Pokemon Go has already become an overnight Internet sensation, catching the public in a whirlwind of market predictions, memes, satirical articles, and the story about the user who walked off a cliff. But Pokemon Go will no doubt be bigger than a week-long Facebook news headline. There will be longer term effects that many people haven’t begun to think about yet.
Firstly, the safety issue. This has already made headlines time and time again. Someone fell into a hole and broke both of their legs. Then two people walked off a pier and fell into the lake trying to catch a water Pokemon1. Two more people walked off a cliff 2. Highway signs now read “No Pokemon Go while driving” and kids bike around with their phones zip tied to their handlebars3. The solution? Pokemon Go Plus, a wearable device, synced to your smartphone, that vibrates and lights up when you’re near a Pokemon. Release date predictions have it coming out as early as July 31 and people have already started pre-ordering from Gamestop4. The effect? Nintendo’s stock doubled within a few weeks of Pokemon Go being released. Now it’s fallen more than 10% as market analysts point out that Nintendo doesn’t receive as much direct profit as one might think – it could be overvalued5. Nintendo has to share with others involved in the project, most notably Niantic, the developer6. Pokemon Go Plus sales are expected to increase Nintendo’s (direct) revenue, however, so it could end up being the boost Nintendo needs5.
Due to its wild popularity, there have been a number of bugs and server crashes. Each time a new region launches Pokemon Go, servers go down around the world. More recently, they’ve gone down unexpectedly for no discernable reason. The most frustrating part for the hopelessly addicted users is the lack of explanation from either company7. There’s also been some social media venting from parents who’ve watched their children’s phone bills skyrocket because going over on your monthly data is worth it to catch Pikachu. The effect? More infrastructure is needed to support this type of game. If augmented reality catches on (and I think most people would agree that it has), app developers and cell phone providers are going to have to step their game up8.
Another big upset caused by Pokemon Go is the privacy settings. Nintendo has access to an enormous amount of users’ personal information. Initially, the app requested access to your entire Google account, meaning search history, Gmail, and Google Drive documents – way beyond what’s necessary to play. This was deemed an “erroneous” request by Niantic and has since been removed9. Additionally, the game has to track players’ movements (understandably) and can predict where users will go next. Users can also see where other users are. Aside from a few privacy and safety complaints though, Nintendo and Niantic have struck gold. Personal data is worth a fortune10. Ever notice that when you search for flights or hotels all you see is Expedia ads for the next 3 months? Companies like Google and Facebook track your activity, interpret what you like, and use that knowledge to sell targeted ad space and information. If you’re curious to see how uninteresting and worthless your browsing habits are to advertisers check out the Financial Times personal data calculator. I’m worth about 17 cents.
But, factor in another 1.65 billion users and you can estimate how much companies like Facebook profit off of you11. Pokemon Go isn’t quite in that league (yet), but it did become one of the most popular apps in a matter of days – it has more daily active users than Tinder and almost as many as Twitter12. The effect? Pokemon Go will stalk your movements and make a fortune. In the 2 weeks since its launch it’s generated over 35 million USD in revenue. It hasn’t even launched in Japan yet, the birthplace of Pokemon. Imagine how the user base will skyrocket then.
Another big way Pokemon Go stands to generate profit is through Pokestops, gyms, and lures. Briefly, a Pokestop is a place with lots of Pokemon, a gym is where you train Pokemon, and lures attract Pokemon. On the more provincial side of things, small businesses have already begun buying lures (through in-app purchases) to attract Pokemon and, by extension, users, to their stores13. On the bigger side of things it’s been confirmed that every McDonald’s in Japan will be either a gym or Pokestop, making McDonald’s the first major company to partner with Niantic for Pokemon Go14,15. Information on the deal was leaked in an email, which, in addition to Pokemon’s wild popularity in Japan, caused the country’s launch to be delayed another week16,17. The effect? Pokemon Go may not end up being the “cure for childhood obesity” after all that walking leads users right through the golden arches. The more important effect? These methods of luring users with Pokemon hot spots will prove to be hugely profitable. It’s only a matter of time before similar Pokestop agreements are arranged with companies all over the world.
Finally, Pokemon Go is shaping up to be the catalyst that brings augmented reality into the mainstream. Virtual reality has created some buzz in recent years, but augmented reality could eclipse it. Google is already working on Tango, a platform that allows mobile devices to determine their position using computer vision rather than GPS. They’ve already created a smartphone capable of this, which was mostly purchased by developers18. We’ll likely see a wave of augmented reality based apps in the near future as other developers jump on the bandwagon – perhaps compatible with Tango smartphones.
Overall, the effects of Pokemon Go are big. There are definitely some concerns to take care of: safety, privacy, and infrastructure. But it also brings exciting opportunities: mass data collection, partnerships with businesses, and the further development of augmented reality. Already, Pokemon has reframed the way people think about apps and gaming. We used to picture a kid with a console and eyes glued to the TV, then a kid swiping and tapping on a tablet, and soon we’ll picture a kid holding up their phone to see an augmented version of what’s really in front of them. It could even teach millennials some social skills. Rather than text and tag each other in memes we’ll be forced to interact as we’re drawn to a central location, like Pokemon to a lure.
By Samantha Schmidt