• Pokemon Go game adds value to smaller businesses

From Pokémon to Pokéconomy

ILab Notes
Why you should love the phenomenon, even though you hate the game.

Undoubtedly, Niantic has made a lucky hit by launching Pokémon GO this summer. Adding $7.5B to the Nintendo market value in just 2 days, the immediate and worldwide success of the game is not to be ignored. But even though you might not be a fan of the game itself, you should appreciate its coming. Why? The real value of the rise of Pokemon GO is not to be found in the excitement about investors from all sectors aggressively investing in AR after this. Nor is it found in the fact that it disrupts everything previously learned about app design and marketing. The single most important reason, you should be excited, even though you might not be into either the game, app-design or AR-technology, is the increased possibility for small and entrepreneurial businesses to rise.

The basics of Augmented Reality

In short, Augmented Reality - or just AR - is about enhancing real-world scenarios through computer-generated elements. In contrast to Virtual Reality, which is based on technology creating a simulated view of the actual world, AR uses real-life audible, visual, and other sensory information as its sole foundation. In other words: With the help of advanced and often cutting-edge AR technology, like adding computer vision and object recognition to the information surrounding the user, this becomes interactive and digitally manipulable. Furthermore, this information can be both virtual or real, e.g. seeing other real sensed or measured information such as electromagnetic radio waves overlaid in exact alignment with where they actually are in space.

Ikeas “augmented reality catalogue” - a perfect example of how basic AR looks like
Ikeas “augmented reality catalogue” - a perfect example of how basic AR looks like


Normally, the basic hardware components for AR entails: 1) a processor, 2) a display, 3) sensors and 4) input devices, but AR without those do also exist. Of course, each of the components contains several variables, making each of them technologically advanced in their own way, but actually not more elaborated, than e.g. a smartphone or a tablet computer can contain it. Thus, AR is rather accessible and user-friendly for most of us, making the technology fit for commercialization - a discovery, Niantic has picked up on. Quite well.

Augmented Reality in business

Niantic is far from the first ones taking AR to the business market. Even though the earliest attempt tended to be non-interactive and did not rely on special user equipment, such as computer-generated graphics overlaid on television footage, the technology has been fast developing the recent years. Nowadays, we see a lot of different AR hardware that enhances the wearer’s perception of reality with additional sensory input, often updated and available to manipulate in real time, blurring the lines between the real and the digital. 

Great examples can be found in construction, where the University of Canterbury released CityViewAR, enabling city planners and engineers to visualize buildings that were destroyed in the massive Christchurch earthquake in 2011, but also in search and rescue management, where AR systems can provide aerial camera operators with a geographic awareness of forest road names and locations blended with the camera video. Here, LandForm+ dating back to 1996 (!) has numerous times proven beneficial when looking for lost hikers. Even the beauty giant L'Oreal Paris has also recently started experimenting with implementing AR technology in order to add market value and released the smartphone and tablet application "Makeup Genius" in 2014, which lets users try on make-up and beauty styles through the front-facing camera before buying the actual product. 

CityViewAR showing a virtual building in AR view, making it possible to see hows thing looked e.g. before an earthquake
CityViewAR showing a virtual building in AR view, making it possible to see hows thing looked e.g. before an earthquake


Thus, there is nothing new to the use of AR in business. However, Pokémon Go represents a whole new way of using the technology in this area. A way, which you can make use of, even though you have no AR-developers among your colleagues.

Gotta catch ‘em all

Pokémon GO allows players to capture, battle and train virtual Pokémons who appear throughout the real world by using GPS and the camera of compatible devices and is free for everyone to use. As the user moves in reality, the avatar moves on the AR map, and when meeting a Pokémon, you are given the option of viewing it in front of a digital background or in AR mode. In the latter case, the smartphone-camera is used to cause it to appear as if the Pokémon exists in the natural world, making your attempt at capturing your Pikachu seem a little more realistic. The game just recently reached a whopping 100 million downloads and is now the biggest in the United States, surpassing Twitter in its number of daily users, with more time spent on it than Facebook. 

Pokémon GO in action - putting an augmented layer on the real world
Pokémon GO in action - putting an augmented layer on the real world

Not surprisingly, this immediate success has caught the eyes of people in various businesses as well. But instead of getting inspired by the game and develop something similar - like in the above-mentioned examples - companies are implementing the already existing technology in the game into their marketing strategy. For example, the in-game Lure Modules (an in-app purchase to attract Pokémon to a particular location) and sponsored locations (specific Pokéstop locations which companies are able to buy) has been used by consumer businesses in order to...well...lure the players into their stores. And this is not only practiced by giants like Starbucks or McDonalds - with the expense of only $1.19 per hour, even our local pizza man right beside our office has picked up on this. 

Another way of implementing the game into the existing marketing strategy is to add the primary goal of the game - to catch Pokémons - to already existing services in order to increase customer traffic. For travelers seeking to score some out-of-town Pokémons, the search engine has added a PokéView filter. When using the filter during a room search the number of Pokémon within a radius of about 500 feet at the specific room is shown. The website, which aims to function like the Google of accommodations searches, compiling all rooms available in a location from Couchsurfing and Airbnb accommodations to hotels and houseboats, also notes the proximity of stationary Poke “gyms” and “Poké stops”.

There is a Pikachu at the Wyndham New Yorker - what are you waiting for?

Lastly, some businesses have caught up on the social potential of the game as well. Bok Tower Gardens, a “contemplative garden” and National Historic Landmark in Florida, is filled with “Poke-stops” making it a magnet for hundreds of players. Not only did they publish a guide for the hunters - they even planned an event specifically to encourage these to “GO to the Gardens,” with the promise of free lures. The non-profit recorded a 10 to 15 percent increase in ticket sales since the release of Pokemon GO.

The Pokémon Phenomenon 

It should be clear by now, that Pokémon GO adds major value to AR. Not only are various businesses realizing, that the technology is of major popularity. Also, Pokémon GO has shown, that you do not have to invent a new product based on AR in order to benefit from this technology - simply adding already existing AR inventions onto your future strategy is enough for increasing foot traffic as well as customer engagement. What this means is a higher level of investment in further development of the technology. A development, which I, and other tech-nerds, are excited to follow. But that is not, why the game is groundbreaking.

Never dismiss a teenage passion as mere toy


With Pokémon GO, the bypassing of (expensive) digital marketing channels, which businesses have been relying on for years, are suddenly possible. What this means is, that even the smallest business - like our go-to pizzaman here in the office - are able to compete with the giants nearby. In other words, the rise of the “Pokéconomy” brings life to the entrepreneurial spirit in local businesses near you. Wherever you are. And that is why, you should love the Pokemon Phenomenon - even though you might not like the game.