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As you likely know, one of AR’s foundational principles is to fuse the digital and physical. The real world is a key part of that formula… and real-world relevance is often defined by location. That same relevance and scarcity are what drive real estate value….location, location, location.
Synthesizing these factors, one of AR’s battlegrounds will be in augmenting the world in location-relevant ways. That could be wayfinding with Google Live View, or visual search with Google Lens. Point your phone (or future glasses) at places and objects to contextualize them.
As you can tell from the above examples, Google will have a key stake in this “Internet of Places.” But it’s not alone. Apple signals interest in location-relevant AR through its geo-anchors and Project Gobi. Facebook is building “Live Maps,” and Snapchat is pushing Local Lenses.
These are a few utilitarian, commerce, and social angles. How else will geospatial AR materialize? What are its active ingredients, including 5G and the AR cloud? This is the theme of our new series, Space Race, where we break down who’s doing what….continuing here with Niantic.
Planet Scale
Though Niantic has risen to prominence with Pokemon Go, its larger play may be its location-based AR gaming platform, the Real World Platform. This takes Pokemon Go’s architecture and spins it out as a platform on which other developers can build games and experiences.
This could be a valuable toolset given that it enables app developers to build experiences on top of the infrastructure that Niantic spent years building. That includes things like scaling up to surges in user behavior, compelling game mechanics and geospatial interactions.
For the latter, Niantic has developed considerable aptitude in geolocation as it’s a core Pokémon Go function. As this develops — along with crowdsourced spatial mapping from Pokémon Go players — Niantic continues to evolve Real World Platform’s geospatial data backbone.
Expanding on the crowdsourcing approach, Niantic’s “mapping tasks” program incentivizes players to scan local waypoints. This is part of an effort to scale up spatial maps for Real World Platform. It can fill in some last-mile gaps for richer point clouds in high-value locales.
Altogether, this advances Niantic’s vision for “Planet Scale AR.” The idea is to combine geospatial data and computer vision to enable meaningful real-world interaction. Niantic’s 6d.ai acquisition meanwhile elevates AR cloud-building potential and spatial-mapping chops.
Business Case
Real World Platform is similarly elevated by previous Niantic acquisitions like Escher Reality (multi-player & social AR) and Matrix Mill (occlusion and computer vision). We could see more startups join the mix, as well as ongoing advancements in underlying tech such as LiDAR.
As all of these pieces evolve, Real World Platform will represent an expansion play for Niantic in that it productizes the underlying software for its AR games. In that way, the platform follows the path of one of the greatest enabling tools the tech world has ever seen: Amazon Web Services.
Just like AWS, Niantic built its engine primarily to power its own products. But then it discovered the opportunity to spin it out as a platform. And like AWS, Real World Platform could be a scalable revenue stream, making it both a strong business case and a valuable utility for the AR industry.
Altogether, Niantic is in a strong position with momentum, good tech and brand equity. It’s using that to double down on its positioning as an AR leader. The platform approach also lets it diversify – adding Saas revenue streams to already-strong in-app purchase (IAP) revenue.
To expand on the latter, our research arm ARtillery Intelligence has estimated Pokemon Go’s 2020 IAP revenue at $1.2 billion. This marks the game’s most successful year to date — a rare feat as mobile games don’t sustain over time. This largely due to Niantic’s ongoing ingenuity.
Buy Local
Speaking of revenue diversification, Niantic has developed a third income stream: local business promotion. So far, brands like GameStop have paid to designate their locations as in-game waypoints. These are the Pokéstops and Gyms where players descend in large numbers.
For players, this can be organic as they work up a hunger through the game’s physical play. And for multi-location brands, it can be more effective than traditional marketing when it comes to driving tangible foot traffic. It’s particularly fitting to fast food, coffee and convenience stores.
Niantic doubled down on this principle in late 2019 by extending in-game sponsorship to the long tail of SMBs. Its low-friction self-serve ad platform is an offshoot of the Wayfarer program that lets players vote on locations for Pokéstops and Gyms. This lets SMBs pay to boost foot traffic.
Following the program’s launch, Niantic CEO John Hanke characterized it as both additive to gameplay and supportive to local businesses. Niantic has a penchant for altruism in its mission to get kids out of the house. This adds fuel in simultaneously supporting local economies.
Stepping back, Pokémon Go is often considered to be AR (though there’s some debate). Digital overlays on the real world when catching Pokemon fits the definition. But on another level, driving real-world behavior through mobile gaming is a more meaningful form of digital-physical fusion.
We’ll pause there and return in the next Space Race segment with a different company profile…
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