Following the money trail on augmented reality and location-based services.
By Reena Nathan and Andy Vogel
When Pokemon Go first arrived, it swept nations off their feet. The early days of location-based services and monetisation as seen in Pokemon Go shows how successful this new trend in gaming can be. For a moment in time, it had more users than all other games combined.
According to Niantic Labs, since its launch in July, Pokemon Go has been downloaded more than 500 million times globally, and players have walked over 4.6 billion kilometres while playing the game.
This success has added US$7.5 billion to Nintendo’s market value, and just as quickly removed it when it was revealed that it was Niantic, and not Nintendo that was responsible for the game. NextShark profiled the “overnight success” of Niantic’s CEO Mr John Hanke and the product 20 years in the making. The launch velocity of this game had everyone trying to decipher how to take advantage of the augmented reality phenomenon.
A new marketing model?
So Niantic has proven something that was unimaginable before; namely, that a game can help you grow an extra-large audience organically without a lot of marketing spend. How? One way is by becoming a PokeStop. Niantic plans to introduce sponsored locations in Pokemon Go, like it did with its first location-based, augmented-reality game, Ingress. The game saw businesses, such as US-based Duane Reade and Vodafone in Germany, pay to become “portals”.
In Japan, McDonald’s partnered with Pokemon Go to ensure that every outlet in the country is either a Gym or PokeStop, attracting both virtual Pokemon and physical players – a strategy that can be used by any Singapore business looking to convert players into paying customers.
In fact, here in Singapore, Resorts World Sentosa (RWS), Singtel and CapitaLand Ltd have all succeeded, in one way or another, in attracting Pokemon trainers to their establishments. How? By scattering “lures” in or near their premises. (A lure module is an in-game feature that enables users to attract Pokemons to a PokeStop for up to 30 minutes.)
In August, RWS released “lures” at various timings at Universal Studios Singapore and S.E.A. Aquarium, as well as at Festive Walk, Lake of Dreams and The Forum, a dining hotspot at RWS. For every five Pokemons caught within an hour on its premises, players get a 10% discount for entry into S.E.A. Aquarium and Universal Studios Singapore.
Similarly, “lures” were released at PokeStops near 10 Singtel outlets, and at CapitaLand’s ION Orchard and City Square Mall. The result? All of these establishments have reported higher business activity and healthy spending by shoppers.
However, nothing beats LunchClick’s innovative marketing strategy. In August, the dating app launched a Singles’ Pokemon Hunting Event, where singles form teams to compete in catching Pokemons. The event sold out in three days. The overwhelming response led to the company launching a second session to meet the demand.
If there is anything to be learned from the success of these businesses, it is that Pokemon Go offers a way to increase customer traffic and ultimately profits. And it does not cost much to buy “lures” – one “lure” costs no more than $1.50, and are even cheaper if purchased in bulk.
Still not convinced? A New York Post article reported that the manager of a New York pizzeria was able to drive up business by more than 70% using only US$10 worth of “lures” – a low-cost strategy worth exploring, especially for start-ups in Singapore. But it is important to note that higher footfall does not always guarantee more sales. It is still up to businesses to find innovative ways to get trainers to buy in-store products and services.
Here's a tip: Once players are lured in, go one step further by offering targeted promotions and special discounts. It is also worth keeping in mind that the game needs constant network connectivity, so make sure your business premises offers a faster, smoother and more reliable WiFi connection.
Like a fad, will it soon fade?
Pokemon Go is not just the most successful game ever, it has cemented location-based services and augmented reality firmly on the radar screens of any company engaged in advertising or services of any kind.It is all of what you have played or read about and more – US$200 million in the first month post-launch in revenues and growing. Adding to that success is Apple’s recent announcement that Pokemon Go will land on the Apple Watch by year-end. When asked at a technology event in September if the game will also be made available on Android Wear, Hanke said: “Pretty likely.”
Some argue that this level of interest in and popularity of Pokemon Go will one day fade away, leaving businesses with unsustainable marketing campaigns.
But while it is still strong and growing, especially in Asian markets, it makes both business and strategic sense to leverage and invest in the game’s popularity to increase brand awareness, presence and visibility – all of which may help companies stay in business long after the Pokemon Go craze wanes..webp)