Pokémon Go studio revs up pipeline in quest for next AR hit

By Takashi Mochizuki

Pokémon Go developer Niantic Inc. plans to release two titles over the next six months and sustain that pace annually, accelerating its pipeline in hopes of scoring its next augmented-reality hit.

Niantic defined the AR genre by developing the 2016 release of a game based on Nintendo Co.’s endearing Pokémon franchise and it now has 10 more titles in development, according to its top executive. Adapting to the Covid-19 outbreak, the company is hosting its annual festival online this year and also altering its gameplay design so people can keep playing at home.


“We’re hard at work on our games pipeline with a multiyear product road map made up of games and other forms of AR experiences,” John Hanke, chief executive officer of the San Francisco-based studio, told a group of reporters last week. “We are extending the concept of what constitutes a Niantic game in a variety of ways,” he added, without elaborating.

AR technology, which blends digital elements with real-world environments, is seen as one of the next big leaps in mobile tech and many firms are gearing up to seize the opportunity. That includes Apple Inc., which Bloomberg News has reported will build 3-D cameras into this year’s iPhone generation like it’s done for the latest iPad Pro. Formerly a part of Alphabet Inc.’s Google -- which has its own AR ambitions -- Niantic is in charge of the most popular AR app in history with Pokémon Go.

Now four years old, Pokémon Go remains one of the highest-grossing smartphone games today, with Sensor Tower estimating it generated $908 million last year. The game tasks players with tracking down Pokémon by exploring the physical world and casting digital Pokéballs on their phone screen. In-game upgrades and consumables are available to buy to speed progress up.

The biggest beneficiary from Niantic’s business is probably Nintendo, as the Bay Area outfit shares Pokémon Go’s revenue with the Kyoto-based giant through the app’s co-developer Pokémon Co. Nintendo also owns an undisclosed stake in Niantic, which remains private.

The Covid-19 outbreak presented several challenges to Niantic and Pokémon Go, Hanke said, as people didn’t explore the outdoors to hunt for Pokémon characters the way they usually would. But that also served as an opportunity for the company to brainstorm how it could offer more indoor-playing functions, he said.

Hanke said the company’s long-term design goal is to make a quarter of every game playable without leaving the home, as it hopes to bring the AR experience to a wider range of people, including those who have difficulties traveling alone.

Pokémon Go now counts the number of steps earned by indoor workouts -- steps are an essential component of hatching eggs inside the game -- allowing players to keep progressing at home. As a result, Pokémon Go’s revenue from the start of February to the end of May this year increased by 6% from the same period last year, according to Sensor Tower data.

In support of worldwide social distancing precautions, Niantic is hosting its annual Pokémon Go Fest digitally for two days from July 25. Past events have attracted large crowds in major cities such as Chicago, Japan’s Yokohama and Germany’s Dortmund, though many players still missed out because of geography and limited tickets. This year, Niantic said tickets are available for $15 each and open to anyone interested in participating.

Hanke said the company will continue encouraging players to encounter the real world. One upcoming initiative is a local business recovery program, wherein players can nominate their favorite local establishment and Niantic will turn it into a Pokémon Go replenishment station free of charge, letting players fill up on Pokéballs, potions and berries while helping drive clientele through its doors.