pokemon go & the future of augmented reality

IMPROVING THE EFFECTIVENESS & EFFICIENCY OF MARKETERS & THEIR AGENCIES

POKEMON GO & THE FUTURE

OF AUGMENTED REALITY

July 2016


4 things you need to know about

Pokemon Go

1. What is Pokemon Go?

Pokémon Go is an augmented reality game for iOS and Android devices, developed by Google startup Niantic lab which uses GPS and Google maps to place Pokémon in the real world for you to catch and collect. After five years of planning , it was launched in July 2016

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2. How does it work?

In simple terms, your device screen displays a map of your local area and as

you walk around, the game tracks your position and different species of

Pokémon appear for you to capture.

3. Do I have to pay for it?

No… but with some caveats. The game itself is free to download and you can start catching Pokémon right away. There are, however, a host of micro-transactions that allow you to pay real money for Pokéballs, other items and boosts.

4. Why do people like it so much?

Nostalgia is a big part – everyone knows what Pokemon is.

The design is charming and the concept is a lot of fun. It gets people out of the

house, exploring their local areas in ways they hadn’t considered and

interacting with other trainers in the real world.


What is Augmented Reality?

• Augmented reality is precisely an augmentation of real things. In practical terms, it’s a view of the real,

physical world, with digital elements overlaid in an effort to modify reality. Ultimately, it is the integration

of digital information with a user’s physical environment.

• Difference from Virtual Reality: Augmented reality and virtual reality are inverse reflections of one in

another with what each technology seeks to accomplish and deliver for the user. Virtual reality offers a

digital recreation of a real life setting, while augmented reality delivers virtual elements as an overlay to

the real world.


Why Augmented Reality?

• Augmented reality (AR) is far from new. In 2013, Google touted to bring AR to the masses by launching

Google Glass. Priced at a premium of $1,500, however, it was quickly pitted by consumers against other

top-end smartphones. However, Google Glass fell short of all expectations. The prospect of an

overreaching device that so invaded privacy also led restaurants, bars, gyms, and hospitals to forbid its

usage.

• While Google Glass isn’t on the market anymore, Pokemon Go was only released on July 6th. The app

already has over 26 million daily active users. It is taking over the iTunes and Google Play Store; the AR

element on the app was a definitive part of making this app a success.

• This technology could very soon be integrated into our everyday lives. Although AR may only be trending

in the gaming and entertainment space, the gaming/entertainment industry only accounts for less than

50 percent of the software market in the years to come.


Our 2025 Base Case VR/AR

Software Assumptions by Use Case

Military

$1.4bn

Engineering

$4.7bnc

Healthcare

$5.1bn

Education

$0.7bnReal State

$2.6bn

Retail

$1.6bnLife Events

$4.1bn

Video

Entertainment

$3.2bn

Video

Games

$11.6bn

Source: Goldman Sachs Global Investment Research


How viral has Pokemon Go become?

Journalist interrupts US State Department

ISIS briefing hunting Pokemon

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MMA fighter Michael Page even incorporated Pokémon

Go into his knockout celebration when he mimicked the

game by rolling a Pokéball at his floored opponent.


Surpassed Tinder and threatening Twitter

• On July 8th, 2 days after the app’s release, it was already installed on 5.16% of all Android devices in the

US, compared to Tinder on about 2%.

• Over 60% of those who have downloaded the app in the US are using it daily, meaning around 3% of the

entire US Android population are users of the app. Pokemon Go is coming for Twitter too, and its 3% of

daily active users on Android (as July 8) is set to overtake the 3.5% of daily active users on Twitter


Tops Facebook in Engagement


More than 6 million mentions on

Twitter in less than a week

Since July 6, it has been mentioned

on Twitter 6.6 million times, with

59% of the chatter coming from

young guys.

The discussion peaked Sunday

night (July 10) at 10 p.m., when

130,000 tweets about the game

were being fired off during the hour


Nintendo shared price doubled,

then plummeted

• Nintendo shares ended up 14.4 percent at 31,770 yen on 12 July, bringing its gains to more than 100

percent since the launch of the game on July 6. However, it has plummeted 17% in one day on 25 July,

due to investors belatedly discovering that the company doesn’t actually make Pokémon Go with

Nintendo’s statement clarified that Pokémon Go “is developed and distributed by Niantic, Inc”, an

independent company spun off from Google in August 2015.

• Both Google and Nintendo hold stakes in Niantic. Nintendo owns 32% of the voting power within the

Pokémon Company,


How retail brands are leveraging

Pokemon Go phenomenon

• Social media reports reveal that Pokémon Go players are making their restaurant choices based on the

availability of Pokémon in the area. And, restaurants are using that fact to attract customers.

• Besides special deals for Pokemon Go players, retailers have the option to attract players into shops by

purchasing a Lure Module through the app that brings monsters to a Pokestop for 30 minutes—and

presumably customers after those monsters.

• According to the New York Post, a New York pizzeria saw business rise 75% after it dropped a lure in the

game for $10.


Retailers will soon be able to

sponsor Pokemon Go locations

• Retailers and other businesses would soon be able to buy

Pokestops (locations where players go to stock up on pokeballs

and find Pokemon) or Pokegyms (locations where players battle

other Pokemon) to lure players to their locations. So far these

portals are now largely geo-located at sites like parks and

museums.

• According to Adweek, sponsored locations are coming to

Pokémon Go via Google AdWords. The ads reportedly will only

charge businesses when someone playing the game actually

visits the physical location.

• Cost per visit is enticing for businesses with physical locations as

it can lead to a more direct and quantifiable correlation between

ad spending and in-store purchases.

Pokegym


McDonalds to Sponsor Pokemon

Go in Japan

• Within four hours of its launch, Pokemon Go was already the most downloaded app in Japan

• The launch in Japan includes a tie-up with McDonald's Japan that is seen as a potential expansion of the game's revenue base beyond the sale of in-app purchases.

• Shares in the fast-food chain’s Japanese unit, which are traded in Tokyo, rose 5.3% 6 days after launch, while those of Nintendo Co., which owns a minority stake in Pokémon Co., rose 14%.

• Financial details have not been disclosed, but McDonald's said that about 400 of its 2,900 restaurants in the country are designated as "gyms" where players can battle on their smartphones. The other 2,500 are "Pokestops,"where players can get "Poke Balls" and other items they need to play the game.

Women play Pokemon Go in front of a McDonald's

restaurant in Tokyo, where the app's launch broke new

ground by forging a corporate partnership


Implications for Marketers

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Augmented Reality Marketing is here

• Augmented Reality Marketing will solve the problems that traditional display

advertising has been facing for a long time: disrupting user experience, difficult in

measuring ROI.

• Brands can actively play a role in the game. The clearest paid media opportunity is

that Pokémon Go will actively encourage users to engage in ‘ads’, through driving

them into store, or owned location, to have an interaction with the brand in return

for an in game reward.

Mobile is the glue between online and offline

• Pokémon go became one of the best exercise apps – requiring people to walk up to

10 kilometers to nab the best Pokemon.

• Mobile apps will no longer be labeled as “making us lazier”, “only staying indoor”.

Therefore, brand strategy has to start with mobile. Many marketing campaigns are

now designed for a completely mobile experience, and mobile innovation goes well

beyond a temporary mobile campaign site.


Implications for Marketers

Consumers are more open to AR experience than we thought

• The success of AR apps like Pokémon Go and Snapchat validates the continued

investment in progressive technologies to engage and entertain customers,.

• Instead of releasing native gaming apps of their own, brands nowadays are working

with apps that already have massive audiences, integrating their brand in a

natural way .This might be through sponsoring in-game tournaments, or providing

bonus levels and content.

Start thinking about virtual reality too

• The social impact and success of Pokémon Go also raises questions about virtual

reality. VR tends to be much more of an individual experience which is a key trend

of customer experience i.e. personalization

• There is still a lot of work to be done to make virtual reality applications more

social. Marketers should keep an eye and start thinking about using VR to promote

personalized engagement with their product and service


Thank You!Thank You!


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