What Pokemon Go reveals about augmented reality

The charm of pocket monsters

In a new twist on augmented reality, Pokemon Go is currently enjoying a worldwide frenzy of popularity. Pokemon Go is based on the 1990s ‘pocket monster’ characters that first appeared in games for the Nintendo Game Boy, but that have since been released into the real world.

In this latest incarnation, the monsters will appear on a map that represents your surroundings. Once you’ve found one to catch, the camera shows the real world, with the monster superimposed on the camera image, ready to be caught. It’s this mix of the real and digital world that puts the game firmly in the ‘augmented reality’ category.

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The IP behind the business

The patent for much of the technology behind the game is owned by co-developers, Niantic Labs. Niantic began life within Google, but was spun out following the formation of Google’s parent company Alphabet. We can see from the legal information regarding the patent that the transfer from Google to Niantic took effect from 6 October 2015. As an article in Recode explains, it is likely that Google reached this decision as Niantic needed to work with other developers, in this case, Nintendo, to accelerate its growth. In fact, this is not Niantic's first AR game, as the company is also behind Ingress. This is a popular science fiction game, but one that does not benefit from the same mass appeal of Pokemon.

Meanwhile, Google prefers not to favour specific developers, but instead likes to remain an agnostic platform, which explains its investment in Magic Leap. Magic Leap is positioning itself as 'the definitive platform' for augmented reality, which is a much better fit for Google's strategy.

As for the patent in question, this focuses heavily on the location-based aspects of the technology that make the game possible. From the abstract: “The method includes receiving, at a computing device, communication data for a plurality of players associated with the location based-game. The method further includes filtering the communication data for each player based on one or more signals associated with the respective player.”

How this impacts future trends

The patent technically describes two outcomes we see from the consumer perspective that have contributed to the game’s success. As the New York Times points out, many games go viral overnight that cause people to coop themselves up in their homes for days, whereas Pokemon Go sends them out into streets and parks. Meanwhile, the social element will attract those who are otherwise ‘naturally disinclined’ by AR.

There is a beneficial side effect to this. We have seen in other industry areas how wide acceptance and familiarity of a technology in the consumer environment can accelerate ‘heavier duty’ applications of the same technology in the industrial or professional world. For example, Skype comes to mind, which enjoyed success displacing a number of enterprise instant messaging and video communications solutions in the comms market.

The consumer success of AR will therefore be welcomed by all those players who are pursuing more sophisticated implementations of the technology, as it embeds the technology within the mindset of everyday users.

We’re seeing this translate into trends in innovation data as well. In a recent white paper on the subject of virtual and augmented reality, we took an in-depth look at this emerging space. One thing we noticed was that, when we compared the growth rate for VR and AR combined, rather than just VR alone, the number of patents containing the term AR were growing at a faster rate. It has also become clear that a ‘second wave’ of interest in the technology has been much stronger than the first wave of interest registered in the early 2000s.

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From what we’ve experienced with Pokemon Go, it’s no surprise that, when we look at the breakdown by industry vertical, the entertainment category (within which gaming falls) takes the lion’s share of patenting VR_AR_Share_By_Industry.pngactivity - but there is clear interest from other verticals as well, including healthcare and automotive.

It's in these vertical, industrial and enterprise applications where some of the biggest AR profit margins are expected to be made. However, one thing is clear – with the rise of Pokemon Go, everyone in this space is a winner.

For a full review of innovation trends in VR and AR markets, download our free white paper, where we explore this in more detail. With minds wondering about future applications, this will be an exciting area that we will continue to monitor.

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