Picking up where we left off last week in examining AR business models, another high-performing category is location-based gaming. But rather than attribute the category in general, credit is owed mostly to its market-share leader, Pokémon Go. That’s right….it’s still going strong.
Though generalist tech press have moved on to other shiny objects, Pokémon Go continues to show traction and break new revenue records. App analytics firm Sensor Tower estimates that the game passed $5 billion in lifetime revenue as of July (the last available figures).
This is a noteworthy accomplishment, given that mobile games rarely sustain at such elevated levels. As we’ve examined, Niantic has avoided this fate by applying several tactics. These include timely in-game updates, well-devised game mechanics, and strong design principles.
Those principles include applying still-unproven AR sparingly as a feature, rather than a primary component. This “AR as a feature” tactic has been successful in delivering AR in early days, as it lets the young technology piggyback on more established channels like gaming and social.
But more importantly, Niantic isn’t just driving in-app-purchase revenue but is diversifying its business model to also serve as an AR creation engine. This takes form in its Lightship platform, which looks to be a key enabler for developers that want to build a “real world metaverse.”
AR as a Service
One of AR’s most opportune sub-segments is what we call “AR as a service.” These platforms and enabling technologies work towards democratizing advanced AR capability for developers. One byproduct of such endeavors is to push AR collectively forward.
Niantic is the latest company to go down this road with Lightship, as noted. Though known best for Pokémon Go, its true fate may be as an AR platform. Specifically, Lightship turns Pokémon Go’s codebase into a platform on which others can build geospatial AR experiences.
It does this by packaging up Pokémon Go’s architecture and load-tested capabilities into a geospatial AR experience creation engine for developers to run with. This specifically takes form in an open SDK. More accurately, it’s classified as an augmented reality developer kit, or ARDK.
In that form, Lightship will enable app developers to build experiences on top of the infrastructure that Niantic spent years building the hard way. This includes things like scaling up to surges in user behavior, mapping proficiency, location intelligence, UX design, and game mechanics.
“Our semantic segmentation tools understand the elements of the environment,” said Niantic CEO John Hanke during November’s Lightship launch event. “That means developers can focus on building the AR creation and not worry about writing code to understand where it is.”
Altogether, Lightship advances Niantic’s vision for “planet-scale AR.” The idea is to have meaningful interactions with the real world on a global scale. And this will apply beyond geospatial gaming – including potential use cases for social interaction, utilities, and local discovery.
Back to the concept of “AR as a service,” Lightship’s value will lie in its position as an AR enabler and accelerant. Notably, it achieves this in a way that’s analogous to one of the biggest enablement tools the tech world has ever seen: Amazon Web Services (AWS).
In other words, just like AWS, Niantic built its engine primarily to power its own product. But then realized it can be a platform. As such, Lightship empowers legions of startups to add their own levels of creativity to its market-validated geospatial AR foundation.
And that tracks to good business and altruism – both of which are endemic to Niantic’s mission. Now that it’s mastered geo-local AR, it’s logical to productize the whole thing as a platform. That way, developers can run with it and build apps that take AR to the next level.
We’ll pause there and circle back next week with another report excerpt from our research arm, ARtillery Intelligence…