Pokémon Go is an augmented reality phenomenon. Statistics generated by the Nintendo-produced game are jaw-dropping: the app is seeing more engagement than Facebook. In its first week of launch, Nintendo’s share price increased by 86 per cent, with almost $15 billion (£9.5bn) added to the company’s market value. And every day, it’s said to generate more than $1.6 million (£1.1m) in revenue.
This is the real phenomenon: in one launch, Nintendo has rewritten its future, and that of its competitors. It’s transformed itself from a potentially finite business writing games and selling hardware – generally one-off transactions – to a business with an unprecedented breadth and depth of data, which has unimaginable value. Pokémon Go is repurposing data to refresh revenue streams. It’s reinventing gaming. It’s rebranding Nintendo. And it’s refueling the power of data.
Pokémon Go’s data
To succeed in Pokémon Go, you need to visit real locations, in person. In real life. The accuracy and precision of Pokémon Go’s location data is absolutely critical – get it wrong, and you risk the wrath of millions of gamers, not to mention neighbourhood residents. Get it right, and you can create a global phenomenon – the merging of physical surrounds with interactive digital experiences. With Pokémon Go, Nintendo has created a new channel for capturing data. Of course, Nintendo isn’t the only company capturing location data and providing location-based user experiences: far from it. From social media location check-ins, to marketers creating targeted geographic campaigns, to local authorities offering ‘Find my nearest…’ services on websites, location-related data now drives some incredible hyper-real experiences. But influencing how people move through the physical world -- that’s clever.
Collating information on how, when, where, why and with whom we move through the physical world has immense opportunity. There are few instances where businesses can capture data generated by large volumes of people in particularly physical locations. I can think only of events, perhaps annual music festivals, major conferences or gatherings at particular landmarks. But Nintendo, as well as capturing where players are and when, can capture context and connections: who travels with whom? What are the connections between that particular group of people?
In the short term, as it’s free to download and play, Pokémon Go has to make money somehow – and it does. It really does. Pokémon Go enables revenue generation in a number of ways:
1. For Nintendo, location-related data capture is pure gold
It enables new ways of generating revenue streams. These revenue streams complement the in-app purchases such as Poke Balls, used to capture more Pokémons. You can buy these at certain locations or PokeStops throughout the game, clearly indicated on a map. Data on these PokeStops, which players need to visit in person, was collected during recent trials so it’s current precise, accurate data.
2. Shops and restaurants who want to be featured in the game pay to be included as locations
A pizza restaurant in Long Island City in the US, cited in the New York Post, has reported a takings increase of 75 per cent, having paid just $10 for an in-game bonus (a power-up) which led Pokémon – and its hunters – to its location. This leads to another revenue stream...
3. Advertising in physical locations
Rather than the pizza restaurant drawing gamers to it, what about placing adverts in physical locations where players congregate? The power of the physical is immense. No longer stuck at home gaming on the sofa, Pokémon players have to get outside -- and they meet people both physically and digitally. And there you have it - another potential revenue line.
Connections become hyperreal. Context becomes key. Data on users becomes invaluable – where are they? Who do they connect with? What experiences are they sharing? How, why, where and when do they play Pokémon Go?
4. The ability to package and sell this data
Which is almost guaranteed to be accurate as it’s tested every day by millions of users. Businesses for whom data is an asset are reaping rewards – think Uber or AirBnB – and Nintendo has become one of them. As long as companies have the correct platforms in place to enable them to cleanse, enrich, link, visualise, and access the data, it becomes a huge asset.
Intentionally or otherwise, Nintendo has undeniably created a paradigm shift in gaming. Competitors are under pressure to reduce time to market for their AR games – that’s if they had them in the pipeline to begin with. Creative juices will flow into this new channel, spawning new ideas, new ways to blend physical and digital worlds, and new methods of monetising gaming. In 12 months’ time there will be a host of AR type games as a new media category, in which precision and accuracy of location is essential.
Suddenly, location in the physical world has been thrown under the spotlight. We’re looking around us at our environments: it’s not hard to spot the difference between Pokémon Go players and non-players. The players are looking up from their phones. They’re looking at their surroundings. They’re aware of being in a physical space. And this awareness of physical space will drive revenue and investment – glocalisation, in which business is conducted and behaviours impacted according to local and global considerations. In creating Pokémon Go, Nintendo has discovered the value of a Single Customer View that embraces context and location, and it’s incredibly powerful.
Tim Barber, VP Software Solutions, EMEA, Pitney Bowes
Image Credit: YouTube