After 2.5 Years, Pokémon Go Generates Profits And Is Valued At $4 Billion

Pokémon Go developer, Niantic, announced that the game is now valued at roughly $4 billion after obtaining a $245 venture capital led by the Institutional Venture Partners (IVP), with strategic investors’ participation, Axiomatic Gaming, and Samsung.

Talking to BI, Niantic CEO John Hanke said that since its launch 2.5 years ago, Pokémon Go has generated over $2 billion of total revenues. He also claimed that the company’s cash flow is positive and it still has saved a lot in the bank from previous investments. He said, considering that, Niantic didn’t need the money.

John Hanke, Niantic CEO

Hanke says, however, he foresees an economic downturn that will make it harder for Niantic to raise investment capital. Regarding the fact that Niantic spun out of Google, he doesn’t completely object to getting Niantic acquired. However, maintaining the company’s independence is the best way to avoid investors’ control and ensure it can do what it wants.

So with the money it has, the company doesn’t see itself IPO in the coming years. Niantic CEO said:

Why Axiomatic and Samsung?

To consolidate relationships with them.

Hanke says it’s not all about money anyway. When having a financial stake in the company, Samsung and Axiomatic will talk more openly, and Niantic can benefit from their expertise.

Samsung, a giant Android phone player, has invested a lot in augmented reality, which has become popular through Pokémon Go. Hanke also believes Niantic can use Samsung’s investments to develop smart sensors, making augmented reality come closer to the real world.

Axiomatic, on the other hand, is an expert in entertainment and sports. Not only does it invest in the famous Team Liquid and Fortnite developer – Epic Games, it is also run by owners of various major league sports teams. So there are hopes that Axiomatic will offer the best advice for ways to engage fans and hold live events.

With the combination of expertise from Samsung and Axiomatic, Niantic can improve and bring more fun to their real-world gaming events, like the successful Community Day that encourages players to go outside together. Following the goal to use technology to help people explore the world by themselves, Niantic is also looking to hosting more indoor and outdoor events.

After Pokémon, Harry Potter is coming

Expected to launch this year, Niantic’s next big game is “Harry Potter: Wizards Unite.” The company partners with Portkey Games – Warner Bros’ subsidiary, to develop this game. And that’s all we know, Hanke shared no further.

According to Hanke, the one simple reason why Harry Potter and Pokémon – two of the world most valuable franchises – decided to work with Niantic is how the company puts that much polish and care into its product as well as its effort to explore the real world. “There's no comparable companies,” Hank says.

The CEO also suggests that more games are coming as current ones will get upgrades.

The cloud connection

Besides developing its own games, Niantic has another business facet – the Real World Platform.

Particularly, software developers may use the technologies that Niantic made for its own games, including the augmented reality technology, and the secret to multiplayer gaming as well as generating connections between games and locations in real-world.

Players list out the game's weaknesses

Hanke also thinks its technologies can have more applications other than just gaming, like consumer software, business software and robotics. Niantic has also hosted a $1 million contest for early developers on the Real World Platform.

The Real World Platform can work as a gaming studio and a developer tools company while carrying the mission to help Niantic keep going forward. Hanke said he wanted both, like Epic Games which is the Fortnite developer and owns the Unreal Engine software.

Pokémon, Go on

For Hank, Pokémon Go has eventually become what he expected it to be and had a pivotal year in 2018.

In 2018, Niantic added a few long-waited features to the game, including trading with friends and player versus player. In November, the company introduced “Pokémon: Let’s Go” that offers integration of Pokémon Go on the Nintendo Switch. That helped the company resume the game’s popularity but took a lot of effort.

Player versus player

After the 2016 launch, Pokémon Go developer spent months on improving the game. In 2017, the company stepped back a bit, building teams and building plans. In 2018, however, the team saw a lot of good news and this may go on in 2019.

Niantic has been keeping close interaction with fans through Reddit. While going straight forward with its own strategy for the game, taking in fans’ feedback helps a lot in refining the game.

Hanke says both Nintendo and Pokémon are very pleased with Pokémon Go as well as Pokémon: Let’s Go, and they’re seeking for further integration between the two products. He concluded by saying the company has benefited in various ways.