John Hanke created Niantic Labs as an internal entity within Google. Google scooped up Hanke when they bought out a startup firm he worked for known as Keyhole. This company is considered to be the predecessor to Google Earth and Google Maps. There are conflicting reports on whether it was Hanke’s company or if he simply worked there and Google obtained his leadership after the buyout.
As of the date of this writing, Niantic Labs is a private company. Private companies are not required to release financial information and many don’t for this reason. However, Citibank has estimated, based on projections, that Niantic should bring in over $750 Million (taken from a CNN Money report from July 2016: http://money.cnn.com/2016/07/25/technology/niantic-unicorn-pokemon-go/)
The concept behind Pokemon Go is said to have started as an April Fool’s Joke. Google announced in 2014 that they were going to release a training tool which could hunt Pokemon using Google Maps.
How the Company Started
John Hanke worked for a company called Keyhole whose technologies were the predecessor to Google Maps and Google Earth. Hanke felt there had to be a way to incorporate gaming into those technologies and created an internal company called Niantic. Google encourages these types of internal entrepreneurial entities.
Niantic developed a game called Ingress, which remains a popular game to this day. Players of the game would join one of two teams, and each team had to capture the most game pieces before being captured by the other team. The game is considered the predecessor to Pokemon Go and similar technology is used.
The game also addresses concerns many parents have about their kids playing video games and not getting enough exercise. The game requires people to move (walk, run, bike, etc.) to the destinations where each character appears. It also has interactive capabilities with other players to try and obtain the pieces by virtual force.
In 2015, Hanke pitched the idea to spin off Niantic and received $30 million startup funding from Google as well as Nintendo and Pokemon.
The company is still relatively new and is experiencing some growing pains. One big problem, despite warnings on its website, is players who are getting so hypnotized by the game that they are putting their lives in danger. Some are even walking into traffic without looking.
There have been reports of shootings of players, one of which broke into a house and the homeowner shot and killed the player and wounded his cousin who was also involved in the game.
Another problem the company has run into is server crashes. This is due to the vast number of people signing up within a short amount of time. While overall this is a good problem to have, it is something they have had to contend with.
One of the biggest problems arising from gameplay is people using it while they are driving. This has caused several accidents.
More subtle problems are battery and data usages during gameplay. Players need to make sure they have ample battery power and have a means of either recharging while playing or swap out another battery.
The game is addictive, so if players don’t have a data plan that is generous, they can expect to pay some overages on their plan.
Why it Works
Pokemon Go ties Massive Multiplayer Online Role Playing Games (MMPORPG) concepts with a concept known as Augmented Reality (AR). This differs from Virtual Reality (VR) in that VR has its own environment and surroundings whereas AR incorporates the real world as part of its environment.
Pokemon Go is not like most games (except perhaps its predecessor Ingress). It gets people involved in ways that no game has done in the past. The game is free, although enhancements can be added at a cost.
It’s hard to imagine the company being as successful without the resources provided by parent Google. Massive upfront capital would have been necessary for anyone else to pull it off. The technology and necessary data were ready for the taking by Niantic. It helps that Hanke ran the division for geolocation applications.
The game has also managed to bring players together in ways never thought possible. Players are creating groups, outings, etc. As gameplay progresses, players form alliances to advance to even higher levels.
There is a cult-like atmosphere associated with the game. People either are 100% on board with the game, or they despise it. Some even go so far as to say it has a demonic nature to it in that the game is stealing away people from their day-to-day lives.
Getting the Pokemon Company to embrace this concept was easy for Niantic. The CEO of Pokemon was an avid player of the game Ingress and was at a higher level than Hanke, who also frequently played.
The biggest promotional aspect of the Pokemon Go is via word-of-mouth. Players tell their friends who in turn, download the game and start in on the craze. The media buzz has made it almost like a dare to play the game. You can’t help but wonder what the buzz is all about which makes it more enticing to play it.
Recent news has the company incorporating advertising into the game. They also have a strong forum and YouTube channel that has inherent traffic from the start. The company uses these mediums to get any updates and news to players.
There are many resources on the periphery of the game where players can learn to become better players. This will only help the company grow as more players become proficient. A search in Amazon’s book or Kindle section shows listings of these resources. They include tips, guides, and cheats, etc.
There have been reports that the Pokemon Company is going to allow trading Pokemon and the Go Interface will be set up to allow for that. This will likely make the already viral game explode even further. Fans of Pokemon know this is a huge feature and has been an integral part of its history.
On the Google Apps store, Pokemon Go received 4.1 stars at the time of this writing. Most negative ratings had to do with features, which some complain the game gets boring after a while. One user complained about how the game would be better if you didn’t have to walk everywhere.
Of course, this is one of the main motivations behind the game, i.e., to have its users get more exercise while playing. Perhaps this particular reviewer didn’t get the memo?
Google takes investments seriously, and it’s doubtful Pokemon or Nintendo would have pitched in money if Niantic didn’t have plans in the pipeline for enhancing the game. Players need to give it time to evolve. Niantic also has plans for other games in the AR arena.
Lessons Learned By The Business
- Using Ingress as a model, Pokemon GO needed to cater to people in any sized geographic location. Location-based games are often not popular in smaller locations. They set up the game to link cities together so that the landscape seemed larger than it really was.
- The company has managed to incorporate the proof-of-concept of location-based games via Ingress and married it with the popularity of Pokemon. This takes both components to new levels.
- Niantic clearly saw the growth of geolocation apps as promising. It was a natural progression for them to include that as part of an engine for a next generation type of game.
How Other Businesses Can Learn From This
When you have a vision, stop at nothing to make it happen. John Hanke saw the potential in the various technologies from his expertise. When your vision is strong, you will find others to support that vision.
Major players like Pokemon, Nintendo and Google themselves saw little difficulty in providing serious startup funding for Niantic. It didn’t take much to see this initiative was going to be a success.