A Blog by Jonathan Low


Jul 12, 2016

So the First Mega-Hit of the Artificially Intelligent, Virtual Reality Era Is... Pokemon?

A kid's game from the 1990s - the 20th century! A time you study in history class! - has become the runaway hit of the year, if not the mobile era, by combining new technology with a familiar story line. 

And therein lies an instructive tale about technology adaption, profitability and, quite possibly, the future of content. JL

Takashi Mochizuki and Sarah Needleman report in the Wall Street Journal:

“Pokémon Go,” which was released less than a week ago, already ranks among the most-downloaded and top-grossing smartphone apps. (It) boosted the market value of Nintendo by $9 billion in a few days.  It uses augmented reality, which blends digital images with a person’s view of the real world. But its sudden success is raising questions about the privacy and security technologies fueling the game, as well as the physical risks of playing it.
A new smartphone game that has fans chasing virtual monsters through real-life city streets has boosted the market value of Nintendo Co. NTDOY 1.08 % by $9 billion in just a few days, as investors cheered the Japanese videogame maker’s first mobile-gaming hit.“Pokémon Go,” which was released less than a week ago, already ranks among the most-downloaded and top-grossing smartphone apps. But its sudden success is raising questions about the privacy and security technologies fueling the game, as well as the physical risks of playing it.
The smartphone app lets players scour parks, subway stops and other locations for cute monsters. It uses a technology called augmented reality, which blends digital images with a person’s view of the real world through the phone’s camera. The technology is the main feature behind a coming headset from Microsoft Corp. called HoloLens. The game has been available for devices running Apple Inc.’s iOS and Google’s Android in the U.S., Australia and New Zealand since Wednesday. In the U.S., it has racked up more than two million downloads on iOS devices and is generating roughly $1.6 million in revenue daily from in-app purchases, according to market researcher Sensor Tower Inc.
Nintendo shares surged 25% in Tokyo on Monday—a welcome relief for the company after the unsteady launch of its first mobile app, Miitomo, in March. Much attention has swirled around games potentially involving Nintendo’s signature characters such as Mario. Instead, the company’s first hit stems from its partnership with the companies that developed “Pokémon Go”: Pokémon Co., which is 32%-owned by Nintendo, and Niantic Inc., a spinout from Google parent Alphabet Inc. GOOGL 0.89 %
 “Pokémon Go” benefited from media coverage after an announcement last fall the game was under development. A video trailer and press release came out the day before the game launched last week. “We hoped people would be organically excited about it because it’s a new kind of experience and that turned out to be the case, even more than we expected,” Niantic Chief Executive John Hanke said.
Sudden crazes are nothing new for Nintendo: It had a breakout success with its amiibo figurines after they launched November 2014. “Pokémon Go,” however, could provide the company with a new, lucrative way into users’ wallets: recurring revenue from in-app purchases. The game, while free to download, sells add-ons such as “pokeballs” costing $1 and more that help catch the animated creatures.
Aside from the risk that “Pokémon Go” will turn out to be a fad, the game’s caretakers face challenges emerging in the real and digital worlds.
Hannah Sugarman found a Pokémon hovering above the edge of a subway platform in New York City. She decided against trying to nab the creature, especially since it was an average Zubat, not a rare Pokémon. “It’s not one worth risking your life over,” the 22-year-old graduate student said.
A flurry of similar tweets led New York’s Metropolitan Transportation Authority to issue the following warning on Twitter TWTR 2.77 % : “Hey #PokemonGO players, we know you gotta catch ‘em all, but stay behind that yellow line when in the subway.”
Police in the U.S. and Australia have urged players should be aware of their surroundings.
One of the first visuals players see after downloading the game is a warning to be careful. That didn’t help Dakota Schwartz, a 27-year-old tech-support specialist who has caught nearly 150 digital creatures since downloading the game. He sprained his ankle at a San Francisco public park trying to capture a particular Pokémon—a brown dinosaurlike beast wearing a skull for a helmet.
“I knew there was a Cubone over by the tennis courts,” he said. “I looked down at my phone at the wrong time.”
A Pokémon Co. spokeswoman reinforced that players “follow guidelines to play it safely and observe good manners.”
Beyond physical dangers, “Pokémon Go” may pose digital risks. Privacy advocates expressed concerns Monday some “Pokémon Go” players are giving Niantic access to a trove of personal data without realizing it.
New players can join through a Pokémon Trainer Club account or Google’s sign-in service, which typically stems from a Gmail account. In a test by The Wall Street Journal, signing up for the service using an iPhone gave the game maker permission to access all data associated with the Google account, including email, calendar and contact information.
That is more information than “Pokémon Go” really needs, said Marc Rotenberg, executive director of the Electronic Privacy Information Center, a privacy advocacy group.
“It looks like they are using this particular app to capture a lot of information about users that they otherwise would not be able to obtain,” he said. “We just think that from the user’s perspective the data that’s being collected should be associated with the service that’s being provided.”
Android users don’t appear to hand over the same far-reaching permissions, said Adam Reeve, a principal architect at RedOwl Analytics Inc.
“My assumption is that this is a mistake on the part of Niantic, but it’s also possible that it is a problem on [the part of] Google,” he said in a blog post on the game’s privacy issues.
Niantic and Pokémon Co. late Monday said “Pokémon Go” was erroneously asking for too much information from Google accounts, and that the game only uses basic data such as profile information. The companies said Google verified no other data was accessed by the game or Niantic, and that the companies were working to correct the matter.
It took less than a day from the introduction for Pokémon Go to become the most downloaded and highest-grossing app in the countries where it is available, according to market-data provider App Annie. Data firm SimilarWeb said Monday the app is about to surpass social-networking service Twitter among Android users in the U.S. as far as the number of daily active users.
Server problems because of overwhelming demand have delayed the international rollout of the game to countries including the United Kingdom and the Netherlands, Niantic said.
The companies’ next steps will be figuring out how to capitalize on the game’s success. This month, Nintendo plans to release an optional $35 portable device called Pokémon Go Plus designed to help game players capture the “pocket monsters” without needing to pull out a smartphone.


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