This year’s Consumer Electronics Show in Las Vegas featured a trend towards virtual reality (VR) and augmented reality (AR) consumer gadgetry. It took more than half a year for a consumer hit to develop but the brilliant rise of the mobile game Pokemon Go is proof that 2016 is the year that AR finally made a sizable foray into consumer markets.
Within one week of the Pokemon Go July 6th release date, the digital monster catching game surpassed 10 million downloads, the fastest that this feat has ever been achieved by a mobile platform game. By July 14th, Pokemon Go hit a peak of 25 million daily active users. The game’s base of daily active users surpassed many other popular apps such as Twitter (NYSE:TWTR), Spotify and Pandora (NYSE:P). At the beginning of August, the game had been downloaded 100 million times and was generating $10 million in daily revenues despite the fact that the game is free to play.
At least part of Pokemon Go’s incredible success seems to have something to do with a mixture of novelty and nostalgia. Many players first came into contact with the Pokemon franchise in the late 1990s when the game first became available for the portable Game Boy console. The passage of nearly two decades brings us into the smartphone era and the ability for mobile devices to display detailed graphics and provide Internet connectivity. The novelty mainly resides with the game’s augmented reality overlay. Instead of the fictional realms of Kanto and Johto, players instead roam the real world as the player’s digital avatar follows along on a road map representative of their actual neighborhood. Landmarks in real life, like libraries, historic plaques and statues, are either Pokestops, from which players can receive supplies, or gyms where trainers can battle for neighborhood supremacy.
The massive popularity of Pokemon Go is having some unique side effects. For instance, businesses around the world are using the game as a marketing platform. The Denver Post recently reported on locations like the Denver Zoo which are offering player discounts and setting up lure modules, which attract Pokemon for a short time, in order to get players to show up to retail locations. Elsewhere, the University of Idaho is offering a new course this fall called Pop Culture Games which will incorporate Pokemon Go as part of its curriculum.
There have also been some negative impacts created by Pokemon Go, which point to some of potential hazards of augmented reality. Media reports indicate that some have used the game to lure players into situations where they can be easily robbed, and one player was recently shot to death in a San Francisco park. There are also those who have brought legal charges against Niantic, Pokemon Go’s developer, because of its success. For instance, one New Jersey homeowner has filed a lawsuit against Niantic over players trespassing on his property to catch Pokemon.
Although Pokemon games have traditionally been released as games developed for consoles made by Japanese consumer electronics developer Nintendo (TYO:7974), Niantic is the lead developer on this version. The firm is formerly a subsidiary of Google which was spun off from the high tech giant last year. Prior to Pokemon Go, Niantic had achieved a much smaller degree of success with Ingress, another mobile game in which players visit real-world landmarks to complete tasks within the game. Analysis of Niantic’s business model indicates that the company profits from selling geolocation data to marketers who are interested in knowing more about locations frequented by players. Niantic also profits from in-app purchases from players looking to buy lure modules and other supplies.
Niantic’s mobile-based gaming business is currently protected by a portfolio of 3 U.S. patents which are directed to what the company refers to as “location-based parallel reality games.” One of these is U.S. Patent No. 8968099, which is titled System and Method for Transporting Virtual Objects in a Parallel Reality Game. It protects a computer-implemented method of transporting virtual objects in a virtual world having a geography that parallels real-world geography. The method involves transferring a virtual object from a first player to the virtual counterpart of the real-world carrier and modifying game data to transport a virtual object through the virtual world without requiring corresponding movement of the first player and transfer ownership of that virtual object to a second player. This system enables players of a parallel reality game to interact without having to meet in the same place at the same time, which can be inconvenient. Pokemon Go players will probably recognize that this technology lays the foundation for the game’s Pokemon gyms where players can battle Pokemon left by other trainers without that trainer being physically present.
Pokemon Go does not yet have an in-app messaging service but that could change as a result of the technology protected by U.S. Patent No. 9226106, entitled Systems and Methods for Filtering Communication Within a Location-Based Game. It discloses a computer-implemented method of filtering communications for a location-based game by receiving communication data for a plurality of players, filtering messages between players based on signals associated with each player and adjusting the filtered communication data for each player based on constraints associated with each player. This system addresses shortcomings of communication feeds within a location-based game which can become overcrowded as more players join the game. Diagrams attached to the patent show how the communication feed works with the Ingress game interface.
The early days of Pokemon Go have seen a great deal of server issues but Niantic has shown an interest in addressing some of these issues as is reflected by U.S. Patent No. 9128789, titled Executing Cross-Cutting Concerns for Client-Server Remote Procedure Calls. This patent claims a computer-implemented method which involves processing a source file defining a remote procedure call class specifying a plurality of remote procedure call (RPC) methods and then executing cross-cutting actions specified by decorator annotations contained within the source file in conjunction with executing RPC methods. RPCs are made by game modules running on client devices to invoke program elements of the game which players interact with as their location changes. This innovation allows new RPCs to be implemented without requiring new cross-cutting actions, such as collecting location information, which can create errors when many cross-cutting actions are added.
Pokemon Go might just be a game but augmented and virtual reality will be big business. British market analysis firm CCS Insight has recently forecast that AR and VR device sales will increase from 2.5 million units in 2015 up to more than 24 million units in 2018. MarketsandMarkets, meanwhile, is projecting the augmented reality market to hit $117.4 billion by the year 2022 at an incredible compound annual growth rate (CAGR) of 75.7 percent between 2016 and 2022. Much of this growth will follow higher market penetration of head-mounted devices in coming years, the market research firm says. It also expected the virtual reality market to increase to $33.9 billion by 2022 at a CAGR of 57.8 percent.