Here is how Pokémon Go is a win for Google

Klue

Will Google play Pokémon all the way to AR dominance?

Pokémon Go is the most downloaded app in history and it’s making gobs of cash for a few companies in more than one way. Developer Niantic is profiting, obviously, as are The Pokemon Company and Nintendo, with both a stake in Niantic and part-ownership of the Pokémon Company. Apple makes 30% from every in-app purchase, as does Google. (More than $14 million was generated in the first week alone.) Google is also an investor in Niantic Labs, the latter being a spun off startup from within Google itself. Google’s doing allllllright with Pokémon Go, even without direct ownership; in fact, it’s might end up being in the best position of all, benefitting from an arm’s length as well as setting up it’s own eventual play in augmented reality.

In 2004, Google acquired Keyhole, a geospatial data visualization developer for $35 million. Within Google’s startup incubator, it became Niantic Labs and provided tech for Google Maps and Street View. As CEO John Hanke puts it, “We wanted to do something that was aspirational: Let’s get people outside.” When Google re-organized as Alphabet was spun out on its own, with a sizeable investment from Google, among others. Google’s practice of cultivating innovation via in-house startups and then setting them free is a winning strategy. Partnerships with innovative disruptors offer inside access to the freshest ideas. Google wins first-rights to the tech and the minds behind it. If the roadmap doesn’t align directly with Google’s, it can spin out the company as an independent while maintaining investor stakes and the title of discovery.

What Pokémon Go does is to gauge mass appetite for augmented reality beyond the initial fad. Will people be interested? Invested? Willing to help, openly experience and, importantly, pay? That’s why Pokemon Go was a smart start. They’ll make money and gain valuable intel which they can apply to their own AR development, Project X etcetera, which will benefit from the mass market acceptance that Pokémon Go achieved.

Pokemon Go will be acknowledged as the app that introduced augmented reality to the masses. Essentially, clearing the way for Google and it’s behemoth AR innovations to move in to a market already primed for the tech. I don’t think anyone at Google is wringing their hands over the one that got away. And, I’m not talking about an Alakazam.

Blog > Competitive Enablement