Pokémon Go is many things: A surreal cultural phenomenon, a staggeringly successful new business, an armed robber’s best friend, and a buggy mess and an arguably not very good game.
But to Google it’s something else: Proof that the app ecosystem is still brimming with opportunity, at a time when observers are arguing that the boom years of the new digital economy are now firmly behind it.
"If you can find that … niche, that experience, that’s new — that goes wildfire," Mark Bennett, the international director of Google Play, told Business Insider.
Apps aren't the hot new thing any more.
Is the app boom over? Peter Kafka, a technology reporter over at Recode, certainly thinks so. "The mobile app boom … is now over," he argued in an article published in June. "People are still making plenty of apps of course. And many people are still downloading them. But the go-go-growth days are gone."
Kafka cites a number of data points to support his thesis — notably that in the US, the average smartphone owner downloads zero (0!) apps per month, and that app downloads among the top apps have dropped 20% year-on-year from 2015 to 2016.
We sat down with Mark Bennett in early September at Google Playtime, a Google-organised London conference for Android developers, and asked him about this argument. Unsurprisingly — given his position — he disagreed.
"We’re still seeing average user install rates very high in mature markets," the Britain-based Google exec argued, highlighting emerging markets as a particular hotspot for growth. "People there are consuming huge amounts. We’ve had the most installs we’ve ever had last year at 65 billion installs. And in those emerging markets, users are definitely just going and consuming … [the] average Android user has 95 apps on their device. So yeah, still phenomenal growth, particularly driven by those early emerging markets."
It's indisputable that growth is slowing.
Emerging markets, Mark Bennett says, are a particularly hot stuff: "The growth rates in MENA [Middle East, North Africa], in Turkey, in Russia, are just phenomenal. And it’s a simple story, it’s a simple narrative — million and millions of people are getting smartphones for the first time. They’re getting internet-connected smartphones and they’re starting to engage with entertainment on their devices, and even in the big markets Android growth is continuing, so it’s a very healthy story."
This might be true — but it’s a lot slower than it has been in previous years. In September, research firm IDC predicted that the global smartphone market will grow just 1.6% year-on-year in 2016, versus a healthier 10..6% in 2015.
Markets are reaching a near-term saturation point — and that’s got to have an impact on app growth rates.
As such, in this crowded, slowing ecosystem, startups will have to work harder to be noticed — something that Bennett concedes.
"Clearly, there’s a lot of apps, and there’s a lot of games out there. So there’s a lot of experiences that have been really well designed, and there’s multiple versions out there … any developer that’s going to succeed and break through has really got to have a new experience, or a new product."
Enter Pikachu, saviour of apps.
Here, the exec highlights Pokémon Go, the wildly succesful augmented reality game from development studio Niantic. The app has players explore the real world in search of virtual pokémon — and has been a runaway success, getting downloaded more than a 100 million times in a month, and netting a cool $1 million in daily revenue. (Apple is predicted to make a cool $3 billion in the next year or two in fees.)
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That’s quite a small developer, Niantic. Yes, it’s licensed some major IP [intellectual property] from a big triple-A developer, but they’ve taken a theme around collecting and around that IP, brought movement, brought augmented reality into it, and lit up everyone’s imagination," Bennett says.
"If you can find that … niche, that experience, that’s new — that goes wildfire."
At Niantic's request, Benett says, Google didn't even promote Pokémon Go in the Play Store for weeks after launch — because the developer didn't want to be inundated with any more users than it already had. Even without that promotion, or a penny spent on marketing, it was still swamped with demand, bugging out and crashing constantly for some users.
The raw stats on slowdown are hard to argue with, and Bennett doesn't really try to ("I don't have the data at hand to agree or disagree with that"). His argument is that there is still opportunity for growth regardless — and that even in mature markets, any small developer has just as much chance of going nuclear as Niantic did with Pokémon Go.
"To new developers," Bennett says, "you've got to innovate, you gotta go after something that's not been done before."
It's an optimistic message, but the question developers will be wondering is whether that kind of stratospheric growth is still possible without Pikachu's help.