What we can learn about customers from the bizarre economics of Pokemon Go
Pokecoins are the in-game currency in Pokemon Go, used to buy gameplay and aesthetic items. Pokecoins can be earned in-game or bought for real-world money. Below is a screenshot of the Pokemon Go Shop. Which of the six options do you think is the most economical?
Instinct says it’s the one on the bottom right: it’s the most expensive, and gets you the most coins. That’s how buying in bulk works in the real world. So, instinctively, that’s the one I’d go for if I wanted the best deal.
But if you look more closely you’ll see that my instinct is wrong.
The most economical option is to spend the smallest amount: less than a dollar.
Rather than writing a post about why this is wrong, let’s assume the creators of Pokemon Go are geniuses. Let’s instead consider why they are right and what we can learn from it.
[Note that the pricing above is Australian. I assume the pattern is the same in other currencies.]
Why the price is right
- Low barrier to purchase
- Habit-forming behaviour
- No drawbacks for the company
1 . Ninety-nine cents is a pretty low barrier for most Pokemon Go players, 78% of whom are aged 18+, and whose average annual income was $90k shortly after launch. For those players, spending “less than a dollar” on the game is unlikely to raise any emotional warnings or guilt. After all, it’s less than the cost of one coffee, and represents two days’ worth of coins (players can ‘earn’ a maximum of 50 coins per day). Compare that with the second option: nearly $8. That’s lunch. That’s real money. I don’t know if I want it that bad.
If the goal is to make it easy to click the “buy” button (which I assume it is because otherwise the Pokemon people don’t get any money) then $0.99 is a good price point.
“A couple of weeks after…