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Which Company Might Develop the Next Pokémon Go?

September 2, 2016
Augmented reality: Which companies are investing in the success of Pokemon Go?

Pokémon Go took the world by storm in July, with kids and adults chasing after pocket monsters in parks and on sidewalks across the world.

According to Sensor Tower, in the first 19 days after launching, the augmented reality game saw 50 million installs on mobile devices, making it the fastest-growing game to reach this milestone. By comparison, it took the most recent Candy Crush spin-off, Candy Crush Jelly Saga (owned by Activision Blizzard’s [ATVI] King), to hit that target after three months and significant advertising.

Nintendo’s stock (ADR: NTDOY) jumped sharply on the news, but prices retreated after the game company said it owned only part of the franchise and didn’t forecast generating significant sales from the game. Instead, Pokémon Go is the creation of Niantic, which has created other games like the science-fiction-based Ingress. In its latest earnings report, Nintendo saw an operating loss of $48 million for the quarter.

Despite Nintendo not being able to capitalize off Pokemon’s success, there may be a future in augmented reality, even if it’s hard to tell which game might be the next hot one.

Augment the Reality Around You

Augmented reality uses a smartphone’s camera, GPS, and position sensors to tell a game what to display and where in the real world. This electronic world meshes with actual reality, unlike virtual reality, where users enter a whole new synthetic environment via headsets like Oculus Rift or HTC Vive.

Augmented reality has people excited. Tim Cook, Apple’s (AAPL) chief executive officer, said during a recent earnings call that it’s looking at the technology.

“We’ve been and continue to invest a lot in this. We are high on AR for the long run and we think there are great things for customers and a great commercial opportunity,” Cook said.

Trade publication Information Age said there’s more to augmented reality than just games, too, with possible applications for the medical, military, and education sectors.

“Simply, it will energize and transform commerce and marketing. Customers, eventually, will be able to try on an item of clothing, feel a handbag (etc.) before purchasing,” they said.

What to Watch for Next

According to TechCrunch, Nintendo plans a September rollout of Pokémon Go Plus, a wearable device to complement the app and allow players to avoid always being on their phones.

Microsoft (MSFT) has an augmented reality device for users, too. HoloLens lets users see 3-D menus wherever they are, but still displays the world around them, keeping them tied to reality.

Google (GOOG) is planning improved 3-D visual tracking technology for smartphones with its Project Tango, which should be out soon.

According to Wired, a startup that’s on everyone’s screens—so to speak—is Magic Leap, which is said to be working on a head-mounted display that will project a digital light field onto the user’s eye, allowing it to superimpose 3-D images over real-world objects. However, not much is really known about Magic Leap’s technology, which adds to the intrigue.

So although Nintendo may not have financially capitalized on the overnight success of Pokémon Go, plenty of companies took notice of the game’s success, and it’s likely we’ll see a slew of augmented reality offerings soon.

Not All Stocks Are Created Equal

Want to learn more about augmented reality stocks and companies? Screener tools can help you put stocks to the test before you jump in.

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