Pokémon Go: a new age in augmented reality

Pokémon Go © Getty images
Pokémon Go is the latest craze to hit the streets

I have a confession to make. When it comes to spotting tech trends, my record isn’t great. Back in the early noughties, I was probably one of the first (and last) people to buy a MiniDisc player, just before downloadable music swept away physical formats.

Before that, in 1999, I desperately wanted a little handheld device with a keyboard that I could type on for when my Pulitzer-prize-winning career in journalism kicked off. I forked out £250, a lot of money for a 16-year-old at the time, on an Oregon Scientific Osaris personal digital assistant (PDA). You could slot your mobile into the back at terrific expense, and hit the information superhighway. I should have waited for a netbook.

Even as a child, I didn’t fare any better. While everyone was having fun on their Nintendo Gameboys, I pestered my parents for a Sega Game Gear, which guzzled batteries. I waited for mine to charge. But hey, it had a colour screen.

Spotting the next big thing is notoriously difficult. Remember wearable tech? OK, that hasn’t completely disappeared, but even Apple hasn’t been able to make good on sales of its “Watch” – electronic wrist-wear that you can hook up to your smartphone.

Then there were 3D films. Remember the fuss over Avatar? I remember being blown away by the 3D effects at the cinema. But that was seven years ago. I’m struggling to think of a big-budget 3D film that has caused a comparable stir since. If you can, feel free to let me know in the comments below.

3D TVs? Forget about it. But maybe with time, these things will make a comeback. Whoever spent their childhood digging for the 3D red and green glasses at the bottom of a packet of Rice Krispies will know that 3D has been around for a while.

And anybody who writes off Pokémon Go does so at their peril. If you don’t yet know what Pokémon Go is, don’t worry, you soon will. It is everywhere. If you see young people walking into lampposts and wading through rivers, you will soon know why. And to think the smartphone game was only released in the UK yesterday.

Pokémon Go is an app that you can download for free. The Pokémon characters, which are adorable little creatures with formidable fighting powers that they use to engage in duels with one another – a cultural export from Japan, you’ll be surprised to find – are overlaid on a real-life map.

So, you download the app and walk around with your smartphone in your hand, finding Pokémon. When you find one on the map, perhaps outside your local pub, you capture it using “balls” and take it to a gym (potentially a real-life gym), where you unleash it on other Pokémon.

Sounds far-fetched? Well, it’s gone down a storm in other countries where it was released first, and despite being out for just over a day, it is showing every sign of catching on here too. As a 30-something, I’m far too out of the loop. Luckily my colleague, Steffie, who recently turned 21, was on hand to bring me up to speed.

Now, surely, I put it to her, nobody would physically go out of their way just for the sake of bagging a Pokémon. For starters, they’re not real.

Wrong.

On her way to work this morning, Steffie got off the train early, so she could bag a Pokémon. Then she got back on the train, and resumed her journey. It took her an extra 20 minutes.

What is the best thing about Pokémon Go? “I’m walking a lot”, she says. She is also learning about her local area. She walked past a memorial she had never noticed before and the game pointed it out to her.

Nintendo, which teamed up with San Francisco-based game maker Niantic, to produce Pokémon Go, is already reaping dividends. To see just how lucrative it has been, check out the chart below. That steep line soaring up into the corner is Nintendo’s (Tokyo: 7974) share price since the start of this month. Most of the ascent has come in the last week.

Nintendo share price chart

(Source: Bloomberg)

So why all the hype? Well, you might not be too surprised to learn that Steffie’s search for Pokémon took her into a Starbucks. If coffee shops, restaurants, airports – I’m thinking out loud here – were to start paying to host “PokéStops”, that’s a lot of advertising revenue heading Nintendo’s way. It seems the game designer, Niantic, is fielding a lot of interest in that area from would-be “PokéStop” hosts. A message on the request form reads: “Due to the incredible number of Pokémon GO downloads, some trainers are experiencing server connectivity issues. Don’t worry, our team is on it!”

Should you snap up shares in Nintendo? It’s now trading on a price/earnings of 202, which is, to say the least, expensive. And fads come and go, remember – who’s to say Pokémon Go will be any different?

The chart above is also beginning to look a little like the start of the classic “hype cycle”. This is when tech investors get all excited over an investment, driving the price into bubble territory, where, of course, the bubble pops, and the price falls back down to earth with a thud. Sanity returns, the investment price shakes itself off and resumes a steady, more measured climb, illustrated in the chart below.

The Hype Cycle

But as I said earlier, anybody who writes off Pokémon Go does so at their peril. Not because of the game itself, but because it is arguably the first big experiment in augmented reality gaming that certainly I can think of, and what a success it has already been.

So, while my record when it comes to spotting tech trends isn’t great, I wouldn’t be too surprised if we see a lot more games like this. And why stop at games? How about supermarkets where you point your smartphone at a product and you see an ad. Or how about education? Point your phone at the Forum in Rome and see it come to life – remember Steffie’s memorial? The possibilities are endless. This is definitely one trend to keep your eye on.