Pokémon Go has certainly brought augmented reality into the mainstream. Prior to the launch of this incredibly popular mobile game, augmented reality was a niche technology and there was plenty of doubt that it would ever catch on outside of educational or experimental applications. Thanks to Pokémon Go, augmented reality is now a viable technology in a wide range of markets. As companies in various sectors begin to explore this innovation, AR becomes a more attractive pursuit for investors than other emerging technologies such as virtual reality.
The Halo Effect of Pokémon Go
As of October 2016, Pokémon Go earned $600 million in revenue for Niantic Labs, which is now worth over $3 billion as a result of the game’s success. In addition to generating millions via in-app purchases, the game also helped to increase Nintendo’s hardware sales by 19 percent. This is likely due to the perfectly-timed release of “Pokémon Sun & Moon” for the Nintendo 3DS in November 2016.
The halo effect has extended far beyond Nintendo, as local businesses continue to thrive thanks to the unique marketing opportunities offered by Pokémon Go. In fact, plenty of local businesses have greatly benefitted from the huge success of the game and have used it to their advantage in creative marketing campaigns.
Modules attract more Pokémon to a Pokéstops. Businesses that are located near Pokéstops can drop modules to attract more customers. In fact, L’inizio Pizza Bar in New York saw a 75 percent increase in business after using just $10 worth of lures at its location while some restaurants just sat back and enjoyed 10 percent increase in sales simply due to being within the proximity of a Pokéstop. Another great example is The Denver Zoo, which launched its own promotion based on this concept and offered a $5 discount to visitors with Pokémon Go on their phones.
Other popular promotions saw businesses providing customers with discounts based on their level or whether they had joined Team Instinct, Team Valor or Team Mystic. This presented a unique option for attracting Pokémon Go players to shops and restaurants that they would not otherwise patronize.
These strategies have certainly paid off. Slant Marketing found that Pokémon Go’s various features have had an incredibly positive benefit on local businesses:
- 51 percent of players visited a business for the first time because of Pokémon Go
- 68 percent of players visited a business because lures were placed at the location
- 71 percent of players have visited a business because Pokéstops or Gyms are located nearby
The positive effect of Pokémon Go on local businesses demonstrates that augmented reality can be beneficial when used in marketing campaigns. As AR technology becomes more commonplace, we can expect to see more brick-and-mortar businesses using it to attract more customers. We may soon see retailers using augmented reality to display hidden promotion tags or to send customers on scavenger hunts to try out new products. There are endless possibilities in the retailer market that could boost in-person sales.
Pokémon Go Has Made Augmented Reality ‘More Approachable’
Before Pokémon Go, augmented reality was not a very well-known technology. Many users are unaware that Ingress, launched in 2014, was one of the first games to use AR. However, the game failed to attract relative widespread appeal with just 7 million players worldwide at its peak, despite the use of innovative technology. Pokémon Go has had a much different experience and is considered much more approachable, as it has associated augmented reality with a familiar brand that is recognized by people of all ages.
Mark Cheben, Global Marketing Manager for EON Reality, has lauded Pokémon Go for its ability to make augmented reality a more accessible technology. The game is being played around the world by young children from the age of two-years-old, demonstrating that augmented reality can be grasped by just about anyone. It has a more widespread appeal than the emerging technology of virtual reality, which should not be used by people under the age of 13, so investors can expect to yield better profits by investing in companies that are focused on AR developments.
“Pokémon’s influence on augmented reality is to make it much more approachable to the average person,” Cheben said in an interview with 3RockAR. “It isn’t some overly technical or niche thing anymore”.
As such, we are starting to see various new applications for augmented reality that extend beyond gaming. It is being used to engage all types of people, regardless of their proclivity for experimentation with new technology. It applies across a wide range of industries.
Augmented reality can be used in the manufacturing industry through smart helmets and smart glasses. AR devices developed for manufacturers would allow workers to visualize what products will look like when they are finished or if they need to undergo repairs. Lockheed Martin uses augmented reality to train its engineers, allowing them to see renderings of various parts when assembling components. This method has helped to increase their accuracy by 96 percent.
Retailers are also using AR technology to enhance the experience of shoppers. Stores across Convent Garden participated in an interactive event over the holidays that offered up various promotions. These included:
- Swing tags on in-store items that unlock ‘gift picks’ from fashion editors of “Esquire”, “ELLE” and “Cosmopolitan”
- AR posters and stickers in shop windows that reveal special offers
- A Pokémon Go-style hunt in which customers found hidden reindeer to earn a ticket into a prize draw
Sephora has done a fantastic job of integrating AR technology into customers’ retail experience. The Visual Artist tool allows users to virtually test products using their smartphones. It acts as a “magic mirror” that shows customers what different shades of lipstick would look like or how various lash treatments would suit their eyes. As of September 2016, the app has seen 45 “try-ons.”
These applications demonstrate that augmented reality is a wise investment. In fact, technology experts expect that it is a better investment that virtual reality. Since AR applications can be used on smartphones, tablets and mobile devices that consumers and businesses already own, it is a more approachable technology from a financial standpoint. Virtual reality headsets cost between $600 and $800 and require a PC that can support the technology.
Investing in Augmented Reality
The success of Pokémon Go shows that augmented reality has staying power. Following Niantic’s lead, plenty of big-name companies are investing in this novel technology. It is a good idea to consider investing in companies that have been quick on the uptake of augmented reality technology. They are more likely to see a return faster than they would with companies that are more focused on virtual reality developments like GoPro, NVIDIA and Sony.
Disney has created its own AR experience for guests at Walt Disney World Resort hotels that takes visitors on a Stars Wars adventure. AR technology will guide guests on a secret mission after the Rebel Alliance has left