If you haven’t already seen, Pokemon GO is the new joint venture between The Pokemon Company, Nintendo and Niantic, Inc. that has reprised the original Pokemon game into a smartphone-only, augmented reality experience.
The app already has more active users than Twitter, despite it only being officially released in Australia, New Zealand and USA.
Instead of the brand languishing at the bottom of a nostalgic refuse collection, this merger of legacy brand and storytelling with new platforms and technology has created AR’s first killer app.
And there are a number of lessons that can be learned regarding how brands should be thinking about their digital transformation.
Stop being romantic about the past
Pokemon GO is a perfect mix of something users care about, with something that is relevant today.
The asset that is the Pokemon franchise is extremely valuable and it’s as evident today as it was two decades ago.
However, this product could only be executed because Nintendo got out of its own way.
The company has famously resisted smartphone games as mobile inherently devalues the intellectual property that it owns.
However, now it is finally listening to the market as it relates to the business of casual gaming and the results are clear.
Nintendo’s mobile strategy:
2008: what’s an iPhone
2010: what’s an Android
2014: still no
2016: change how society functions
— Aaron Levie (@levie) July 11, 2016
Much has been made of Nintendo’s 58% increase in stock price ($11bn+) since last Tuesday’s launch.
However, the increase isn’t just because this game promises to make that much in revenue; rather Nintendo is realising that in a mobile-driven world, it needs to focus on being an IP licensor rather than just a game maker, as analyst Ben Thompson explains:
The potential that Nintendo has truly woken up to is the latent value in its intellectual property and it is poised to take advantage of mobile’s scale in a far more effective way than anyone thought possible.
New technology needs brand, storytelling and good use cases
This is not the first ever AR experience. It isn’t even the first AR game by Niantic, the creator of the technology that used to be incubated in Google and is now part owned by Nintendo and The Pokemon Group.
However, it is the first to get this degree of success.
While the emphasis in many digital transformation efforts has been around the technology that needs to be created and integrated, the value of brand should not be underestimated in not only creating relevant experiences, but even making new technology commonplace.
Google Glass has struggled to become anything more than a fringe accessory for users in very specific circumstances, yet users of Pokemon GO are happily engaging in augmented reality, as are users of Snapchat via its filters and lenses.
The difference with Pokemon and Snapchat is that AR is simply a byproduct of engaging with a brand and narrative that users are already invested in, rather than the focal point of the product.
This might be the way forward for legacy companies – resurrecting much-loved characters and brands to create meaningful experiences that are enhanced by new technology.
Double down on the strength of your brand and collaborate for the tech
As mentioned previously, Pokemon GO is a three-way venture between Nintendo, The Pokemon Company and Niantic.
The technology that powers the game was created in 2010 by Niantic, which went on to release AR-based games in 2012 (The Field Trip) and 2013 (Ingress).
Rather than Nintendo attempting to create the same capabilities from scratch, inside a culture that has been historically anti-mobile, it made far more sense to invest in the technology startup and work together to build the game.
In fact, one reason for the relatively rapid turnaround (the app took around 10 months to develop) is because it was built off the back of the Ingress game’s infrastructure, but with Pokemon IP.
While most businesses don’t have the spare cash to invest in AR startups, it is entirely possible to outsource and/or partner with a technology specialist to handle what they know best.
This way, brands are free to focus on how their IP can be reimagined in a new world.
Now all of this doesn’t mean Nintendo is saved: Pokemon GO could still be just a fad, albeit one of viral proportions.
Making money out of mobile games is notoriously hard, but the fact that it is both the most downloaded and top grossing app on iTunes bodes well.
Moreover, if history is a reliable teacher, only 1%–2% of users will actually go on to make in-app purchases; are there other ways to monetise Pokemon GO?
Also, is this success something that can be duplicated for Nintendo’s other brands and franchises?
Only time will tell. However, what is clear is that in this fringe case of nostalgia meeting augmented reality, a path for digital transformation has appeared in the quest to catch ‘em all.