AR GO! Augmented Realities and Retail

On 12th July 2016 the share price of a tech company leapt up by $7bn – 25% in a single day – on the back of a free-to-download mobile phone app which is now installed on more phones in the US than Twitter or Tinder. The same app has resulted in multiple accidents, robberies from players lured to secluded locations, and unintentionally steered an unsuspecting woman to a fresh corpse. For those of you who have not yet heard of Pokémon GO, you almost certainly will very soon. Using a smart phone with a built-in camera, players can look at an area to spot and interact with the eponymous Pokémon which are superimposed over the environment on the screen. These creatures can then be used for trading or battles with other players. App users can also visit real locations which have been tagged on the in-game map as places of interest for trading and virtual activities.

The app is reported to have been created as an April Fool’s joke by creators Niantic, previously owned by Google. Indeed, Niantic’s CEO, John Hanke and many of his team are veterans of Google Maps and Google Earth. Much of the magic which allows for GO’s functionality is based both on this experience and a vault of user data collected from Niantic’s last game, Ingress, where players marked interesting places for use in the game. Niantic have also used geographical environmental data such as bodies of water to determine which Pokémon creatures should appear in that area. Hanke has more recently suggested that augmented reality (AR) headsets could also be used with the game, and wearable devices which vibrate when a player is near a Pokémon are already being marketed.

Context Pokemon

Pokémon in my office

Nintendo, who last year invested $30m in Niantic and now enjoying the equity fruits mentioned above, are generating revenue through in-app purchases – a common feature for free-to-play apps – but also in new ways which have great significance for high-street retailers. With their previous title, Ingress, businesses could pay for places of interest to be located inside their retail stores, drawing in players with promises of in-game goodies. The beauty of this system is that players do not have to give permission to be shown advertisements, and are inadvertently and willingly pulled into a retail space. Several US retailers are already looking into virtual awards for players who enter their location tied to a geomarketing deals with Niantic.

Hype aside, the mapping and tagging functions are by no means perfect and have already caused controversy. Criminals in the US have been using the app to target unsuspecting players heading to game locations, and Baltimore prison was recently discovered to be an in-game gym. As the Pokémon catchphrase goes: Gotta catch ‘em all!

AR combined with GPS and digital mapping is already being exploited in other sectors such as healthcare. Sweden’s Brighter have created a virtual bicycle experience, jDome, which allows dementia sufferers to pedal through their early neighbourhoods and has recently been adopted by care homes all across Scandinavia. The potential of these technologies for a gamut of industries was espoused at CONTEXT’s VR Summit last week by a number of leading experts including the University of Reading’s Dr Matthew Nicholls who over the last seven years has constructed a virtual model of ancient Rome: “VR allows people without a £250,000 research budget to pick it up and use it. Visitors to the department find it extremely compelling and it’s a great way of bringing an ancient space back to life”.

For Nintendo, the blurring of physical and virtual reality for gaming is nothing new; following the success of the Wii, and by combining this with their highly profitable franchises and the ubiquity of smart phone devices they have created a Pokémonster (sorry for the pun, but share prices speak for themselves), and one which could play into the hands of the brick-and-mortar retailers wanting feet through the door.

by JW

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