Earlier this month Nintendo and Niantic (a Google spinoff) launched Pokémon GO – a game that has everyone talking. Whether you’ve played it or just wondered what it is, there is no doubt that Pokémon GO is the start of a technological shift towards augmented reality; a shift causing a significant change in how businesses are attracting customers.

Pokémon’s popularity had seemingly peaked in the late 1990’s and early 2000’s with high grossing video games, cards, movies, TV shows and other products in a fad that was dubbed Pokémania. After this crescendo Pokémon never really fell out of fashion entirely, but it did lose its generation-defining level of popularity for a number of years – that is until the release of Pokémon GO.

The recent revival adds a new dimension to the franchise and signals a major technological shift – an impact that is being felt far beyond the video game world.

How Does Pokémon GO work?
Pokémon GO is not like the previous Pokémon games, in fact it is not like any previous mainstream video game. That is because Pokémon GO is an augmented-reality game (meaning it requires real-world interaction), can be played on any smartphone, and is free to download.

Pokémon GO utilizes your smartphone’s GPS and clock to determine where you are in the game. It uses an animated version of Google maps (sans street names) as the setting. Local landmarks are transformed into Gyms and PokéStops, and nearby Pokémon are denoted by rustling grass.

Players move their character around the virtual world by navigating through the real world. Different types of Pokémon are found in different environments. Water-based Pokémon are found near lakes and rivers for example, and fairy-type Pokémon are (most commonly) found in the evening. The game designers also intentionally placed more Pokémon in popular locations.

While Pokémon GO may be the first major augmented reality video game, it certainly won’t be the last.

How popular is Pokémon GO?
According to Fortune magazine, by Friday July 8, Pokémon GO was installed on over 5% of all Android phones, more than double the number of Tinder app users (at a paltry 2%). This is despite the fact that Tinder was launched over 5 years ago and has since become a cultural icon in its own right. Twitter is the next digital giant that Pokémon GO looks set to overtake, with 3% of Android users playing the game on a daily basis compared to the 3.5% of Android users on Twitter daily.

In the US alone, 26 million people are playing Pokémon GO, earning Nintendo $1.6 million per day from American iPhone users (primarily from in-app purchases). Nintendo shares have more than doubled, including a one-day rise of nearly 25%.

McPokémon
In-game purchases have been the game’s source of revenue so far, but that business model could change going forward. Augmented reality video games provide more opportunities for real-world sales than their couch-anchored cousins.

In Japan, McDonald’s is poised to become the first company to pay to tap into the popularity of Pokémon GO. Approximately 3,000 McDonald’s restaurants in Japan will become gyms. Currently gyms are set up in popular and prominent areas. They are crucial to the game and players flock to them. McDonalds will no doubt turn these would be Pokémon masters into customers.

McDonald’s will be the first, but according to Niantic SEO in an interview with The Financial Times, other businesses are poised to become sponsors as well. The McDonald’s-Pokémon partnership could be a huge leap forward in the growing field of location-based advertising. The type of ‘pay per click’ advertising that is already hugely prominent online with digital giants like Google and Facebook, could evolve into ‘price per visit’.

SME and Microbusinesses have already begun benefiting from the game. Kids across the U.S. have been setting up the 21st century version of lemonade stands, selling drinks and snacks to Pokémon GO players converging at PokéStops. Savvy business owners have also made the most of the craze. Not long after the initial launch of the game Forbes released an article entitled “How ‘Pokémon GO’ Can Lure More Customers to Your Local Business” detailing the different ways that small businesses can capitalize on the craze.

Many unsuspecting business owners have discovered that they were in or near PokéStops or gyms, unwittingly putting them at the centre of one of the most popular games of all time. In response to the influx of Pokémon GO players some short-sighted business owners decided to shoo players away, but other more astute owners and managers invited them in, offering deals and advertising their newfound Pokémon GO importance on social media. Inc.com even recounts one Reddit user’s decision to buy ‘lures’ in the game in order to continually attract Pokémon to his location. The Reddit user said “We did this last night (college town), and within minutes of dropping the lure, 30 people walked in. Hoooly s#&@.”

More important than the immediate impact that Pokémon GO has made, are the future ramifications. Augmented reality video games have been in the cards for some time, but Pokémon GO has illustrated just how powerful they can be. The spread of this new technology and the way in which businesses have adapted (or failed to adapt) their marketing has also been telling, so too has been the large role that social media has played fueling the games popularity and aiding the marketing efforts of business owners.