A Year After Pokemon Go, Where Are the Augmented Reality Hits?

If the venture capital investment numbers are any indication, the AR hits are in the pipeline.

But context may be the killer app: the most significant feature may have been its active and social elements, features that designers might do well to build into newer AR games and uses. JL

Sarah Needleman and Cat Zakrszewski report in the Wall Street Journal:

The allure of “Pokémon Go” wasn’t primarily its augmented reality. The real innovation was its use of location-based technology to get players walking outside and socializing with others. 40 million people in the U.S. this year are expected to use augmented reality at least once a month, mostly through social or utility apps, according to eMarketer. The research firm estimates that number will rise to 54.4 million by 2019.Investors have poured $4.5 billion into 707 virtual- and augmented-reality startups since 2010.
A year after “Pokémon Go” prompted throngs of people to scour parks and streets for monsters visible only through smartphones, hit games made with augmented reality are rarer than a Snorlax.
In fact, analysts say, the monster-hunting blockbuster drove only a brief spike in games using the nascent technology, which blends digital images with a person’s view of the real world.
That is surprising, considering the ubiquity of screenshots showing Pokémon invading players’ work desks, kitchen counters and other locations of everyday life. “Pokémon Go” reached $1 billion in revenue globally just seven months after its release last July—faster than any other mobile game, including Activision Blizzard Inc.’s “Candy Crush Saga,” according to App Annie Inc.
There are thousands of augmented-reality games among the millions of apps in the Apple Inc. and Alphabet Inc. stores. None, though, has come close to the success of “Pokémon Go.” There are several reasons why, industry observers say.
One is that the allure of “Pokémon Go” wasn’t primarily its augmented reality.
While the game’s digital monsters materialize as if in the real world, they don’t interact with it. A Snorlax might appear next to a tree, but the catlike creature won’t peek from behind it. Many players who took up hunting the monsters ended up turning off the augmented-reality feature.
The real innovation of “Pokémon Go,” analysts say, was its use of location-based technology to get players walking outside and socializing with others. A recent update to the game doubled down on community building by letting players meet at specific locations to jointly defeat powerful monsters in “raids.”
“We have worked for many years to build a new kind of game based on real world exploration, physical movement and social gameplay,” Niantic Inc., the game’s creator, said in an email. “Our definition of ’Augmented Reality’ is the entire concept of building a game that takes place in and augments the real world.”
Others believe the popularity of “Pokémon Go” had to do with, well, Pokémon, whose characters are known to millions of gamers old and young. “Ingress,” a prior augmented-reality game from Niantic, attracted a decent following but wasn’t nearly as popular.
Pocket Gems Inc. wanted to tap into the buzz around augmented reality last summer. The San Francisco mobile-game maker scratched the idea, though, convinced the success of “Pokémon Go” came largely from its intellectual property. The company is still open to making games using augmented reality when the technology can better stand on its own, Chief Executive Ben Liu said.
The foundation is there. Some 40 million people in the U.S. this year are expected to use augmented reality at least once a month, mostly through social or utility apps, according to eMarketer. The research firm estimates that number will rise to 54.4 million by 2019.
Investors have poured $4.5 billion into 707 virtual- and augmented-reality startups since 2010, according to industry tracker PitchBook Data Inc. Most of the money has gone toward the development of augmented-reality glasses and other areas outside of games, it said.
Augmented-reality backers argue more hit games will emerge as app makers experiment.
Developers, for example, will be able to make digital images interact with objects in the real world, said Noah Falstein, who served as Google Inc.’s chief game designer from 2013 through April. Currently, fewer than a million smartphones world-wide can make use of that ability, he estimates.
Apple last month unveiled a new platform called ARKit aimed at bringing a richer augmented-reality experience to its roughly one billion devices world-wide. A demonstration at its developers conference showed a digital coffee cup appearing to physically rest on a table, rather than appearing superimposed on it.
Several smartphone brands that support Alphabet Inc.’s augmented-reality platform Google Tango are due out later this year. Currently, there are just two. And there are augmented-reality headsets in development from Microsoft Corp. and Magic Leap Inc.
HappyGiant LLC in Conway, Mass., plans to upgrade its augmented-reality game “HoloGrid: Monster Battle” with Apple’s ARKit and rerelease it on iOS devices in the fall. The move will allow players to manipulate fully three-dimensional characters in ways not possible before, said HappyGiant CEO Mike Levine, who years ago worked for the gaming arm of Lucasfilm LLChe.
The game was inspired by the so-called holochess in the original “Star Wars” movie, Mr. Levine said.
“The public has not seen what augmented-reality gaming can do yet,” he said. “There’s going to be a lot more coming.”