R/GA London Technology Director Anthony Baker on the business smarts behind Pikachu and friends’ success
Combining the physical and virtual world is a difficult challenge that many have been trying to tackle, with varying levels of success. Augmented Reality (AR) has been around for decades, but it has proven difficult to drive interest and business opportunities at scale. There have been countless AR applications ranging from mobile and tablet apps, magazines, game console, and wearables, all failing to truly gain traction and mass adoption. However, with Pokémon Go, Nintendo has been able to make ripples globally, creating a worldwide-adopted mobile experience for consumers (and businesses) that has brought AR back to the spotlight.
The soaring numbers speak for themselves. Apple revealed that Pokémon Go was the most downloaded app ever, on its App Store during the first week of release. It is as also the fastest mobile game to reach over 10 million downloads, according to analyst group Sensor Tower.
The game has more active users than Twitter and Google Maps, while people keep playing it day after day defying all mobile app behaviour trends. Sensor Tower also estimates that people spend more time with on the game than on Facebook (or any other social network for that matter). Nintendo has added an outstanding $23 billion to its value in just a few weeks, and according to Bloomberg, the company value increased to more than $39 billion, beating even Sony (valued around $38 billion). Despite recent drops in Nintendo shares, it is still a huge increase since the game was released.
Nintendo were extremely clever, and successful, in the collaboration that really brought the app to life. The game was actually developed by Niantic, a private company that spun out of Google, with experience on location-based games and AR experiences. With that, Nintendo managed to bring years of research from Niantic into the mobile app, and combined it with the well-known franchise of Pokémon, property of The Pokémon Company. Certainly the beloved characters have helped the game’s success and global adoption, but what has caused such an incredibly fast global adoption phenomenon?
There are several key elements to call out. A clever, yet simple way to integrate the virtual game into the physical world, making it part of the everyday life (at work, at the gym, while commuting, while going out, etc.). And at the same time, the global scale of the game’s audience breaks traditional barriers such as borders, location and language. It is a sharable experience across the globe, where many people can be part of it, which has made it culturally relevant. People are playing together across the world, creating a sense of community that currently expands over more than 35 countries. But making it compelling for consumers is not the only focus point. Nintendo might have created a lucrative new business model, allowing the company to monetize foot traffic in an organic way. Nintendo is now making revenue not only from in-app purchases, but also from companies that want to have sponsored locations to lure consumers in. For the release of the game in Japan, Nintendo has introduced sponsored locations and a potential deal with McDonald's to make their restaurants key locations for players around the country.
The speed of the success of the app is a real lesson to both brands and agencies looking to utilize and innovate with AR and VR techniques. Yet it is still to be seen if Nintendo manages to retain consumer interest after the novelty rubs off - only time will tell if the company is able to create a sustainable and genuine business model out of it. Niantic has real experience building location based AR games, and is certain to keep pushing the boundaries with new features and game mechanics, and Pokémon is certainly a timeless global phenomenon no matter what happens with the game itself from here. But one thing is certain, Nintendo managed to create an AR experience able to captivate the interest of consumers at a global scale, and transform the way people interact with the physical and digital world on a daily basis. With the current technology advancements and the investment in the field from companies like Magic Leap and Microsoft, it is quite possible that this is just the beginning of a hyper-reality global transformation from big brands - and as innovation and agency partners, we should all take note.