“What the heck is Pokémon Go?!” It’s all the rage, haven’t you heard? The trading card game which holds a special place in every 90s kids’ heart has resurfaced in a very big way. Guess what else? It may impact CRE.
For the Baby Boomers out there, let’s review what Pokémon is. Pokémon was first created as a video game for the Nintendo Game Boy system in 1996. In the game, kids would catch mythic creatures, trade them and battle other players. The late 90s and early 2000s brought on Pokémon’s expansion into trading cards, a TV show, movies, and apparel. The phenomenon took the world by storm. As Millennials grew up and got “too old” for the game, they turned to Facebook, selfies and other social sharing activities for entertainment. The brand struggled to stay strong in the U.S. Last week, after nearly a decade of silence, it made it’s way into the iPhones of nearly 15 million people as part of the brand’s 20th anniversary.
A mix of augmented reality, nostalgia and forward-thinking helped to revive the Pokémon epidemic at a historically rapid rate as Android and iOS took on Pokémon Go, a game developed by Niantic, inc. The game taps into the values of current culture by challenging players to travel IRL (in real life) through neighborhoods and cities to catch these odd, yet endearing, creatures and train them at nearby gyms.
Okay, but this is a commercial real estate blog, right? Right. So what does this mean for CRE? Through GPS, the game incorporates PokéStops and PokéGyms, which are high-traffic locations such as historic buildings, murals, bars, famous retail spots, etc. in which gamers can collect PokéBalls (used to catch creatures) and other point-bearing items while training their Pokémon at the latter location. The game gets people on their feet and out of the house.
Brick-and-Mortar to Catch ‘Em All!
This is a social and sharing economy. Transportation has Uber, the office sector has WeWork, and hospitality has Airbnb. Can Augmented Reality help to revive Brick-and-Mortar retail? On Saturday, a bar in my neighborhood proudly displayed on their window “This is a PokéStops!” to encourage people to stop in, grab a drink, boost their points, and gain levels in Pokémon Go. With advertising like this, people are more likely to visit brick-and-mortar retail spots. It’s part of the game.Who said Brick-and-mortar was dead anyways? Oh yeah, E-commerce and Amazon did.
Where’s the money at? According to Polygon, sponsorship deals to buy Lure Modules (hot spots in the game) are already being talked about as a source of profit for the game.
Niantic CEO John Hanke, formerly of Google Maps, told PC Mag that there has been over 15 million submissions to become a PokéStop or Pokégym geo-location. However, the company is being selective (as well as overwhelmed and bombarded) and has only approved 5 million locations worldwide. What does this mean for retailers, developers and owners? PC Mag points out:
“Niantic could charge a flat fee for a Pokestop or Pokegym, or even charge a low monthly rent. Businesses could buy evergreen Lure Modules that never run out, and might even begin charging trainers for entry and battles to make up the difference. The company already has a form for establishments to submit a request to remove their location as a Pokéstop or Pokégym; all they need to do is flip it. The advertising and hyper-local marketing efforts around Pokémon Go have thus far happened on-the-fly in response to a tech and cultural phenomenon the likes of which we’ve never seen before, but as soon as Niantic decides to take ownership of it, the economic game will drastically change.”
Multifamily: Location, Location, Location
We thought Augmented Reality advertising was years away. It’s not. Check out this current San Francisco Craigslist ad for a multi-family property which uses it’s proximity to PokéStops as a valid selling point:
Or what about this young apartment hunter:
Renters are more likely to visit properties if there is an additional incentive and what’s better than a boost in the game? Regardless of whether or not a renter will base their decision on the property’s location in relation to the AR game, owners, developers and landlords can benefit by marketing their properties in such a fun and unique way. As The Real Deal puts it, Pokémon Go can “help create more brand awareness around the building & help to foster more showings and in turn deals.”
Niantic, the company responsible for Pokémon Go, was originally a start-up under Google but spun off last year, according to Nasdaq. Since Nintendo’s stock already soared this past week, there’s I‘d say hold off on jumping on the bandwagon. Since the game (and the implications of its impact on CRE) are so new, investors need to look for loopholes to benefit through for now. Let’s face it, the AR game is a data hog since it is heavily reliant on GPS. Who benefits the most from data overcharge fees? The mobile carriers, of course. Martin Tiller of Nasdaq comments:
“Investing in the game companies is not possible in many cases and usually a bad idea, but the mobile carriers don’t care which game is trending at any one time; they will make money on data usage if the genre as a whole takes off, and that looks extremely likely.”
Just as the 90s centered around collectibles (we thought we’d get rich off of those dumb Beanie Babies), now is the era of the sharing economy with a strong emphasis on social. For a generation which is currently facing the reality of student debt, bills and working that first 9-5, an AR game which evokes memories of childhood provides a sense of much needed escapism. It’s currently uncertain how long this trend will last but if Niantic keeps players engaged, the possibilities are endless. Some industries are cashing in, why shouldn’t we?