually appears as an

101
00:06:14,240 --> 00:06:16,840
Speaker 1: overlay of a camera view of your environment. So you'd

102
00:06:16,839 --> 00:06:19,480
Speaker 1: be holding up your camera. Maybe you're looking at like,

103
00:06:19,520 --> 00:06:22,200
Speaker 1: say a park bench, and you notice that the little

104
00:06:22,240 --> 00:06:25,719
Speaker 1: Pokemon is apparently standing on top of the park bench.

105
00:06:25,760 --> 00:06:28,840
Speaker 1: It's cute, but a lot of folks actually switch this

106
00:06:28,880 --> 00:06:31,839
Speaker 1: mode off because it does also suck up battery life

107
00:06:32,440 --> 00:06:36,159
Speaker 1: really quickly. Well, then you use a vertical swipe motion

108
00:06:36,279 --> 00:06:40,720
Speaker 1: to virtually toss your poke ball at the Pokemon. If

109
00:06:40,760 --> 00:06:43,240
Speaker 1: you first swing the poke ball around a bit like

110
00:06:43,279 --> 00:06:46,279
Speaker 1: you swirl your finger around in a circle, you charge

111
00:06:46,400 --> 00:06:49,680
Speaker 1: up the poke ball, which increases your chances of catching

112
00:06:49,760 --> 00:06:52,599
Speaker 1: the Pokemon. It also makes a little more challenging to

113
00:06:52,680 --> 00:06:55,200
Speaker 1: aim the poke ball before you throw it, which means

114
00:06:55,240 --> 00:06:57,720
Speaker 1: you might miss wildly. But even if you hit the

115
00:06:57,760 --> 00:07:02,520
Speaker 1: Pokemon smack dab and it's poke a face pa Poco face,

116
00:07:02,920 --> 00:07:06,960
Speaker 1: you aren't guaranteed to catch it. Some Pokemon are rare

117
00:07:07,120 --> 00:07:09,800
Speaker 1: and powerful, and the odds of a successful capture are

118
00:07:09,960 --> 00:07:13,000
Speaker 1: decreased unless you're using a more powerful version of the

119
00:07:13,000 --> 00:07:16,640
Speaker 1: poke ball, which leads us to the next really big

120
00:07:16,680 --> 00:07:22,240
Speaker 1: element of Pokemon Go. Most importantly for Niantic, Pokemon Go

121
00:07:22,720 --> 00:07:26,840
Speaker 1: created lots of opportunities for micro transactions. Now in the

122
00:07:26,880 --> 00:07:30,760
Speaker 1: world of games, micro transactions have become the big money

123
00:07:30,760 --> 00:07:33,840
Speaker 1: maker for certain types of games. They also can be

124
00:07:33,920 --> 00:07:37,640
Speaker 1: a real pain point for players, and depending upon the implementation,

125
00:07:37,960 --> 00:07:41,280
Speaker 1: players could just see it as a small price to

126
00:07:41,400 --> 00:07:43,040
Speaker 1: pay in order to play a game that they really

127
00:07:43,040 --> 00:07:47,920
Speaker 1: love playing, or they might see it as being really predatory. Now,

128
00:07:48,160 --> 00:07:54,240
Speaker 1: let's explain the emergence of micro transactions in the old days.

129
00:07:54,640 --> 00:07:58,280
Speaker 1: Back in like the eighties, buying a computer game meant

130
00:07:58,320 --> 00:08:01,640
Speaker 1: you plunked down your harder cheddar and you purchased a

131
00:08:01,720 --> 00:08:05,400
Speaker 1: copy of Zork and you headed on home to play

132
00:08:05,480 --> 00:08:07,320
Speaker 1: it as much as you like. You just put that

133
00:08:07,400 --> 00:08:10,320
Speaker 1: five and a quarter inch floppy disc into your disk drive,

134
00:08:11,000 --> 00:08:13,040
Speaker 1: loaded it up, and started playing, and you can play

135
00:08:13,040 --> 00:08:15,160
Speaker 1: as much as you wanted. You owned that copy of

136
00:08:15,160 --> 00:08:18,360
Speaker 1: the game, and everything associated with that game was on

137
00:08:18,400 --> 00:08:20,840
Speaker 1: the game's floppy disk. Everything that was that version of

138
00:08:20,920 --> 00:08:23,880
Speaker 1: Zork was right there, forever and ever the point of

139
00:08:23,920 --> 00:08:28,160
Speaker 1: purchase mark the one and only transaction involving you and

140
00:08:28,200 --> 00:08:32,680
Speaker 1: that Zork game. But let's skip ahead. Games get much

141
00:08:32,679 --> 00:08:35,400
Speaker 1: more sophisticated than complicated. Now. You can still buy a

142
00:08:35,440 --> 00:08:39,600
Speaker 1: full game, but now developers start creating additional material based

143
00:08:39,720 --> 00:08:42,560
Speaker 1: on that game build and they offer it as a

144
00:08:42,600 --> 00:08:46,160
Speaker 1: separate purchase. These could be sequels to a title, They

145
00:08:46,200 --> 00:08:49,880
Speaker 1: could be side adventures, or extra levels for certain games,

146
00:08:50,080 --> 00:08:53,600
Speaker 1: and typically these expansions would be built upon the same

147
00:08:53,640 --> 00:08:57,400
Speaker 1: game engine, using the same graphics resources, and featuring the

148
00:08:57,440 --> 00:09:01,439
Speaker 1: same gameplay elements, but with more content. So let's give

149
00:09:01,440 --> 00:09:04,480
Speaker 1: an example. Let's say you really loved Ultimate seven The

150
00:09:04,559 --> 00:09:09,040
Speaker 1: Black Gate, a computer RPG from back in the day. Well,

151
00:09:09,360 --> 00:09:11,679
Speaker 1: you play the game, you love it, and you wish

152
00:09:11,679 --> 00:09:15,040
Speaker 1: that there was more of it. Then you find out, hey, Origin,

153
00:09:15,360 --> 00:09:19,000
Speaker 1: the company behind it, has just made an expansion. They've

154
00:09:19,040 --> 00:09:22,600
Speaker 1: created a game called Ultimate seven The Forge of Virtue

155
00:09:22,880 --> 00:09:27,280
Speaker 1: that has more content within that game world, same graphics,

156
00:09:27,360 --> 00:09:30,600
Speaker 1: same game engine. You can keep the party going, and

157
00:09:30,600 --> 00:09:33,160
Speaker 1: if that weren't enough, you could go even further with

158
00:09:33,280 --> 00:09:36,800
Speaker 1: Ultimate seven Part two Serpent Aisle, which was really more

159
00:09:36,880 --> 00:09:39,960
Speaker 1: like an expansion pack. If that's still weren't enough, you

160
00:09:39,960 --> 00:09:43,560
Speaker 1: could also get Ultimate seven Part to the Silver Seed,

161
00:09:44,000 --> 00:09:49,360
Speaker 1: even more content built on that foundation. So this was

162
00:09:49,400 --> 00:09:52,560
Speaker 1: a way where you could keep players engaged. The players

163
00:09:52,559 --> 00:09:56,400
Speaker 1: who really loved a title could continue buying content that

164
00:09:56,520 --> 00:10:00,720
Speaker 1: tied into that title. And when massively multiplayer or online

165
00:10:00,840 --> 00:10:03,920
Speaker 1: role playing games where m m O RPGs became a thing,

166
00:10:04,559 --> 00:10:07,200
Speaker 1: then we saw this idea expand further. You would have

167
00:10:07,240 --> 00:10:10,080
Speaker 1: eager players who would soak up all the content of

168
00:10:10,120 --> 00:10:13,680
Speaker 1: an M m O RPG, and then naturally they wanted more.

169
00:10:13,960 --> 00:10:17,160
Speaker 1: They had just you know, really explored this whole environment,

170
00:10:17,200 --> 00:10:20,680
Speaker 1: and they wanted to have even more experiences. The way

171
00:10:20,720 --> 00:10:24,040
Speaker 1: the typical M m O RPGs made money, at least

172
00:10:24,080 --> 00:10:27,400
Speaker 1: back then, was twofold. First, the developer would sell a

173
00:10:27,440 --> 00:10:30,240
Speaker 1: copy of the game, just like any other computer game.

174
00:10:30,280 --> 00:10:32,480
Speaker 1: You would you know, buy a game for like thirty

175
00:10:32,600 --> 00:10:36,040
Speaker 1: forty sixty bucks whatever it might be. But then you

176
00:10:36,120 --> 00:10:39,319
Speaker 1: also had a monthly subscription fee that would kick in

177
00:10:39,400 --> 00:10:42,840
Speaker 1: at some point. That was a monthly charge to continue

178
00:10:42,840 --> 00:10:44,800
Speaker 1: to play the game online, which was the only way

179
00:10:44,840 --> 00:10:47,920
Speaker 1: the game existed. So, in other words, players had to

180
00:10:48,040 --> 00:10:51,640
Speaker 1: keep paying to play the game. Now, with that kind

181
00:10:51,640 --> 00:10:54,880
Speaker 1: of revenue model, you obviously need to keep supplying content

182
00:10:55,040 --> 00:10:58,160
Speaker 1: to your customers or else you're gonna lose them. If

183
00:10:58,160 --> 00:11:00,160
Speaker 1: someone feels like they've done everything there is to do,

184
00:11:00,400 --> 00:11:02,160
Speaker 1: then they're like, well, why am I going to pay

185
00:11:02,280 --> 00:11:04,640
Speaker 1: you know, ten bucks a month to keep playing this game.

186
00:11:05,120 --> 00:11:08,439
Speaker 1: So m m O RPGs like World of Warcraft would

187
00:11:08,440 --> 00:11:13,160
Speaker 1: introduce new expansions that would, as the name implies, expand

188
00:11:13,400 --> 00:11:16,600
Speaker 1: the scope of the game, while also typically increasing the

189
00:11:16,720 --> 00:11:20,120
Speaker 1: maximum character level cap so that players could continue to

190
00:11:20,160 --> 00:11:23,120
Speaker 1: progress the characters they had already created when they bought

191
00:11:23,120 --> 00:11:25,880
Speaker 1: the original version and kept them invested in the game.

192
00:11:26,360 --> 00:11:30,680
Speaker 1: This process would repeat many, many times, with lots of

193
00:11:30,720 --> 00:11:33,880
Speaker 1: expansions for the really successful games like World of Warcraft.

194
00:11:34,160 --> 00:11:37,800
Speaker 1: But on top of that, these games would eventually promote

195
00:11:37,840 --> 00:11:42,720
Speaker 1: a different type of transaction, sometimes not on purpose. There

196
00:11:42,760 --> 00:11:47,200
Speaker 1: became a market for in game items, stuff like weapons

197
00:11:47,320 --> 00:11:51,000
Speaker 1: or armor or potions or other things of perceived value

198
00:11:51,040 --> 00:11:53,280
Speaker 1: within within the game. You know. Sometimes these were things

199
00:11:53,280 --> 00:11:57,960
Speaker 1: that legit gave your character extra abilities. Originally, the idea

200
00:11:58,040 --> 00:12:01,199
Speaker 1: was that players would be allowed to trade for this stuff,

201
00:12:01,240 --> 00:12:04,880
Speaker 1: you know, using in game transactions between each other. So

202
00:12:05,280 --> 00:12:07,439
Speaker 1: let's say you and I are both playing this game,

203
00:12:07,440 --> 00:12:10,640
Speaker 1: and I offer you gold that I have acquired within

204
00:12:10,720 --> 00:12:14,559
Speaker 1: the game, and you need some gold, so in exchange,

205
00:12:14,559 --> 00:12:17,880
Speaker 1: you're offering me a sort of butt kicking or whatever

206
00:12:17,920 --> 00:12:21,760
Speaker 1: it might be. But before long, people started offering real

207
00:12:21,920 --> 00:12:25,800
Speaker 1: world money for in game items, or more likely, people

208
00:12:25,800 --> 00:12:30,120
Speaker 1: started soliciting for real world money in order to sell

209
00:12:30,360 --> 00:12:34,600
Speaker 1: an in game item. Initially, the reaction to this from

210
00:12:34,640 --> 00:12:36,680
Speaker 1: the company side was to try and get a lock

211
00:12:36,840 --> 00:12:39,760
Speaker 1: on it. Uh. Some players would be shelling out money

212
00:12:39,760 --> 00:12:42,240
Speaker 1: to deck their characters out and stuff that they didn't

213
00:12:42,320 --> 00:12:45,840
Speaker 1: find themselves, and other players saw it as almost like

214
00:12:45,880 --> 00:12:48,640
Speaker 1: a pay to win kind of scenario, and it created

215
00:12:48,679 --> 00:12:52,680
Speaker 1: an unbalanced environment. I'm sure I would feel a lot

216
00:12:52,720 --> 00:12:55,559
Speaker 1: of resentment if I were playing, you know, the game

217
00:12:55,679 --> 00:13:00,000
Speaker 1: as intended. And then meanwhile, Richie rich is kidding himself

218
00:13:00,040 --> 00:13:02,880
Speaker 1: out in magic armor and weapons that he just bought

219
00:13:02,920 --> 00:13:05,880
Speaker 1: from someone else and never actually bothered to, you know,

220
00:13:06,000 --> 00:13:08,640
Speaker 1: put in any work to trying to earn them himself.

221
00:13:09,679 --> 00:13:12,840
Speaker 1: But that experience also illustrated how lucrative it could be

222
00:13:12,960 --> 00:13:16,839
Speaker 1: to offer in game items for real world cash, and

223
00:13:16,880 --> 00:13:19,679
Speaker 1: we started to see some games begin to experiment with

224
00:13:19,720 --> 00:13:23,360
Speaker 1: this in different ways. Mobile games do this a lot,

225
00:13:23,880 --> 00:13:27,200
Speaker 1: and in fact tend to build in limiting factors within

226
00:13:27,280 --> 00:13:31,480
Speaker 1: the game that keep players from progressing unless they pay

227
00:13:31,600 --> 00:13:34,600
Speaker 1: a small amount to get more playtime or an extra

228
00:13:34,679 --> 00:13:37,280
Speaker 1: item or an extra life or whatever it might be.

229
00:13:37,480 --> 00:13:40,520
Speaker 1: And computer and console games began to implement it in

230
00:13:40,559 --> 00:13:44,360
Speaker 1: the form of lute crates. So these are boxes that

231
00:13:44,400 --> 00:13:51,040
Speaker 1: contain some in game you know, asset inside of them.

232
00:13:51,080 --> 00:13:53,880
Speaker 1: It might be something common, you know, which means it

233
00:13:53,880 --> 00:13:56,559
Speaker 1: wouldn't be of great value to the player. It might

234
00:13:56,559 --> 00:13:59,640
Speaker 1: be useful but not particularly valuable, or it could be

235
00:13:59,679 --> 00:14:03,079
Speaker 1: something really rare, something that's really sought after. And some

236
00:14:03,160 --> 00:14:06,640
Speaker 1: games only allow these items to enter the game through

237
00:14:06,720 --> 00:14:08,880
Speaker 1: loot crates. In other words, you won't be able to

238
00:14:08,920 --> 00:14:12,240
Speaker 1: find them through regular play unless you happen across a

239
00:14:12,320 --> 00:14:14,520
Speaker 1: loot crate and you open it up and you luckily

240
00:14:14,600 --> 00:14:18,240
Speaker 1: get that item. The odds of getting something rare reflect

241
00:14:18,559 --> 00:14:21,640
Speaker 1: how rare it is. Because this is a video game,

242
00:14:21,880 --> 00:14:27,880
Speaker 1: scarcity doesn't really exist, right. The number of Ultimate powerful

243
00:14:28,000 --> 00:14:32,120
Speaker 1: swords is limitless, despite the fact that the word ultimate

244
00:14:32,120 --> 00:14:34,920
Speaker 1: would suggest that you could only have one. No, you

245
00:14:34,960 --> 00:14:38,040
Speaker 1: could have limitless versions of this, so the supply is

246
00:14:38,080 --> 00:14:40,920
Speaker 1: completely controlled by the developer. So if say you wanted

247
00:14:41,000 --> 00:14:45,160
Speaker 1: a fancy costume for your character, like a very specific outfit,

248
00:14:45,800 --> 00:14:48,440
Speaker 1: you might have less than a one percent chance of

249
00:14:48,520 --> 00:14:52,440
Speaker 1: finding it in any given loot crate situation. And of course,

250
00:14:52,760 --> 00:14:55,880
Speaker 1: games began to introduce different tiers of loot crates, so

251
00:14:55,920 --> 00:15:00,360
Speaker 1: a basic loot crate would rarely have anything special in it.

252
00:15:01,160 --> 00:15:04,840
Speaker 1: More expensive, higher tier loot crates had a better chance

253
00:15:05,040 --> 00:15:07,880
Speaker 1: of holding something you wanted, but there was no guarantee,

254
00:15:08,240 --> 00:15:11,360
Speaker 1: and you were encouraged to buy these loot crates for

255
00:15:11,480 --> 00:15:15,800
Speaker 1: real money. A lot most games allow you to earn

256
00:15:15,920 --> 00:15:19,120
Speaker 1: loot crates through play, but it's at a very controlled,

257
00:15:19,400 --> 00:15:23,840
Speaker 1: slow pace, and the goal is to convince players to

258
00:15:24,440 --> 00:15:27,000
Speaker 1: hand over real world money to buy more of these

259
00:15:27,080 --> 00:15:30,520
Speaker 1: loot crates rather than just pouring extra hours, especially if

260
00:15:30,560 --> 00:15:33,560
Speaker 1: you've just played a game for hours, you finally opened

261
00:15:33,600 --> 00:15:35,960
Speaker 1: up the loot crates you've earned and you don't get

262
00:15:36,000 --> 00:15:38,480
Speaker 1: the thing you wanted, and you still have that desire

263
00:15:38,520 --> 00:15:41,920
Speaker 1: to have that thing. Now, let me be clear, there

264
00:15:41,960 --> 00:15:44,800
Speaker 1: are a lot of games out there that have loot crates,

265
00:15:45,000 --> 00:15:47,520
Speaker 1: and some of them don't require you to purchase the

266
00:15:47,520 --> 00:15:50,520
Speaker 1: crates with real world money. You just earned them within

267
00:15:50,560 --> 00:15:52,960
Speaker 1: the game by playing the games. But a lot of

268
00:15:52,960 --> 00:15:55,800
Speaker 1: them also do offer up that option to purchase additional

269
00:15:55,840 --> 00:15:58,360
Speaker 1: loot crates for cash, and the more you spend, the

270
00:15:58,440 --> 00:16:02,160
Speaker 1: more you get. Most of these games will offer discounts

271
00:16:02,160 --> 00:16:05,640
Speaker 1: if you buy in larger numbers. So let's say that

272
00:16:05,840 --> 00:16:08,120
Speaker 1: a single loot crate might set you back a dollar,

273
00:16:08,520 --> 00:16:11,680
Speaker 1: but if you spend five dollars, you get seven loot crates,

274
00:16:11,800 --> 00:16:15,040
Speaker 1: so it's less than a dollar each. Right, ten bucks

275
00:16:15,120 --> 00:16:18,200
Speaker 1: might get you fifteen loot crates. A hundred dollars might

276
00:16:18,200 --> 00:16:20,800
Speaker 1: get you two hundred loot crates. You get the idea.

277
00:16:21,040 --> 00:16:24,360
Speaker 1: Now here's the brilliant thing. From the revenue standpoint, Like

278
00:16:24,400 --> 00:16:27,160
Speaker 1: I said, there's no real scarcity in the real world.

279
00:16:27,640 --> 00:16:30,560
Speaker 1: Buying in bulk means that the merchant who's selling the

280
00:16:30,600 --> 00:16:35,160
Speaker 1: stuff is offloading real merchandise in the process. So if

281
00:16:35,200 --> 00:16:38,160
Speaker 1: I'm selling oranges and you decide you want to buy

282
00:16:38,280 --> 00:16:41,280
Speaker 1: five hundred oranges from me, I'm likely going to cut

283
00:16:41,280 --> 00:16:44,160
Speaker 1: you a big deal because there's a real risk I'm

284
00:16:44,200 --> 00:16:45,600
Speaker 1: not going to be able to sell all of my

285
00:16:45,680 --> 00:16:48,360
Speaker 1: oranges before they start to go bad, which means I'm

286
00:16:48,400 --> 00:16:52,320
Speaker 1: gonna have waste. I'll make no money from those spoiled oranges.

287
00:16:52,720 --> 00:16:56,800
Speaker 1: So even though I might charge customers for each individual orange,

288
00:16:56,880 --> 00:17:00,040
Speaker 1: like I don't know, fifty cents, if I'm selling the

289
00:17:00,200 --> 00:17:03,120
Speaker 1: in bulk to you, it's probably gonna be closer to

290
00:17:03,200 --> 00:17:07,040
Speaker 1: like twenty cents each, less than half, because it's still

291
00:17:07,080 --> 00:17:09,879
Speaker 1: guaranteed money for me, and otherwise I could end up

292
00:17:09,880 --> 00:17:12,359
Speaker 1: with a lot of waste and very little revenue. Right,

293
00:17:12,400 --> 00:17:15,000
Speaker 1: if I don't think I'm gonna sell those five hundred oranges,

294
00:17:15,600 --> 00:17:17,680
Speaker 1: then I'm not gonna make any money from them, So

295
00:17:17,800 --> 00:17:20,119
Speaker 1: of course I'm going to start cutting deals for selling

296
00:17:20,119 --> 00:17:23,160
Speaker 1: in bulk. However, once I do sell you those five

297
00:17:23,240 --> 00:17:27,359
Speaker 1: hundred oranges, clearly I no longer have those five hundred

298
00:17:27,359 --> 00:17:29,919
Speaker 1: oranges anymore. They don't belong to me, they belong to you.

299
00:17:29,960 --> 00:17:34,200
Speaker 1: They're gone from my inventory. So I have whatever is left,

300
00:17:34,480 --> 00:17:37,320
Speaker 1: and maybe I keep selling those for a fifty cents apiece,

301
00:17:37,640 --> 00:17:40,040
Speaker 1: or maybe less if someone else's trying to buy them

302
00:17:40,040 --> 00:17:42,719
Speaker 1: in bulk. But when it comes to stuff like loot crates,

303
00:17:43,160 --> 00:17:45,840
Speaker 1: there is no scarcity. The merchant that is the game

304
00:17:46,080 --> 00:17:48,960
Speaker 1: doesn't run out of loot crates. There's no limitation on

305
00:17:49,040 --> 00:17:52,399
Speaker 1: how many loot crates can be sold. The scarcity of

306
00:17:52,480 --> 00:17:55,639
Speaker 1: the items inside the loot crates are determined not because

307
00:17:55,680 --> 00:17:58,600
Speaker 1: there's a physical limit to how many can exist at

308
00:17:58,640 --> 00:18:03,119
Speaker 1: any given time, but because the percentage of likelihood that

309
00:18:03,200 --> 00:18:05,760
Speaker 1: they will be generated by any loot crate is just

310
00:18:05,920 --> 00:18:09,520
Speaker 1: really small. So if a merchant sells one thousand loot

311
00:18:09,520 --> 00:18:12,080
Speaker 1: crates to someone, that doesn't mean the merchant now has

312
00:18:12,160 --> 00:18:15,399
Speaker 1: one thousand fewer loot crates because they're just digital items.

313
00:18:15,400 --> 00:18:18,639
Speaker 1: The merchant can sell a limitless number to customers, so

314
00:18:18,720 --> 00:18:22,600
Speaker 1: the supply and demand mechanics don't really apply here because

315
00:18:22,640 --> 00:18:27,200
Speaker 1: there's an infinite supply. The merchant can run specials this weekend,

316
00:18:27,359 --> 00:18:30,280
Speaker 1: all loot crates are fifty off, and the merchant isn't

317
00:18:30,359 --> 00:18:33,720
Speaker 1: losing any money in the process because loot crate production

318
00:18:33,840 --> 00:18:37,080
Speaker 1: is effectively free. I mean, yeah, they're the cost of

319
00:18:37,080 --> 00:18:40,199
Speaker 1: doing business. There's the cost of running the computers and

320
00:18:40,200 --> 00:18:43,280
Speaker 1: paying the people who are running the game. Those costs

321
00:18:43,280 --> 00:18:46,639
Speaker 1: exist whether you're doing a promotion or not. But the

322
00:18:46,680 --> 00:18:49,560
Speaker 1: actual generation of loot crates, it's not like that requires

323
00:18:49,640 --> 00:18:54,680
Speaker 1: extra effort or or energy. The off weekend isn't really

324
00:18:54,680 --> 00:18:57,000
Speaker 1: a mark down in the traditional sense. It's an effort

325
00:18:57,000 --> 00:19:00,119
Speaker 1: to convince people who might not otherwise spend money on

326
00:19:00,240 --> 00:19:03,080
Speaker 1: in game stuff to go ahead and do it. And

327
00:19:03,119 --> 00:19:05,560
Speaker 1: once you convince them once, you might be able to

328
00:19:05,560 --> 00:19:09,400
Speaker 1: do it again. These micro transactions within games can be

329
00:19:09,440 --> 00:19:13,320
Speaker 1: incredibly lucrative, and they're not always so micro. There are

330
00:19:13,359 --> 00:19:15,679
Speaker 1: games that include in game purchases that can be in

331
00:19:15,720 --> 00:19:19,040
Speaker 1: the one hundred dollar range, which means you'd be spending

332
00:19:19,080 --> 00:19:22,120
Speaker 1: more money for in game items than you would typically

333
00:19:22,119 --> 00:19:25,640
Speaker 1: spend to purchase a triple A title video game period

334
00:19:26,000 --> 00:19:29,119
Speaker 1: those running the sixty to seventy dollar range. That's for

335
00:19:29,240 --> 00:19:32,160
Speaker 1: a full game. So let's just remember that, like there

336
00:19:32,160 --> 00:19:35,639
Speaker 1: are one in game purchases, which means you'd be spending

337
00:19:35,640 --> 00:19:39,000
Speaker 1: more within a game than you would to buy your

338
00:19:39,040 --> 00:19:42,479
Speaker 1: average game. Now, an important component of this dynamic is

339
00:19:42,520 --> 00:19:46,080
Speaker 1: the psychological rewards. All of these games to some extent,

340
00:19:46,200 --> 00:19:49,520
Speaker 1: depend upon creating a sort of dependency, and I promise

341
00:19:49,920 --> 00:19:52,080
Speaker 1: that will be coming back to Pokemon Go in a

342
00:19:52,119 --> 00:19:55,040
Speaker 1: little bit. But in order to understand revenue models and

343
00:19:55,080 --> 00:19:58,280
Speaker 1: how Niantic went from a scrappy company with around forty

344
00:19:58,280 --> 00:20:02,720
Speaker 1: employees to a multi billion dollar success, we need to

345
00:20:02,760 --> 00:20:05,720
Speaker 1: learn about how our ding dang brains work, because trust me,

346
00:20:06,359 --> 00:20:10,760
Speaker 1: game developers are all over it. But first, let's take

347
00:20:11,119 --> 00:20:22,119
Speaker 1: a quick break. Okay, so I've covered the basics of

348
00:20:22,200 --> 00:20:25,320
Speaker 1: micro transactions and how they work from an operational side,

349
00:20:25,359 --> 00:20:28,359
Speaker 1: but we also need to look at why they work.

350
00:20:28,800 --> 00:20:31,159
Speaker 1: I mean, sure, I might play a game that offers

351
00:20:31,200 --> 00:20:33,960
Speaker 1: me to the chance to, you know, purchase an item

352
00:20:33,960 --> 00:20:37,280
Speaker 1: within game, or maybe just the chance to find an item,

353
00:20:37,280 --> 00:20:40,159
Speaker 1: But why would I actually follow through with that? What

354
00:20:40,440 --> 00:20:44,320
Speaker 1: is compelling me to spend real world money on a game? Well,

355
00:20:44,440 --> 00:20:46,399
Speaker 1: maybe I just like the game and I want to

356
00:20:46,440 --> 00:20:49,840
Speaker 1: reward the developers. I have actually done this before. I

357
00:20:49,840 --> 00:20:52,679
Speaker 1: have a game on my smartphone that was free to download,

358
00:20:53,000 --> 00:20:55,560
Speaker 1: it was free to install, it's free to play, and

359
00:20:55,600 --> 00:20:58,040
Speaker 1: I've played it for about a year without ever making

360
00:20:58,119 --> 00:21:02,240
Speaker 1: any in game purchases. There's no advertising in this game either,

361
00:21:02,320 --> 00:21:05,360
Speaker 1: and I thought, you know, I've had hours of enjoyment

362
00:21:05,359 --> 00:21:07,719
Speaker 1: with this game. I enjoy playing it. I should at

363
00:21:07,760 --> 00:21:10,919
Speaker 1: least fork over some money to the developers. That to

364
00:21:11,000 --> 00:21:13,919
Speaker 1: me seems fair. So I made a twenty dollar in

365
00:21:14,080 --> 00:21:17,359
Speaker 1: game purchase, and every year or so I do the

366
00:21:17,400 --> 00:21:20,120
Speaker 1: same because I'm still playing that game and I'm still

367
00:21:20,119 --> 00:21:23,160
Speaker 1: getting enjoyment out of it. The developers keep adding content

368
00:21:23,280 --> 00:21:27,160
Speaker 1: to it. So without any other stream of revenue from

369
00:21:27,160 --> 00:21:29,040
Speaker 1: that game, I feel like, you know, I kind of

370
00:21:29,040 --> 00:21:32,320
Speaker 1: owe it to pay some money since I'm enjoying the

371
00:21:32,640 --> 00:21:35,679
Speaker 1: fruits of their labor. And I feel that's a pretty

372
00:21:35,800 --> 00:21:39,200
Speaker 1: fair approach because that's the way I'm viewing it. That's

373
00:21:39,200 --> 00:21:42,240
Speaker 1: the perspective I'm taking. But that's not how games, even

374
00:21:42,280 --> 00:21:46,359
Speaker 1: including the one I'm vaguely referring to, really make lots

375
00:21:46,359 --> 00:21:50,399
Speaker 1: of cash. They depend upon a different sequence. See. Games

376
00:21:50,440 --> 00:21:54,199
Speaker 1: like these really establish a reinforcement and reward system that

377
00:21:54,280 --> 00:22:00,359
Speaker 1: fulfills a psychological need we humans typically have. We crave awards.

378
00:22:00,920 --> 00:22:04,600
Speaker 1: It feels good to get a reward. Rewards fulfilled needs

379
00:22:04,640 --> 00:22:07,760
Speaker 1: like a sense of autonomy, like in other words, yeah,

380
00:22:07,880 --> 00:22:10,040
Speaker 1: I rescued the kingdom. Now I've got a pile of

381
00:22:10,080 --> 00:22:13,560
Speaker 1: gold for doing it. Or it rewards a sense of competence,

382
00:22:13,600 --> 00:22:16,760
Speaker 1: like yeah, I chopped that would so well that now

383
00:22:16,800 --> 00:22:20,720
Speaker 1: I'm even better at chopping wood. So video games set

384
00:22:20,760 --> 00:22:24,480
Speaker 1: up cycles that present players with tasks and then rewards.

385
00:22:24,880 --> 00:22:28,840
Speaker 1: Completing tasks means you get the psychologically satisfying result of

386
00:22:28,880 --> 00:22:32,600
Speaker 1: getting a reward, which in turn encourages you to tackle

387
00:22:32,680 --> 00:22:36,479
Speaker 1: more tasks. But let's say we tweak this dynamic a

388
00:22:36,560 --> 00:22:39,320
Speaker 1: little bit. There are a few ways we could do this.

389
00:22:39,440 --> 00:22:42,400
Speaker 1: We could create a shortcut. So yeah, you can play

390
00:22:42,440 --> 00:22:46,040
Speaker 1: the game and you can get a reward, or maybe

391
00:22:46,080 --> 00:22:48,520
Speaker 1: you just spend some real world money and you get

392
00:22:48,560 --> 00:22:51,600
Speaker 1: the reward right now, So you get sort of that

393
00:22:51,680 --> 00:22:55,960
Speaker 1: psychological rush of receiving a reward without all that pesky

394
00:22:56,160 --> 00:22:59,159
Speaker 1: chore stuff that leads up to it. Your character in

395
00:22:59,200 --> 00:23:02,080
Speaker 1: the game, it's more powerful, or it gets a better outfit,

396
00:23:02,240 --> 00:23:05,480
Speaker 1: or it gets more time to spend playing, or opens

397
00:23:05,560 --> 00:23:08,360
Speaker 1: up a new region, or whatever it might be. Or

398
00:23:08,520 --> 00:23:11,520
Speaker 1: we could make the tasks more difficult to a point

399
00:23:11,600 --> 00:23:14,720
Speaker 1: where most players will not be able to complete those

400
00:23:14,760 --> 00:23:19,160
Speaker 1: tasks without paying for help. Maybe you have a game

401
00:23:19,160 --> 00:23:23,080
Speaker 1: mechanic that gives players five minutes of playtime before there's

402
00:23:23,119 --> 00:23:25,640
Speaker 1: a cool down period where they cannot play the game

403
00:23:25,720 --> 00:23:29,600
Speaker 1: for a given amount of time while they recharge, and

404
00:23:29,640 --> 00:23:33,399
Speaker 1: then you include a task that, on average takes seven

405
00:23:33,400 --> 00:23:38,320
Speaker 1: minutes to complete. Well, now players who engage with that

406
00:23:38,480 --> 00:23:42,200
Speaker 1: task have five minutes to try and complete a seven

407
00:23:42,200 --> 00:23:46,240
Speaker 1: minute task. As you can imagine, that's not necessarily possible,

408
00:23:46,680 --> 00:23:50,119
Speaker 1: and they will still crave the reward that comes at

409
00:23:50,160 --> 00:23:53,160
Speaker 1: the end of completing the task, but because they didn't

410
00:23:53,160 --> 00:23:57,600
Speaker 1: have enough time to actually do that, that craving goes unfulfilled. Now,

411
00:23:57,640 --> 00:24:00,320
Speaker 1: they could wait to try and recharge in and see

412
00:24:00,320 --> 00:24:02,520
Speaker 1: if they could complete the task in the next session,

413
00:24:03,119 --> 00:24:07,399
Speaker 1: but that's leaving things unresolved, and a lot of people

414
00:24:07,480 --> 00:24:11,280
Speaker 1: just really hate that feeling. Of something being unresolved. They

415
00:24:11,359 --> 00:24:16,360
Speaker 1: crave having it resolved, and psychologically we need that reward.

416
00:24:16,480 --> 00:24:18,800
Speaker 1: So now we've got the option to maybe pay a

417
00:24:18,880 --> 00:24:21,800
Speaker 1: little bit extra for some more time so that you

418
00:24:21,840 --> 00:24:24,520
Speaker 1: can actually finish the task. It's not paying to complete

419
00:24:24,520 --> 00:24:26,919
Speaker 1: the task, it's paying to get the time so you

420
00:24:26,960 --> 00:24:29,400
Speaker 1: can do it yourself, and then you get the reward

421
00:24:29,760 --> 00:24:34,760
Speaker 1: boom micro transaction, or you create that artificial scarcity where

422
00:24:34,800 --> 00:24:38,000
Speaker 1: you make something that's really cool, like an awesome outfit.

423
00:24:38,080 --> 00:24:41,800
Speaker 1: I think of lots of games out there have different skins,

424
00:24:42,080 --> 00:24:46,800
Speaker 1: Player Unknowns, Battlegrounds, does it? Overwatch does it? Lots of

425
00:24:46,840 --> 00:24:50,240
Speaker 1: games have this right where there's just these really nice

426
00:24:50,320 --> 00:24:55,240
Speaker 1: designed outfits that make you look really cool. Well, they

427
00:24:55,240 --> 00:24:57,760
Speaker 1: tend to be pretty rare and difficult to get hold of.

428
00:24:57,800 --> 00:25:00,000
Speaker 1: You can't just buy them out right or else everybody

429
00:25:00,080 --> 00:25:03,080
Speaker 1: you would be wearing them, So instead you make them

430
00:25:03,160 --> 00:25:05,480
Speaker 1: an item that can be found in loot crates, but

431
00:25:05,520 --> 00:25:08,760
Speaker 1: you reduce the percentage of the chance that they will

432
00:25:08,800 --> 00:25:13,040
Speaker 1: appear to an absurd degree. Completionists or people who just

433
00:25:13,119 --> 00:25:16,359
Speaker 1: really love that design will chase after that. They crave

434
00:25:16,440 --> 00:25:19,480
Speaker 1: the reward of having something that most people do not have.

435
00:25:20,040 --> 00:25:22,280
Speaker 1: Or maybe they just really dig the design, and so

436
00:25:22,720 --> 00:25:26,840
Speaker 1: they'll either pour countless hours into the game trying to

437
00:25:26,880 --> 00:25:31,439
Speaker 1: earn it, or they'll start buying lootboxes in order to

438
00:25:31,440 --> 00:25:34,040
Speaker 1: try and find it that way and just increase their

439
00:25:34,040 --> 00:25:37,880
Speaker 1: odds through you know, bulk buying. Now, the commonality here

440
00:25:38,440 --> 00:25:41,080
Speaker 1: is that you as a game developer trying to figure

441
00:25:41,119 --> 00:25:43,680
Speaker 1: out the ways to create a demand for in game

442
00:25:43,720 --> 00:25:47,520
Speaker 1: items or effects, and then you exploit that way and

443
00:25:47,560 --> 00:25:51,439
Speaker 1: creating a cycle that can be repeated specifically with each player,

444
00:25:51,520 --> 00:25:57,720
Speaker 1: so that each player becomes a a source of repeated revenue.

445
00:25:58,119 --> 00:26:02,040
Speaker 1: That reward cycle can become a bit addictive, and it

446
00:26:02,080 --> 00:26:05,640
Speaker 1: can lead some players to becoming irresponsible with their real

447
00:26:05,640 --> 00:26:09,440
Speaker 1: world cash as they play. Now, I am not saying

448
00:26:09,720 --> 00:26:14,800
Speaker 1: that micro transactions are totally evil, or at least they're

449
00:26:14,800 --> 00:26:19,000
Speaker 1: not any more evil than other types of capitalist transactions.

450
00:26:19,400 --> 00:26:22,520
Speaker 1: It's mostly in how they are incorporated into a game

451
00:26:22,720 --> 00:26:26,280
Speaker 1: that really matters. If it's a paid to win scenario

452
00:26:26,400 --> 00:26:29,320
Speaker 1: where you know, if you spend money, you get better

453
00:26:29,359 --> 00:26:32,919
Speaker 1: items that give you advantages in the games, most people

454
00:26:33,040 --> 00:26:36,040
Speaker 1: tend to find that to be gross or lame or whatever.

455
00:26:36,720 --> 00:26:39,960
Speaker 1: If it's purely cosmetic, then I find that most people

456
00:26:40,040 --> 00:26:43,520
Speaker 1: think it's perfectly cromulent and if the game seems like

457
00:26:43,560 --> 00:26:47,280
Speaker 1: it completely hinges on micro transactions. So in other words,

458
00:26:47,560 --> 00:26:49,680
Speaker 1: there doesn't seem to be much of a game there

459
00:26:49,800 --> 00:26:53,200
Speaker 1: unless you're paying lots of money over time, and it's

460
00:26:53,240 --> 00:26:56,480
Speaker 1: really just kind of a churning transaction generator that is

461
00:26:56,480 --> 00:26:58,959
Speaker 1: not a good look. So how does this all relate

462
00:26:59,000 --> 00:27:02,760
Speaker 1: back to Pokemon Go. Well, the game also dips into

463
00:27:02,800 --> 00:27:06,199
Speaker 1: another brilliant cash making scheme that of you know, like

464
00:27:06,320 --> 00:27:09,639
Speaker 1: fun bucks or in game currency. It always makes me

465
00:27:09,680 --> 00:27:12,880
Speaker 1: think of Disney dollars or sometimes gift cards, and it's

466
00:27:12,880 --> 00:27:16,040
Speaker 1: the way that companies can make a lot of money

467
00:27:16,440 --> 00:27:18,719
Speaker 1: and not have a lot of cost associated with it.

468
00:27:18,760 --> 00:27:22,200
Speaker 1: And here's how it works. First, you have to exchange

469
00:27:22,440 --> 00:27:27,080
Speaker 1: real world money for in game currency or in world currency.

470
00:27:27,160 --> 00:27:30,399
Speaker 1: So let's use Disney as an example. Disney World and

471
00:27:30,440 --> 00:27:34,280
Speaker 1: Disneyland for a while allowed you to spend real cash

472
00:27:34,440 --> 00:27:38,159
Speaker 1: to buy Disney dollars. So these were bills of different

473
00:27:38,160 --> 00:27:41,679
Speaker 1: denominations one, five, ten, and fifty, and they had Disney

474
00:27:41,800 --> 00:27:45,520
Speaker 1: characters on them. You could use Disney dollars to buy

475
00:27:45,560 --> 00:27:49,520
Speaker 1: stuff in stores at Disney World and Disneyland, but you couldn't,

476
00:27:49,600 --> 00:27:53,480
Speaker 1: and this was an important part convert unused Disney dollars

477
00:27:53,520 --> 00:27:56,560
Speaker 1: back into real world cash, so you can only use

478
00:27:56,600 --> 00:28:00,199
Speaker 1: Disney dollars to make transactions at Disney properties. Clearly, you

479
00:28:00,200 --> 00:28:02,480
Speaker 1: would not be able to go into a non Disney

480
00:28:02,520 --> 00:28:06,680
Speaker 1: store somewhere and use Disney dollars because it's not legal currency.

481
00:28:06,920 --> 00:28:08,440
Speaker 1: It would be kind of like trying to buy real

482
00:28:08,480 --> 00:28:12,160
Speaker 1: world stuff with Monopoly money. And also people would hold

483
00:28:12,200 --> 00:28:14,960
Speaker 1: on to Disney dollars as keepsakes in their own right,

484
00:28:15,000 --> 00:28:19,680
Speaker 1: which meant Disney was effectively selling slips of paper for one, five, ten,

485
00:28:19,840 --> 00:28:22,760
Speaker 1: or even fifty bucks of real world money, which is

486
00:28:22,880 --> 00:28:26,440
Speaker 1: brilliant right. Well, in game currency is kind of the same.

487
00:28:26,600 --> 00:28:28,920
Speaker 1: You spend a certain amount of real money to get

488
00:28:29,000 --> 00:28:32,040
Speaker 1: a given amount of in game currency, then all other

489
00:28:32,119 --> 00:28:36,320
Speaker 1: purchases within the game are based on the in game currency,

490
00:28:36,640 --> 00:28:39,080
Speaker 1: so you've got to buy cash before you can buy

491
00:28:39,160 --> 00:28:43,280
Speaker 1: say a new hat with that cash. And typically games

492
00:28:43,320 --> 00:28:47,120
Speaker 1: like Pokemon Go will mark down in game currency for

493
00:28:47,360 --> 00:28:51,520
Speaker 1: larger purchases, so a dollar wouldn't let you one hundred

494
00:28:51,720 --> 00:28:54,959
Speaker 1: poker coins, five dollars would get you five hundred and

495
00:28:54,960 --> 00:28:58,920
Speaker 1: fifty of them. Ten dollars would get you twelve hundred coins,

496
00:28:58,960 --> 00:29:02,959
Speaker 1: and a hundred bucks would be fourteen thousand, five hundred coins.

497
00:29:03,120 --> 00:29:06,960
Speaker 1: You would be Poka rich and real world poor. The

498
00:29:07,040 --> 00:29:10,320
Speaker 1: coins would let you buy stuff like lures, which, as

499
00:29:10,320 --> 00:29:13,880
Speaker 1: the name suggests, brings out more although Pokemon critters as

500
00:29:13,880 --> 00:29:15,880
Speaker 1: you walk around, so you see more of them and

501
00:29:16,120 --> 00:29:19,040
Speaker 1: in the amount of time that you're playing. UH. That

502
00:29:19,080 --> 00:29:21,480
Speaker 1: would last for a certain amount of in game time,

503
00:29:22,240 --> 00:29:25,320
Speaker 1: and UH you might get better poke balls, which have

504
00:29:25,400 --> 00:29:27,520
Speaker 1: a higher chance of success when you use them against

505
00:29:27,600 --> 00:29:30,800
Speaker 1: more powerful Pokemon, so meing you're more likely to catch

506
00:29:30,880 --> 00:29:33,600
Speaker 1: that Pokemon, it won't get away and you won't lose

507
00:29:33,640 --> 00:29:37,680
Speaker 1: your chance of collecting it. Or you might use the

508
00:29:37,760 --> 00:29:40,520
Speaker 1: in game cash to buy lucky eggs, which allow you

509
00:29:40,600 --> 00:29:43,400
Speaker 1: to hatch a new Pokemon after you walk a certain

510
00:29:43,480 --> 00:29:46,120
Speaker 1: number of steps, and potentially you might get a rare

511
00:29:46,200 --> 00:29:50,000
Speaker 1: one that you otherwise may not have come across while

512
00:29:50,160 --> 00:29:52,880
Speaker 1: you were walking around. All of these items have a

513
00:29:52,920 --> 00:29:56,120
Speaker 1: certain number of poke coins associated with them, and it

514
00:29:56,200 --> 00:29:59,520
Speaker 1: helps obvious gate how expensive each of these in game

515
00:29:59,600 --> 00:30:03,400
Speaker 1: items are with regard to real world money, which is

516
00:30:03,440 --> 00:30:06,360
Speaker 1: another big part of using in game currency. It might

517
00:30:06,360 --> 00:30:08,760
Speaker 1: cost you a dollar to get a hundred poker coins.

518
00:30:08,800 --> 00:30:11,200
Speaker 1: But maybe an item in the game is valued at

519
00:30:11,240 --> 00:30:14,560
Speaker 1: three hundred poker coins. Now that means that it would

520
00:30:14,560 --> 00:30:17,320
Speaker 1: set you back three real world dollars to buy enough

521
00:30:17,640 --> 00:30:19,880
Speaker 1: of the poker coins if you were just buying them

522
00:30:19,880 --> 00:30:22,800
Speaker 1: in the one dollar increments. However, as you go through

523
00:30:23,120 --> 00:30:25,720
Speaker 1: it starts to become more difficult to associate the in

524
00:30:25,880 --> 00:30:30,520
Speaker 1: game stuff with the real world price you're paying, particularly

525
00:30:30,920 --> 00:30:33,200
Speaker 1: if you're spending more money so that you get extra

526
00:30:33,240 --> 00:30:36,480
Speaker 1: poker coins with your purchase. Now it might sound like

527
00:30:36,560 --> 00:30:39,680
Speaker 1: I'm saying Niantic is trying to trick players by creating

528
00:30:39,720 --> 00:30:42,880
Speaker 1: a reward system that triggers a desire in players to

529
00:30:42,960 --> 00:30:46,280
Speaker 1: make purchases and then increases their chances of getting rewards,

530
00:30:46,520 --> 00:30:49,560
Speaker 1: coupled with using in game currency to put some distance

531
00:30:49,560 --> 00:30:52,960
Speaker 1: between an in game item's real world cost or price

532
00:30:53,040 --> 00:30:56,680
Speaker 1: tag and the player's awareness of that. And I guess

533
00:30:56,680 --> 00:30:58,719
Speaker 1: that is one way to look at it. However, this

534
00:30:58,800 --> 00:31:01,760
Speaker 1: is also a very common an approach with smartphone games

535
00:31:01,760 --> 00:31:05,600
Speaker 1: in particular. Heck, the one I alluded to earlier uses

536
00:31:05,640 --> 00:31:08,800
Speaker 1: a very similar process, and in fact it has multiple

537
00:31:09,000 --> 00:31:12,800
Speaker 1: in game currencies. Pokemon go at least keeps itself to

538
00:31:12,960 --> 00:31:15,960
Speaker 1: the one means of in game exchange for the store.

539
00:31:16,480 --> 00:31:19,680
Speaker 1: Some games might have four or five different methods, which

540
00:31:19,720 --> 00:31:23,640
Speaker 1: I would argue makes them even more guilty of fleecing players.

541
00:31:24,080 --> 00:31:26,240
Speaker 1: Like I said, the game I play does this, which, yeah,

542
00:31:26,240 --> 00:31:29,320
Speaker 1: I can sometimes feel a little gross or at least exploitative.

543
00:31:29,880 --> 00:31:33,840
Speaker 1: But whatever you think about the revenue model of micro transactions,

544
00:31:33,840 --> 00:31:35,600
Speaker 1: whether you think it's great or it's not, you have

545
00:31:35,640 --> 00:31:41,520
Speaker 1: to admit it works. In its first month, Pokemon Go

546
00:31:42,160 --> 00:31:47,880
Speaker 1: generated two hundred seven million dollars in revenue, which at

547
00:31:47,920 --> 00:31:50,760
Speaker 1: the time was the most money a mobile game had

548
00:31:50,800 --> 00:31:53,840
Speaker 1: made within a month of launch. And that's made all

549
00:31:53,880 --> 00:31:57,040
Speaker 1: the more remarkable when you consider that Niantic rolled out

550
00:31:57,080 --> 00:32:00,880
Speaker 1: the game gradually across different regions. It was not available

551
00:32:01,040 --> 00:32:06,120
Speaker 1: globally right away. The game launched in July, and by

552
00:32:06,160 --> 00:32:10,200
Speaker 1: September of that year, Niantics saw more than five hundred

553
00:32:10,240 --> 00:32:14,840
Speaker 1: million downloads. By July, one year after launch, it had

554
00:32:14,880 --> 00:32:19,040
Speaker 1: been downloaded seven hundred fifty million times. Most of the

555
00:32:19,080 --> 00:32:22,440
Speaker 1: downloads were on Android devices. There was a nearly seventy

556
00:32:22,600 --> 00:32:27,000
Speaker 1: thirty split between Android and iOS, which actually find pretty interesting.

557
00:32:27,600 --> 00:32:31,280
Speaker 1: Generally speaking, the trend is that you see more in

558
00:32:31,480 --> 00:32:35,480
Speaker 1: app purchases on apps that are running on iOS. It

559
00:32:35,600 --> 00:32:41,840
Speaker 1: just seems like Apple users tend to be more um

560
00:32:41,880 --> 00:32:46,479
Speaker 1: inclined to make in app purchases. So while Android phones

561
00:32:46,840 --> 00:32:50,600
Speaker 1: vastly outnumber iOS devices throughout the world, I mean, there's

562
00:32:50,600 --> 00:32:53,480
Speaker 1: just way more Android devices than there are iOS devices.

563
00:32:53,880 --> 00:32:57,479
Speaker 1: On the flip side, Apple users tend to spend more

564
00:32:57,520 --> 00:33:01,360
Speaker 1: money on apps and in apps than Android users do,

565
00:33:01,480 --> 00:33:04,200
Speaker 1: so I just found it really interesting that here we

566
00:33:04,240 --> 00:33:08,440
Speaker 1: saw seventy thirty split between Android and iOS in the

567
00:33:08,440 --> 00:33:13,600
Speaker 1: devices running Pokemon Go, and yet there's this incredible amount

568
00:33:13,800 --> 00:33:17,440
Speaker 1: of in game purchases going on, which you wouldn't expect

569
00:33:17,960 --> 00:33:22,640
Speaker 1: given that split. Well, adoption dropped off fairly sharply after

570
00:33:22,800 --> 00:33:26,840
Speaker 1: Pokemon first debuted, and some players dropped off the game

571
00:33:27,120 --> 00:33:30,680
Speaker 1: entirely over time, including myself, but Pokemon goes still proved

572
00:33:30,680 --> 00:33:35,440
Speaker 1: to be incredibly profitable. There was a dip in spending

573
00:33:35,520 --> 00:33:39,120
Speaker 1: in ten players were spending less on average in twenty seventeen,

574
00:33:39,160 --> 00:33:43,560
Speaker 1: but after that Niantics saw spending increase year over year.

575
00:33:43,920 --> 00:33:49,880
Speaker 1: In twenty nineteen, Pokemon Go brought in eight hundred ninety

576
00:33:50,000 --> 00:33:55,520
Speaker 1: four million dollars in revenue. A truly staggering amount. But

577
00:33:56,280 --> 00:33:59,240
Speaker 1: learning that bit didn't surprise me nearly as much as

578
00:33:59,400 --> 00:34:03,280
Speaker 1: what happened in twenty twenty. So, of course we had

579
00:34:03,320 --> 00:34:06,560
Speaker 1: the pandemic hit in and with much of the world

580
00:34:06,640 --> 00:34:10,719
Speaker 1: going into lockdown and isolation by March or April of

581
00:34:12,360 --> 00:34:15,760
Speaker 1: it meant that I would think Pokemon Go would have suffered.

582
00:34:15,840 --> 00:34:18,759
Speaker 1: This is a game that encourages players to go outside

583
00:34:18,800 --> 00:34:21,520
Speaker 1: and walk around in the real world in order to

584
00:34:21,600 --> 00:34:24,640
Speaker 1: encounter Pokemon within the game and then catch them. You

585
00:34:24,680 --> 00:34:28,000
Speaker 1: would think that you would have an enormous hit on

586
00:34:28,120 --> 00:34:32,120
Speaker 1: revenue when people weren't leaving their houses. I was expecting

587
00:34:32,160 --> 00:34:34,680
Speaker 1: to see a really big dep How could a game

588
00:34:35,080 --> 00:34:39,120
Speaker 1: so reliant on physical location be a success in a

589
00:34:39,200 --> 00:34:43,120
Speaker 1: year when most people weren't actually going anywhere. Well, I

590
00:34:43,200 --> 00:34:47,319
Speaker 1: was a percent wrong, because by November of twenty ten

591
00:34:47,440 --> 00:34:50,320
Speaker 1: months into the year, not even a full year, Niantic

592
00:34:50,440 --> 00:34:55,640
Speaker 1: posted one billion dollars in revenue from Pokemon Go a

593
00:34:55,920 --> 00:35:01,000
Speaker 1: billion dollars from in app purchases in a mobile game.

594
00:35:01,440 --> 00:35:04,399
Speaker 1: Upon further exploration, I started again an understanding of what

595
00:35:04,480 --> 00:35:07,160
Speaker 1: was going on. People were spending more time on their

596
00:35:07,200 --> 00:35:10,960
Speaker 1: phones in lockdown, so they were downloading more entertainment like

597
00:35:11,080 --> 00:35:16,040
Speaker 1: games to mobile devices, and Niantic very very smartly implemented

598
00:35:16,120 --> 00:35:19,839
Speaker 1: numerous features to let players have virtual experiences and play

599
00:35:19,880 --> 00:35:23,000
Speaker 1: the game without actually having to leave the safety of

600
00:35:23,080 --> 00:35:26,560
Speaker 1: their homes. One of the big changes was in how

601
00:35:26,600 --> 00:35:31,080
Speaker 1: an in game item called incense works, and essentially, incense

602
00:35:31,440 --> 00:35:34,680
Speaker 1: attracts Pokemon to your location. Really, it just means that

603
00:35:34,719 --> 00:35:38,640
Speaker 1: Pokemon spawn at wherever you are for a set amount

604
00:35:38,600 --> 00:35:41,920
Speaker 1: of time, like half an hour, and for those thirty minutes,

605
00:35:41,960 --> 00:35:45,279
Speaker 1: you're gonna see way more Pokemon spawn around you than

606
00:35:45,320 --> 00:35:47,560
Speaker 1: you normally would, and it gives you a chance to

607
00:35:47,600 --> 00:35:52,600
Speaker 1: collect Pokemon without having to wander physically around your region.

608
00:35:53,040 --> 00:35:56,520
Speaker 1: Niantic boosted the effects of incense during lockdown. They also

609
00:35:56,600 --> 00:35:59,959
Speaker 1: boosted the effects of other in game items, which allow

610
00:36:00,120 --> 00:36:03,279
Speaker 1: players to experience the game from home as long as

611
00:36:03,360 --> 00:36:05,759
Speaker 1: they had those items that is. And how did you

612
00:36:05,760 --> 00:36:09,120
Speaker 1: get those items? Mostly you did it by buying poke

613
00:36:09,200 --> 00:36:11,719
Speaker 1: coins and then using the poke coins to purchase the

614
00:36:11,760 --> 00:36:15,000
Speaker 1: items you wanted in the in game store. Of course, now,

615
00:36:15,000 --> 00:36:17,120
Speaker 1: I've got a lot more to say about Niantic, but

616
00:36:17,320 --> 00:36:28,480
Speaker 1: first let's take another quick break over the course of

617
00:36:28,520 --> 00:36:32,399
Speaker 1: its existence so far, Pokemon Go has generated more than

618
00:36:32,520 --> 00:36:37,120
Speaker 1: four billion dollars in revenue. The US leads the way

619
00:36:37,160 --> 00:36:39,920
Speaker 1: in terms of spending on the game, and Japan is

620
00:36:39,960 --> 00:36:43,560
Speaker 1: not that far behind. Upon initial release, the amount of

621
00:36:43,560 --> 00:36:48,920
Speaker 1: gameplay and Pokemon Go was fairly limited. You could capture Pokemon,

622
00:36:49,440 --> 00:36:53,120
Speaker 1: you could evolve them over time using an in game

623
00:36:53,160 --> 00:36:56,000
Speaker 1: resource called star dust. More on that in a second.

624
00:36:56,640 --> 00:36:59,480
Speaker 1: You could attempt to take over gems so that your

625
00:36:59,560 --> 00:37:03,200
Speaker 1: facts and could control them. You know, the three factions

626
00:37:03,280 --> 00:37:06,520
Speaker 1: or teams and Pokemon Go, but you couldn't battle head

627
00:37:06,560 --> 00:37:10,360
Speaker 1: to head with other players, nor could you trade pokemon in.

628
00:37:11,640 --> 00:37:15,080
Speaker 1: Niantic finally introduced trading, but it was not as simple

629
00:37:15,120 --> 00:37:18,960
Speaker 1: as swapping one Pokemon for another. To trade, you had

630
00:37:18,960 --> 00:37:22,640
Speaker 1: to meet some other criteria first. Both players that would

631
00:37:22,719 --> 00:37:25,440
Speaker 1: enter into a trade would first have to become friends

632
00:37:25,480 --> 00:37:29,280
Speaker 1: with each other, which involves sending and accepting friend requests,

633
00:37:29,400 --> 00:37:33,840
Speaker 1: using a unique identifier to link the two accounts together

634
00:37:33,920 --> 00:37:37,520
Speaker 1: as friends, and that establishes a connection. Both friends would

635
00:37:37,560 --> 00:37:40,040
Speaker 1: need to be within one dred meters of each other

636
00:37:40,120 --> 00:37:43,080
Speaker 1: in real life before making a trade. At least before

637
00:37:43,080 --> 00:37:45,520
Speaker 1: the pandemic. They had to do that, and you needed

638
00:37:45,560 --> 00:37:48,400
Speaker 1: a certain amount of star dust to power that trade.

639
00:37:48,680 --> 00:37:50,760
Speaker 1: Like I said, star dust is an in game element

640
00:37:50,760 --> 00:37:55,200
Speaker 1: in Pokemon Go that typically you use to level up

641
00:37:55,440 --> 00:38:00,120
Speaker 1: captured Pokemon. So let's say I caught a Charmnder and

642
00:38:00,120 --> 00:38:03,239
Speaker 1: to power up my char Mander and evolve it up

643
00:38:03,239 --> 00:38:07,400
Speaker 1: to a char million and then ultimately up to a Charizard,

644
00:38:07,600 --> 00:38:10,760
Speaker 1: I need to collect enough star dust to power that transformation.

645
00:38:11,480 --> 00:38:14,560
Speaker 1: And um, you collect star dust through playing the game.

646
00:38:14,760 --> 00:38:18,040
Speaker 1: But trading likewise requires a certain amount of stardust to

647
00:38:18,160 --> 00:38:21,880
Speaker 1: allow you to trade a Pokemon to another player. The

648
00:38:21,960 --> 00:38:25,520
Speaker 1: more rare the Pokemon, the more stardust is actually needed

649
00:38:25,640 --> 00:38:28,920
Speaker 1: to make a trade happen. Now complicating this is that

650
00:38:29,000 --> 00:38:32,879
Speaker 1: friendship isn't just a binary element in Pokemon. It's not

651
00:38:33,000 --> 00:38:36,760
Speaker 1: either you're my friend or you're not. Friendship has tears

652
00:38:36,800 --> 00:38:39,520
Speaker 1: to it, meaning that over time you can boost your

653
00:38:39,520 --> 00:38:42,320
Speaker 1: friendship levels literally over time. The longer you are friends

654
00:38:42,320 --> 00:38:45,719
Speaker 1: with somebody, the higher your friendship value is. It's kind

655
00:38:45,760 --> 00:38:49,160
Speaker 1: of like going from an acquaintance to a friend to

656
00:38:49,480 --> 00:38:53,040
Speaker 1: b FF two. Seriously, can you help me hide this body?

657
00:38:54,040 --> 00:38:56,160
Speaker 1: I might be revealing too much about how I rank

658
00:38:56,239 --> 00:39:00,440
Speaker 1: my friends. Anyway, With higher friendship levels, the startup cost

659
00:39:00,480 --> 00:39:03,920
Speaker 1: for trading starts to come down. So the same trade

660
00:39:04,320 --> 00:39:06,920
Speaker 1: with one person who's just like an acquaintance level is

661
00:39:06,920 --> 00:39:10,160
Speaker 1: going to cost you more stardust than that exact same

662
00:39:10,200 --> 00:39:13,719
Speaker 1: trade with your BFF it'll be less stardust. So if

663
00:39:13,719 --> 00:39:15,840
Speaker 1: you're training with a really good friend, you aren't spending

664
00:39:15,880 --> 00:39:18,960
Speaker 1: quite as much star dust to make it happen. In addition,

665
00:39:19,280 --> 00:39:22,919
Speaker 1: sometimes during play you might encounter a gift item out

666
00:39:22,920 --> 00:39:25,440
Speaker 1: in the wild, and gift items are meant to be

667
00:39:25,520 --> 00:39:29,120
Speaker 1: given to your friends. So if I find a gift item,

668
00:39:29,239 --> 00:39:31,600
Speaker 1: I would not be able to open it for myself.

669
00:39:32,040 --> 00:39:34,000
Speaker 1: I could however, send it on to one of my

670
00:39:34,040 --> 00:39:37,239
Speaker 1: friends who also plays the game, and they would not

671
00:39:37,360 --> 00:39:41,000
Speaker 1: only receive this gift uh, they would then be able

672
00:39:41,000 --> 00:39:43,240
Speaker 1: to open it and there would be some useful items

673
00:39:43,239 --> 00:39:45,799
Speaker 1: in there that they could then put to use within

674
00:39:45,840 --> 00:39:49,640
Speaker 1: the game themselves. The gameplay mechanics of trading are a

675
00:39:49,640 --> 00:39:52,200
Speaker 1: bit convoluted, but they also help avoid the issues you

676
00:39:52,239 --> 00:39:54,760
Speaker 1: would have if there were kind of a no holds

677
00:39:54,840 --> 00:39:58,200
Speaker 1: barred approach. In that case, players could end up spoofing

678
00:39:58,280 --> 00:40:00,839
Speaker 1: multiple accounts and then just te eating back and forth

679
00:40:00,920 --> 00:40:04,759
Speaker 1: with themselves in order to essentially cheat their way toward dominance.

680
00:40:05,320 --> 00:40:08,040
Speaker 1: And heck, with that reward cycle built into games, you

681
00:40:08,040 --> 00:40:10,480
Speaker 1: can see why people would actually do this. They're chasing

682
00:40:10,480 --> 00:40:15,440
Speaker 1: that high of a perceived achievement. A reward doesn't matter

683
00:40:15,560 --> 00:40:18,279
Speaker 1: if they had to take shortcuts to get there. Now

684
00:40:18,320 --> 00:40:21,239
Speaker 1: I'm getting toward the end of this episode, so I

685
00:40:21,280 --> 00:40:24,160
Speaker 1: need to switch gears for a minute and talk about

686
00:40:24,239 --> 00:40:29,400
Speaker 1: niantics other game they've launched since Pokemon Go. So there's Ingress,

687
00:40:29,719 --> 00:40:32,080
Speaker 1: which is still going today, that was their first big

688
00:40:32,160 --> 00:40:36,040
Speaker 1: public game. There's Pokemon Go, and then there's another huge

689
00:40:36,120 --> 00:40:39,240
Speaker 1: I p that partnered with Niantic to create an augmented

690
00:40:39,280 --> 00:40:43,000
Speaker 1: reality mobile game that everyone at the time was thinking

691
00:40:43,000 --> 00:40:46,040
Speaker 1: could be even bigger than Pokemon Go, and that would

692
00:40:46,120 --> 00:40:50,600
Speaker 1: be Harry Potter. Uh. The game that Niantic created is

693
00:40:50,640 --> 00:40:55,080
Speaker 1: called Harry Potter Wizards Unite. The World first learned about

694
00:40:55,120 --> 00:40:59,440
Speaker 1: this partnership back in November, just a little more than

695
00:40:59,480 --> 00:41:02,640
Speaker 1: a year after Pokemon Go had launched. According to the

696
00:41:02,680 --> 00:41:06,480
Speaker 1: press release, Niantic promised a game in which quote players

697
00:41:06,480 --> 00:41:10,320
Speaker 1: will learn spells, explore their real world neighborhoods and cities

698
00:41:10,480 --> 00:41:13,560
Speaker 1: to discover and fight legendary beasts, and team up with

699
00:41:13,600 --> 00:41:16,880
Speaker 1: others to take down powerful enemies. End quote from the

700
00:41:16,880 --> 00:41:20,040
Speaker 1: press release. It sounded like this would be in many

701
00:41:20,080 --> 00:41:23,440
Speaker 1: ways very similar to Pokemon Go, but with a Harry

702
00:41:23,480 --> 00:41:26,960
Speaker 1: Potter kind of overlay, and Pokemon Go players choose one

703
00:41:27,000 --> 00:41:30,160
Speaker 1: of three teams to join their either Team Valor, Team

704
00:41:30,160 --> 00:41:34,800
Speaker 1: Instinct or Team Mystic. There's no option to join Team Rocket,

705
00:41:34,920 --> 00:41:38,440
Speaker 1: and yes I have written letters about it. These are

706
00:41:38,480 --> 00:41:41,239
Speaker 1: the teams that compete to control sites like gems, which

707
00:41:41,239 --> 00:41:43,560
Speaker 1: are tied to points of interest in the real world,

708
00:41:43,840 --> 00:41:47,240
Speaker 1: and Harry Potter would change that up so that instead

709
00:41:47,280 --> 00:41:50,040
Speaker 1: of Team Valerie, Team Instinctive, Team Mystic, you would choose

710
00:41:50,040 --> 00:41:53,800
Speaker 1: one of the four Houses and Hogwarts, so of course Slytherin,

711
00:41:54,000 --> 00:41:57,600
Speaker 1: which we all know is the best house, Raven Claude, Griffin, Door,

712
00:41:57,719 --> 00:42:01,480
Speaker 1: or Hufflepuff. When the game finally law punched in twenty nineteen,

713
00:42:01,520 --> 00:42:05,080
Speaker 1: two years later, this was essentially confirmed, and in addition,

714
00:42:05,160 --> 00:42:08,120
Speaker 1: players the game can choose a profession. The three professions

715
00:42:08,160 --> 00:42:13,720
Speaker 1: are magic, zoologist, orror, or professor. They can also select

716
00:42:13,920 --> 00:42:17,160
Speaker 1: their own wands, which frankly is against Cannon because we

717
00:42:17,200 --> 00:42:20,840
Speaker 1: all know the wand chooses you, but then the ones

718
00:42:21,040 --> 00:42:23,319
Speaker 1: don't have any real effect. On gameplay at all. They're

719
00:42:23,320 --> 00:42:28,200
Speaker 1: purely cosmetics, so it's not like it actually matters beyond aesthetics.

720
00:42:28,200 --> 00:42:31,680
Speaker 1: Like Pokemon Go, the intended gameplay for Harry Potter Wizards

721
00:42:31,760 --> 00:42:35,520
Speaker 1: Unite is to walk around your real environment and encounter

722
00:42:35,960 --> 00:42:40,520
Speaker 1: confounded creatures or items. You are then to cast spells

723
00:42:40,600 --> 00:42:45,880
Speaker 1: to reverse this confounding curse on these things, and casting

724
00:42:45,920 --> 00:42:50,000
Speaker 1: spells involves tracing a pattern shown on your screen dependent

725
00:42:50,080 --> 00:42:54,560
Speaker 1: upon whichever spell you're casting, and different ones have different powers. Uh,

726
00:42:54,640 --> 00:42:57,080
Speaker 1: it's kind of like Pokemon Go. You can actually have

727
00:42:57,120 --> 00:42:58,759
Speaker 1: the set to a R mode so that you get

728
00:42:58,800 --> 00:43:02,719
Speaker 1: a digital overlay of critters that appear to be in

729
00:43:02,800 --> 00:43:05,920
Speaker 1: your real world environment, or you can just turn that

730
00:43:05,960 --> 00:43:08,640
Speaker 1: off Savior Battery life and just play on the screen.

731
00:43:09,360 --> 00:43:13,520
Speaker 1: Tracing the pattern correctly increases your chances of unconfounding things,

732
00:43:13,600 --> 00:43:17,000
Speaker 1: or at least that's what's supposed to do. In my experience,

733
00:43:17,280 --> 00:43:20,840
Speaker 1: the gesture detection is a little bit wonky, and sometimes

734
00:43:20,880 --> 00:43:23,000
Speaker 1: I'm told that I didn't do a very good job

735
00:43:23,040 --> 00:43:26,120
Speaker 1: when I am sure I nailed that gesture, and other

736
00:43:26,160 --> 00:43:30,480
Speaker 1: times I'm like, whoo, I really really messed that one up,

737
00:43:30,800 --> 00:43:33,680
Speaker 1: and yet get a perfect result. So there's a lack

738
00:43:33,719 --> 00:43:36,480
Speaker 1: of consistency there now. Granted, I have not played this

739
00:43:36,560 --> 00:43:39,800
Speaker 1: game in a long long time, so it may be

740
00:43:40,000 --> 00:43:42,560
Speaker 1: that it has improved over time, but when it first

741
00:43:42,600 --> 00:43:45,719
Speaker 1: launched I was having real issues. The game has a

742
00:43:45,719 --> 00:43:47,759
Speaker 1: lot of other gameplay features in it, many of which

743
00:43:47,800 --> 00:43:51,000
Speaker 1: are clever and fun when you can, you know, go

744
00:43:51,080 --> 00:43:54,120
Speaker 1: outside without a care in the world. So, for example,

745
00:43:54,640 --> 00:43:57,799
Speaker 1: they have port keys in this game, and you can

746
00:43:58,160 --> 00:44:00,920
Speaker 1: find a port key essentially like a chest, and you

747
00:44:00,920 --> 00:44:03,480
Speaker 1: can open it with a one of your keys, and

748
00:44:03,520 --> 00:44:08,120
Speaker 1: that creates a portal, uh that appears in your view,

749
00:44:08,480 --> 00:44:10,239
Speaker 1: so you can actually hold your phone up and you

750
00:44:10,239 --> 00:44:12,840
Speaker 1: see that there's a portal in front of you. To

751
00:44:12,920 --> 00:44:15,120
Speaker 1: go through the portal, you actually do have to take

752
00:44:15,200 --> 00:44:18,759
Speaker 1: steps and walk through the thing, which is why I

753
00:44:18,800 --> 00:44:21,840
Speaker 1: recommend that you do this somewhere really safe, like not

754
00:44:22,120 --> 00:44:24,520
Speaker 1: next to a busy road where the portal would have

755
00:44:24,560 --> 00:44:28,000
Speaker 1: you walk into traffic. Anyway, once you go through the portal,

756
00:44:28,280 --> 00:44:30,840
Speaker 1: you collect in game stuff that gives you special items

757
00:44:30,880 --> 00:44:35,000
Speaker 1: that you can use within the game play. Like Pokemon Go,

758
00:44:35,120 --> 00:44:37,319
Speaker 1: you can also purchase things within the game to give

759
00:44:37,320 --> 00:44:41,160
Speaker 1: you boosts and unlocked items much more quickly. The launch

760
00:44:41,160 --> 00:44:44,120
Speaker 1: of Wizards Unite was a far cry from what Niantics

761
00:44:44,120 --> 00:44:48,200
Speaker 1: saw with Pokemon Go. With Pokemon, Niantic generated more than

762
00:44:48,200 --> 00:44:51,560
Speaker 1: two hundred million dollars in revenue in that launch month.

763
00:44:51,880 --> 00:44:57,120
Speaker 1: Harry Potter was closer to twelve million dollars. Now that's

764
00:44:57,160 --> 00:44:59,239
Speaker 1: not chump change. Don't get me wrong. I would love

765
00:44:59,320 --> 00:45:03,799
Speaker 1: twelve dollars, but it wasn't a grand slam home runs

766
00:45:03,880 --> 00:45:06,839
Speaker 1: the way that Pokemon Go was. You know, everyone was thinking,

767
00:45:06,840 --> 00:45:12,000
Speaker 1: Harry Potter is such a recognizable intellectual property, for sure,

768
00:45:12,040 --> 00:45:15,600
Speaker 1: this game is gonna be just a license to print money.

769
00:45:15,719 --> 00:45:18,719
Speaker 1: Um So, while the Harry Potter franchise is huge and

770
00:45:18,719 --> 00:45:22,439
Speaker 1: and is bigger than Pokemon, has a rabid fan base

771
00:45:22,480 --> 00:45:25,160
Speaker 1: as well, but the game just didn't see as much

772
00:45:25,239 --> 00:45:29,200
Speaker 1: adoption early on. Whether that was because of a failure

773
00:45:29,239 --> 00:45:32,480
Speaker 1: in marketing or just a lack of interest among Harry

774
00:45:32,480 --> 00:45:36,080
Speaker 1: Potter fans, I can't say. Maybe Pokemon fans were already

775
00:45:36,160 --> 00:45:40,560
Speaker 1: used to interacting with Pokemon within the context of the

776
00:45:40,640 --> 00:45:45,600
Speaker 1: game world and the game like like revenue structure, so

777
00:45:45,760 --> 00:45:48,840
Speaker 1: the transition to playing Pokemon but in the real world

778
00:45:49,160 --> 00:45:51,840
Speaker 1: had a greater appeal for those folks. But whatever the

779
00:45:51,880 --> 00:45:54,799
Speaker 1: reason Harry Potter has not paid off the same way

780
00:45:54,840 --> 00:45:59,279
Speaker 1: Pokemon has. Nyantik, however, continues to develop games, you know,

781
00:45:59,400 --> 00:46:04,040
Speaker 1: in between cashing enormous checks from Pokemon Go. Next up

782
00:46:04,160 --> 00:46:06,600
Speaker 1: is a game that's based around the popular board game

783
00:46:06,640 --> 00:46:10,200
Speaker 1: Settlers of Katan, which you know. I've never actually played.

784
00:46:10,680 --> 00:46:12,200
Speaker 1: I think that means I have to hand over my

785
00:46:12,280 --> 00:46:15,360
Speaker 1: geek card. I know we've got some Katan players in

786
00:46:15,400 --> 00:46:18,560
Speaker 1: our office. I think Tyler and Matt might play it,

787
00:46:18,960 --> 00:46:21,000
Speaker 1: but I have never sat down to a session. I

788
00:46:21,040 --> 00:46:23,960
Speaker 1: only have a vague idea of how the game works. Anyway.

789
00:46:24,320 --> 00:46:27,720
Speaker 1: Nyantick announced it was working on this Katan related title

790
00:46:27,760 --> 00:46:31,080
Speaker 1: back in November twenty nineteen, but we haven't yet seen

791
00:46:31,120 --> 00:46:35,360
Speaker 1: the game come out, presumably really through a wrench in

792
00:46:35,400 --> 00:46:38,080
Speaker 1: the works because Niantic had to dedicate a lot of

793
00:46:38,120 --> 00:46:42,560
Speaker 1: resources toward optimizing Pokemon Go and Harry Potter in order

794
00:46:42,640 --> 00:46:46,800
Speaker 1: to have the play at home approach. Very very recently,

795
00:46:46,880 --> 00:46:50,520
Speaker 1: just back in March of this year, this year being one,

796
00:46:50,560 --> 00:46:53,360
Speaker 1: in case you're listening to this from the future, Niantick

797
00:46:53,400 --> 00:46:56,640
Speaker 1: announced it was making a game in the Pickman franchise.

798
00:46:56,960 --> 00:46:59,760
Speaker 1: This game will come out of the Tokyo based branch

799
00:46:59,840 --> 00:47:03,920
Speaker 1: of Niantic, which was first set up back in but

800
00:47:04,000 --> 00:47:06,239
Speaker 1: I think it's safe to say that the bread and

801
00:47:06,320 --> 00:47:09,640
Speaker 1: butter of Niantic continues to be Pokemon Go. While the

802
00:47:09,680 --> 00:47:13,120
Speaker 1: game saw a lot of players migrate away, particularly before

803
00:47:13,160 --> 00:47:17,120
Speaker 1: stuff like trading was introduced, Niantic has incorporated a lot

804
00:47:17,160 --> 00:47:20,840
Speaker 1: of in game and real world incentives to bring people

805
00:47:20,880 --> 00:47:25,000
Speaker 1: on board and to keep existing players engaged. That includes

806
00:47:25,040 --> 00:47:29,759
Speaker 1: introducing more Pokemon. There are hundreds of Pokemon, and it's

807
00:47:29,800 --> 00:47:33,560
Speaker 1: kind of like controlled releases. So the initial Pokemon that

808
00:47:33,640 --> 00:47:37,680
Speaker 1: were available in Pokemon Go, we're all like first edition Pokemon,

809
00:47:38,160 --> 00:47:41,319
Speaker 1: but lots of them have been introduced over subsequent games,

810
00:47:41,360 --> 00:47:45,040
Speaker 1: and Pokemon Go has capitalized on that. Uh. They also

811
00:47:45,080 --> 00:47:48,840
Speaker 1: have held really large events which used to be you know, physical.

812
00:47:48,880 --> 00:47:51,920
Speaker 1: It used to bring people together in the same physical location.

813
00:47:52,280 --> 00:47:55,440
Speaker 1: These days they run more towards the virtual. However, some

814
00:47:55,480 --> 00:47:58,920
Speaker 1: people have started using Pokemon recently as you know, an

815
00:47:58,960 --> 00:48:02,120
Speaker 1: excuse to get out in the world again as vaccination

816
00:48:02,200 --> 00:48:05,320
Speaker 1: numbers are on the rise. And of course it also

817
00:48:05,480 --> 00:48:09,560
Speaker 1: has included finding incentives to encourage players to purchase those

818
00:48:09,640 --> 00:48:13,280
Speaker 1: dang poker coins. Now, I would say that the augmented

819
00:48:13,320 --> 00:48:16,280
Speaker 1: reality nature of these games is a fairly light touch,

820
00:48:16,400 --> 00:48:20,400
Speaker 1: particularly in the pandemic. The game world does correlate in

821
00:48:20,520 --> 00:48:23,120
Speaker 1: some measure to the real world. I mean, you can

822
00:48:23,160 --> 00:48:26,359
Speaker 1: only encounter certain things within the Niantic games based on

823
00:48:26,440 --> 00:48:30,839
Speaker 1: where you are physically on Earth. You can't find Mr

824
00:48:30,880 --> 00:48:34,040
Speaker 1: Mime in the USA, you can't find Taurus in Asia

825
00:48:34,200 --> 00:48:36,840
Speaker 1: unless you're trying to cheat the system through spoofing your location.

826
00:48:37,239 --> 00:48:39,279
Speaker 1: But I think most folks turn off the A OUR

827
00:48:39,440 --> 00:48:43,080
Speaker 1: view of gameplay to conserve battery life, so that augmented

828
00:48:43,160 --> 00:48:46,200
Speaker 1: reality part of the game is really more about just

829
00:48:46,280 --> 00:48:49,920
Speaker 1: wandering around in an effort to encounter more game elements.

830
00:48:50,520 --> 00:48:54,080
Speaker 1: But you aren't experiencing the game as if it's overlaid

831
00:48:54,120 --> 00:48:57,319
Speaker 1: on top of the reality you exist within. So it's

832
00:48:57,600 --> 00:49:00,400
Speaker 1: kind of a baby step in a R. But the

833
00:49:00,440 --> 00:49:03,439
Speaker 1: success of Pokemon Go indicates that there just might be

834
00:49:03,520 --> 00:49:07,440
Speaker 1: something too augmented reality games. Clearly, the best approach is

835
00:49:07,480 --> 00:49:11,160
Speaker 1: going to require the right i P, the right gameplay mechanics,

836
00:49:11,320 --> 00:49:14,560
Speaker 1: the right technology to create the a R experience, and

837
00:49:14,600 --> 00:49:17,960
Speaker 1: the right integration of digital elements with the real world.

838
00:49:18,360 --> 00:49:21,600
Speaker 1: And that is a secret sauce that's really hard to achieve.

839
00:49:21,800 --> 00:49:24,239
Speaker 1: I mean, even if we just look at Niantic, they've

840
00:49:24,320 --> 00:49:28,040
Speaker 1: really only hit the jackpot once, and even Harry Potter,

841
00:49:28,320 --> 00:49:31,880
Speaker 1: which seemed like a guaranteed success story and came after

842
00:49:32,040 --> 00:49:35,680
Speaker 1: Pokemon Go did, just hasn't made a huge splash compared

843
00:49:35,719 --> 00:49:38,319
Speaker 1: to Pokemon So it might be a while before we

844
00:49:38,360 --> 00:49:44,960
Speaker 1: see another real juggernaut in the space. Oh Marvel augmented

845
00:49:45,000 --> 00:49:48,719
Speaker 1: reality game, Now, I'd be so into that. But that

846
00:49:48,719 --> 00:49:52,839
Speaker 1: wraps up our episodes about Niantic. The company, as I said,

847
00:49:53,000 --> 00:49:56,480
Speaker 1: is still going like gangbusters, still developing games, and still

848
00:49:56,680 --> 00:49:59,680
Speaker 1: making an enormous amount of revenue from Pokemon Go, so

849
00:49:59,719 --> 00:50:02,360
Speaker 1: we're likely to see them be a big player for

850
00:50:02,440 --> 00:50:06,760
Speaker 1: some time now. Hopefully they'll continue to innovate. I would

851
00:50:06,760 --> 00:50:09,800
Speaker 1: hate to see it by a company that just relies

852
00:50:09,840 --> 00:50:14,520
Speaker 1: solely upon Pokemon Go, but as we've seen, repeating success

853
00:50:14,600 --> 00:50:18,040
Speaker 1: is never a guarantee. I hope you enjoyed these episodes.

854
00:50:18,080 --> 00:50:20,160
Speaker 1: If you have suggestions for topics I should cover in

855
00:50:20,200 --> 00:50:22,680
Speaker 1: future episodes of tech Stuff, reach out to me on Twitter.

856
00:50:22,960 --> 00:50:26,839
Speaker 1: The handle is text Stuff h s W and I'll

857
00:50:26,880 --> 00:50:35,319
Speaker 1: talk to you again really soon. Text Stuff is an

858
00:50:35,320 --> 00:50:39,040
Speaker 1: I Heart radio production. For more podcasts from My Heart radio,

859
00:50:39,360 --> 00:50:42,520
Speaker 1: visit the I heart Radio app, Apple podcasts, or wherever

860
00:50:42,600 --> 00:50:44,120
Speaker 1: you listen to your favorite shows.