"Gym Stagnation and The Economics of Pokemon Go"

#PokemonGO: Over the past week, many gyms have gone up to Level 10 and seem pretty settled. We've all talked about how that can make the game less fun, but think about what Niantic just did to the economics of their app.Pokemon Go is a freemium game. Most play for free but some pay real money for coins. Coins are the way Niantic monetizes its product. They're a limited resource that you have to work for, or you can pay for them to get around the grind.Since the training change, top level players can easily park their Dragonites, Arcanines, etc. in gyms and others will avoid taking down a bunch of Level 10 gyms because its too much work for 10 coins and a bit of XP. In this system, most gyms get locked with little turnover.There are two ways to think of this:Players at Level 25+ with high CP defenders are pretty much set. They can lock in and collect 50-100 coins every day, almost indefinitely. In economic terms, those players can print money for themselves.For everyone else, coin scarcity just shot up. There are fewer gyms that you can quickly flip and get an extra 10 coins for the day. The cost of freeing up a gym has significantly increased.They've basically built an economy that rewards the top 1% of players and makes it harder for everyone else to get ahead.A big question for Niantic's economics is what that does to the total number of coins distributed each day. If a gym is locked at Level 10 and no one attacks it, that gym only gives out 100 coins/day. If it's fluidly changing hands, it may produce coins for 25 different players in a day (250 coins/day).They've bet their only source of revenue (in-app coin purchases) on making resources free to top players and adding friction for casual players that want to get ahead. It's counter-intuitive for many freemium models since your most engaged users are usually most likely to pay you. Maybe their monetization data shows something we don't know, or maybe they just turned their whole economy upside down. via /r/pokemongo http://ift.tt/2eNPYBY