Why Location-Based Games Struggle

I wrote previously in my Substack about Niantic’s product innovation in Pokémon Go.

Before Pokemon Go, Niantic had already created an impressive game called Ingress, but it didn’t succeed with pure gameplay innovation. The needed product innovation was integrating the well-known Pokemon IP into a simple, fresh, location-based gameplay where you’d walk outside and find Pokemon. The gameplay fits perfectly with the intellectual property and is an excellent example of product innovation.

There are businesses to be made in geo games, but I’ve always had a hard time seeing any of them go mainstream without a massive IP and gameplay fit. In this piece, I will attempt to cover those reasons.

Quick disclaimer: In this piece, I’ll define success as a product’s potential to grow into a billion-dollar business, consistently generating over $100 million in annual revenue. While many excellent businesses can achieve a few million in revenue annually, the focus here is on the key factors that make geo games well-positioned for venture capital investment.

Niantic’s track record

If you look at Niantic’s track record, they first shipped Ingress, which was not a financial success. Then came Pokemon Go, a massive success. As of 2024, Pokémon Go has generated nearly $8 billion in lifetime revenue since its launch in 2016 [1]. There was a clear distinction between Ingress and Pokémon. The former was a dorky geo game, whereas the latter tapped into the massive nostalgia and widespread recognition of the Pokémon brand, resonating deeply with a generation that grew up with “Gotta Catch ’em All.”

Niantic knew that IP was the way to go. They followed the success of PGO with a bunch of IP-based games, trying to replicate the success. Harry Potter was launched in 2019 and killed in 2022. Transformers (canceled in 2022) and Marvel (canceled in 2023) were high-profile casualties, but the list of failed launches extends to even less obvious fits for geo-based gameplay with smaller IPs, such as Catan, the NBA, the Endgame series, and many more.

Since then, only one game has worked. Based on AppMagic’s numbers, Monster Hunter Now has achieved $160m in annual revenue since its launch in mid-2023.

Why is it so hard to achieve success in geo games

My company, Next Games, built and launched a location-based game in 2018. We were also in the business of applying big brands into games. Our IP was the Walking Dead, and the game was set in a post-apocalyptic zombie-infested world, where encounters in the geo game were to mow down a horde of zombies to get some valuable loot.

The game was not successful.

From this experience, I’ve realized that players of geo games are no different from those of any other genre; they seek novelty, fun, and entertainment. The location-based element in geo games primarily serves as a session mechanic rather than a core motivation for play. It’s not that people are actively looking to play outside or walk around; rather, the reason for Pokémon Go’s success lies in the compelling content and brand appeal. Pokémon’s massive popularity helps players overcome the hurdles of needing to move around to unlock in-game rewards.

Why Monster Hunter Now seems to be doing well

If we look at what went on outside of Niantic’s efforts, a developer called Ludia launched a Jurassic World geo game in 2018, which was probably the most successful non-Niant geo game.

Collecting monstrous, cool creatures clearly resonates with players. Even Niantic had to leverage another iconic monster franchise to find success. When you play MH Now, it feels like a badass version of Pokémon Go. The monsters aren’t cute; they are cool. You aren’t doing soft combat; you have swords and blades to battle the monsters—perfect IP and gameplay fit.

Monster Hunter Now proves that collecting and combating with creatures is the way to success in location-based games.

Final words

Big IP does not automatically equal big success — the game has to fit the core of what the IP is about. With Pokemon Go, the gameplay was a character collector, with fun and entertaining, but also sometimes hard, obstacles to get to “catch ‘em all.”