Network Effects Through Raids in Pokemon GO
https://pokemongohub.net/post/article/a-year-of-raiding-how-raids-changed-the-game/
This article reflects on the introduction of raids in the popular mobile app, Pokemon GO. Prior to the introduction of raids, Pokemon GO had relatively little interpersonal interaction. Players interacted with the environment independently of other players. With the addition of raids, an entirely new form of play was introduced. These raids were multiplayer events that enabled up to 20 people to collaborate towards a single goal if all of the members were physically present at a specific location, and many of these events were simply impossible to complete without a party of at least 5 people. Initially, this new game mode was only available to players above a certain level, but over time the level requirement has dropped to the point where almost all players can be included.
From the perspective of networks effects, the result of raids is different from the network effects we focused on in class. The need for teammates in the same vicinity makes the presence of network effects obvious, but this market does not follow the same form as the in class example The example in class had a the reservation price equaling r(x)*f(z) where f(0)=0, which created an equilibrium at z=0. However, the history of Pokemon GO is a clear illustration of why this is not the case here. The game thrived without networks effects for over a year before the introduction of raids, showing that the price of playing the game (free to play but time consuming) was already below the r(x) function for many people. Obviously the network effect is some function greater than 0 for all values of z.
Niantic, the company responsible for the development of Pokemon GO, did their best to drive the active population above the tipping point during the initial launch of raids. When the original raids were only available to high level players, these players were really the only ones still playing the game. At this point in time, many players had stopped playing the game, and Niantic used raids to pull these people back into the game. Since the higher level players were naturally the ones who had been more invested in the game before they left, they had the highest reservation price and were thus the easiest people to convince to return to the game. As the population of people playing the game slowly grew, Niantic lowered the level requirement to raid. The combined ability to raid and the existing raiding community drove the next highest level group of people to return to the game, and the process continued until as many players as possible had returned. This strategy cleverly used network effects to compel as many former players to return as possible