Augmented Reality is All Go Go Go

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Yahoo’s Director of Mobile, Shan Henderson, mulls over the madness of Pokémon Go

One fact in the mobile gaming industry is beyond doubt at present: every gaming studio worth its Himalayan Rock Salt has shelved plans for producing more revenue from the latest iteration of whatever ‘Clash of Sentinels’-type game it relies on. Instead, it will now have a war room full of developers smashing code into an assortment of characters and real-world locations, ripe for augmentation.

When it comes to Pokémon Go, the media is understandably focusing on the external effects of the game, notably cheats, fights, and even deaths. Alongside this we’re seeing the industry being disrupted at a rate of knots: avid users are quickly dropping previously ‘sticky’ apps and Augmented Reality (AR) has now officially broken into to the public consciousness.

2016 was supposed to be the year of Virtual Reality (VR), when headsets became commonplace and applications (in the purest sense) would see their usage multiply beyond gaming. Instead, Niantic Labs – who developed the game – turned to a 20-year-old brand, bypassed a still clunky platform, and deployed the smartphone as the ‘viewer’. In a way, AR can be seen as a gateway to VR, making the leap seem more familiar, comfortable, and rewarding.

Such is the success of the game, predicting what might come next could be seen as a fool’s errand. But here goes.

There is one rule that applies to mobile like nowhere else: own the platform and you own the market. Looking at Uber, Airbnb, and the many messaging apps currently dominating their sector, it is apparent that if you attract enough users to a service, it becomes possible to broaden an offering and open multiple new monetisation streams with external partners. This seems the most logical medium-term development. If you can get users to wander into an unlit urban park at midnight, holding a $500 smartphone, you can probably sell them a pizza, or book them a ride to the hospital.

The meetings diary at Niantic HQ must be full to bursting. Media agencies around the world are currently being asked one question above all others: how can we get involved in Pokémon Go? Rumour has it that $10m is the starting point for commercial negotiations, and this price is unlikely to be a sticking point for global brands looking to innovate and engage.

The success of the platform is all the more notable given the geographically limited roll-out until now. Pokémon Go is still not available in India or China. Population density and the non-trivial task of organizing physical locations and lures in these territories present a formidable challenge. But the rewards for executing correctly and fulfilling the pent-up demand will be immense.

The makers have yet to spend a cent on acquiring users, due to the organic avalanche the app has triggered. They are now sitting on a significant war chest which could be used to pull in new or lapsed users should the growth curve start to stall. There is also a well-known path to extending the life-cycle and profitability of a franchise. Niantic are a long way from flogging any ailing horses, but it is easy to envisage a future of movies, spin-offs, sequels and more, as the inexorable rise of the Pokémon continues.

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