The Technology Behind “Pokemon Go”

“Pokemon Go,” a game that has millions of people roaming around the physical world to capture virtual characters, has been the hit of the summer of 2016. The allure is largely due to the app’s reality aspect, which in technology terms advances virtual reality one step further to a place that not many gamers have been.

What makes “Pokemon Go” different from the other mobile games is that it takes commonplace technologies such as GPS, mapping and satellite services and combines them with location services, landmarks and Nintendo’s familiar characters.
The players see their avatars wandering real-world terrain using a map that includes Pokestops, which are real-world landmarks such as churches or public art, and virtual gyms to test their skills. Characters are caught with Pokeballs. As a bonus, a screen shot can be taken that shows a mix of virtual Pokemon characters and real-world terrain. The goal is to capture the 151 original Pokemon. The game makes money through in-app purchases for powers and in-game currency.

Analysts are especially intrigued with the potential of “Pokemon Go” as a marketing platform.
According to Wharton marketing professor David Bell, “Pokemon Go” and augmented reality can point the way to more local advertising and immersive marketing. “I see the direction for augmented reality going into advertising,” says Bell. “The next evolution of the Internet will be to immerse yourself into an environment… Augmented reality puts you in tune with the local environment and context is amplified.”

Following the initial success of “Pokemon Go,” analysts quickly began debating how much money Nintendo would actually make from the game.

Macquarie Research analyst David Gibson said the economics behind “Pokemon Go” are a bit fuzzy. “The title was jointly developed by Niantic, The Pokemon Company and Nintendo. It is unclear exactly what their economic interest is in the game, but we presume that out of every 100 units earned at the App Store, 30 would go to Apple (or Google Play), 30 to Niantic, 30 to Pokemon and 10 to Nintendo. Hence, we don’t think Nintendo will earn much directly from the game. However, Nintendo will earn income from its equity-accounted income of owning 33% of The Pokemon Company,” he said.

Bell says that the companies that own the mapping and ad platforms will benefit the most. Google has both. “Mapping is so critical because it is key to engagement,” he says. Hsu adds: “The truth here is that Google Maps is the most important part of this project. Location is the gateway to personalization.”