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Data Suggests Pokemon Go's Fiscal Effect Was Exaggerated

The smartphone game Pokemon Go was this summer's smash hit, drawing hordes of eager gamers onto the streets in search of Pokemon. Data suggested that businesses near PokeStops, in-game beacons that attract Pokemon, saw sales increases of $2,000 a week. Media outlets were full of stories about the game saving small businesses and boosting sales. Business news sites produced guides to businesses hoping to turn their fortunes around with Pokemon. We also covered it intensely, writing about how businesses were curious about how to be included in the game.

Pokemon Go's popularity has waned since its peak in July, however. What's more, Jason Shu, a data analyst at Womply, believes that its fiscal effect was exaggerated even then. While it's true that 82% of businesses with PokeStops got increased foot traffic and $2,000-a week sales increases, in July increased tourism means similar benefits to any businesses. Data from Revel Systems reveals a 63% boost in sales in July at businesses near PokeStops compared to a 61% boost for businesses not near PokeStops.

Shu cautions the overly hopeful that "correlation does not imply causation." Many other factors could have been involved in the surge in July foot traffic. Also, stores drew benefits unevenly; businesses with limited store front and inventory and cheaper price points saw less of the Pokemon Go boon.

Shu carried out the research out of a personal interest in how much Pokemon Go benefited businesses and was surprised at the results. “We went to great lengths to believe it, and we used every statistical analysis we could think of," he says. He cautions store owners against believing the hype the next time a popular AR (augmented reality) game rolls around.

Although Shu's data was collected from America, Pokemon Go is also popular in Japan and brings foot traffic to businesses there as well. Miyagi Prefecture bet on the game to bring it business.

Source: Forbes: Alex Konrad