July 11, 2016

Augmented reality Pokemon game added $8 bilion in value to Nintendo and will transform mobile and augmented reality gaming

Pokémon fever is sweeping the globe thanks to a new augmented-reality version of the monster-collecting game, which sees players hunt through real-world locations for digital critters.

Pokémon Go officially launched on iPhone and Android last week in the US, Australia and New Zealand, but people worldwide have been unofficially downloading the app and heading out to build their collection.

To play, you walk around the real-world, following a Google Maps-like interface, until signs of a nearby Pokémon appear on screen. When you hold up your smartphone camera, the Pokémon is overlaid on the screen using augmented-reality, allowing you to capture it.

Nintendo's stock price is up over 33% which represents about $8 billion in value from the augmented reality game.

The app is created by Niantic, an augmented reality game maker spun off from Google in October 2015, and it was built in collaboration with the Pokémon Company. Nintendo is an investor in both Niantic and the Pokémon Company (which receives around 30 percent of Pokémon Go's revenue, says The Financial Times), but the app is free to download, with Nintendo's revenue generated by in-game microtransactions.

The Pokémon Company is responsible for marketing and licensing the Pokémon franchise. It was established through joint investment by the three businesses holding the copyright on Pokémon: Nintendo, Game Freak, and Creatures. In 2009, Pokémon USA and Pokémon UK merged to become The Pokémon Company International, which handles American and European Pokémon operations under the administration of Kenji Okubo. The company's offices in the United States are in Bellevue, Washington and its offices in the United Kingdom are in London. Australian operations are controlled by Nintendo Australia. The Pokémon Company reported $2 billion in retail sales for 2014 and $2.1 billion in 2015

Motion Capture and the Nintendo Wii

The Nintendo Wii rapidly accelerated the motion capture market in 2007 with the success of motion capture with its game platform. Sony and Xbox followed with their higher fidelity motion capture systems.

Pokemon Go allows players to capture, battle, and train virtual Pokémon who appear throughout the real world. Although the game is free-to-play, it supports in-app purchases. An optional companion Bluetooth wearable device, the Pokémon Go Plus, is planned for future release and will alert users when a Pokémon is nearby.

Clearly Pokemon Go will launch a wave of similar style games with different themes.

Pokémon Go has generated safety concerns mostly due to distraction during play and the ability for individuals to be lured to a certain real-life area by in-game rewards. On launch day, the Northern Territory Police, Fire and Emergency Services reminded players to "look up, away from your phone and both ways before crossing the street". The same day, while using the game, a Wyoming player stumbled across a dead body that was floating in a river. Furthermore, the app led players to congregate near strangers' homes, as in the case when a Pokémon Gym was placed near a church converted to a house. Other incidents include multiple minor fall injuries and armed robberies

There will be a ton of device innovation and multi-player augmented reality game innovation.

All genres and other successful video games and entertainment franchises will make attempts to replicate the Pokemon success.

SOURCES- New Scientist, Theverge, wikipedia, Google finance

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