Pokemon Go won t generate 3 billion for Apple

OLM



As Pok�mon Go climbed up the app charts as it became an international sensation, some analysts suggested
that Apple might be making more money off of it than Nintendo.

Analysts at Needham on Wednesday did the math and have come up with a outrageous claim: Pok�mon Go could add $3 billion to Apple's revenue over the next one to two years.

In an analyst note distributed to clients, analyst Laura Martin walks through the math:


Using Sensor Tower's July 11 estimate of $1.6 million of in-app purchases per day in the United States, and an estimate of 10 million downloads on iPhones - source unknown - Needham comes up with a spending rate of $0.16 per person per day. (On July 11, Sensor Tower told me there were only 2 million iOS downloads in the United States, and now cites 30 million downloads across both iOS and Android.)


Then, Needham assumes that Pok�mon Go will achieve "20% penetration" in developed markets "at maturity." But currently, Pok�mon Go is only played by 6% of the U.S. population - and it's been a phenomenon for a week.


Assuming that Apple makes $0.05 per player per day - the 30% cut of Pok�mon Go's revenue it takes as owner of the App Store - Needham finds the "upside case" for Apple to be $3 billion over the next 12-24 months.


While Needham's estimate is rough and does provide a ballpark figure, it's likely way overstated.


Here's a reality check: Apple announced in January
that the App Store pulled in "over" $20 billion in total bookings. After Apple takes its 30% cut, that would be around $6 billion in revenue.

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