Pokemon Go screencap

Five days ago, game developer Niantic released Pokemon Go for iPhone and Android in the United States, New Zealand and Australia. Despite being available in only a handful of countries, the number of people using it on a daily basis is approaching the number of people who are active on Twitter. Such has been the demand that Niantic has paused its global rollout to deal with the server demands. But what is Pokemon Go, and why is it so popular?

OK, start at the beginning. What are Pokemon?

In Australia, Pokemon (an abbreviation of Pocket Monsters) was a key part of childhood for many people growing up in the 1990s. Pokemon started as a Japanese video game for Nintendo’s handheld Game Boy gaming console, which placed kids in a world where there are no animals but 150 (at first) types of Pokemon, which can be captured, trained and sent into battle with others in a sort of digital cock-fight. There were numerous spin-off video games, a card game, a TV series and a couple of movies. The brand, owned by the privately held Pokemon Company (which is itself owned by gaming companies Nintendo, Game Freak and Creatures), made US$2 billion in retail sales last year.

So what is Pokemon Go?

Pokemon Go is the fourth mobile game released by Niantic, a mobile game developer that began as an internal Google start-up (it was spun off into its own company last year). Niantic received $20 million in seed funding from Google, Nintendo (the indirect licence holder and main console for the early Pokemon games) and the Pokemon Company to create it.

Pokemon Go uses your phone’s GPS technology, as well as the camera function, to allow players to capture pocket monsters, or Pokemon (Pokemon is like moose; the singular is the plural), in their own neighbourhoods.

We mean “neighbourhood” literally. The game’s basic screen is a stylised street map of the user’s actual location, on which landmarks called “Pokestops” and Pokemon appear. Once a user clicks on a Pokemon, the phone’s camera activates. Users then have to angle their phone towards the Pokemon, depicted in the middle of their real surroundings, to “capture it” by throwing a digital ball (a “Pokeball”) at it.

The game encourages physical walking and exploration. “Pokestops” are real-life landmarks in an area — users get more “Pokeballs” and other loot, including Pokemon eggs, by approaching the landmark and interacting with it on their phone. Eggs only hatch when the user has walked a certain distance with them in an incubator. And from our weekend investigations, Pokemon seem to spawn more quickly when you’re on the move. Which explains why you might have seen hordes of hipsters staring at their phones, then pointing them at things over the weekend.

The game also makes use of Pokemon “gyms” — arenas where your Pokemon battle another real-life user’s Pokemon. Every neighbourhood has a smattering of gyms — you need to be standing near them to try to battle in them. If you win, you hold the gym — until the next player with Pokemon strong enough to rival yours comes along.

“Our goal is to make it so you can walk out of the house and within five minutes, you can find Pokemon,” Niantic CEO John Hanke told Venture Beat last year. “It may not be the most rare Pokemon in the world, but there’ll be a population of Pokemon living near all our players.”

“Pokemon will live in different parts of the world depending on what type of Pokemon they are. Water Pokemon will live near the water. It may be that certain Pokemon will only exist in certain parts of the world. Very rare Pokemon may exist in very few places. But you can trade.” (Trading isn’t available yet.)

Why is Pokemon Go so popular?

Partly because it’s a new Pokemon game. And secondly because it’s an interesting and, to most people, new way to play games. Augmented reality is the next frontier in video games, and many developers are putting out new games for the technology. But it generally requires a headset and a lot of hardware to do properly. Pokemon Go is virtual-reality lite — it uses nothing more than your smartphone.

Couple that with the aforementioned deep-seated childhood urges of 20- and 30-somethings to catch all the Pokemon, it isn’t surprising it’s a hit. Though the company had high hopes for the game, it seems to have underestimated the demand — servers for Pokemon Go have been frequently down.

Is it dangerous?

The game opens with a warning to players to stay aware of their surroundings, and not in the way they’re displayed on your phone. Media outlets have begun to catalogue injuries players sustained while not taking note of what’s right in front of them. And others have speculated that shop keepers might assume people intently holding up their phones could be preparing a hold-up. There’s certainly room for miscommunication.

All right, so how does it actually work?

One of the most startling things about Pokemon Go is the level of detail with which neighbourhoods are captured into a digital replica. Pokestops are real-life landmarks, which are displayed in the game with a picture and description.

The game builds on the technology and database first created for another Niantic game, Ingress (created when the company was still part of Google and could easily draw on its vast mapping technologies).

Ingress has been fairly popular over the past few years and operates very similarly to Pokemon Go. But it doesn’t have the brand recognition. This has meant that while you may occasionally see people on the street playing it, it has yet to entrance the population as much as Pokemon Go already has.

Sounds like a lot of work. How does this make money?

How doesn’t it! The game is free to play, but if you’re willing to fork out real money for “PokeCoins”, the whole thing goes easier. In-app purchases are the revenue stream for most games, and the biggest games make a mint from it.

You can buy more incubators — and thus hatch more Pokemon eggs at the same time. You can buy (again, using real money) more Pokeballs, items that make you more likely to catch rare Pokemon, or you can buy upgrades that let you store more Pokemon at once.

The game’s been out less than a week, so no doubt there’ll be further options for monetisation. When Ingress was up and running, it was possible for businesses to buy a landmark in their store, thus encouraging foot traffic.

Nintendo has always appeared reluctant to hand over its lucrative Pokemon licence to mobile phone applications for fear it would cannibalise their handheld console revenue, but it’s safe to say that less than a week since launch, the company is probably far less worried about that now. Nintendo’s share price is up 21% in the past five days.