Instead of taking big screens across the country by storm, this summer’s blockbuster has people glued to much smaller ones.
Launched at the beginning of July by San Francisco-based software development company Niantic, Inc., Pokémon Go has quickly become one of the most popular smartphone apps of all time. Data analytics firm Similar Web reported that in its first week alone, the app had been installed on nearly 11 percent of all android phones in the United States and surpassed Twitter’s daily usage shortly thereafter.
Beyond being a viral sensation, the app’s success has striking implications for a number of industries, according to Willy Shih, the Robert and Jane Cizik Professor of Management Practice in Business Administration at Harvard Business School, who spent 28 years at IBM, Digital Equipment, Silicon Graphics, Eastman Kodak, and Thomson SA before coming to HBS in 2007. A member of the School’s Technology and Operations Management unit, Shih closely studies disruptive technology and technological strategy and took time to analyze the Pokémon Go phenomenon below.
What does Pokémon Go’s success mean for augmented reality going forward? Is AR the next big thing?
Willy Shih: Microsoft Windows users in the late 80s and early 90s might remember that Microsoft came up with a solitaire game as a way of introducing people to how to use a mouse. I think Pokémon Go is going to have the same effect, albeit unintended, of educating people about augmented reality. It’s a very clever introduction to the technology and beautifully illustrates the merging of the cyber and the physical. We’ve seen other things work similarly before—Google Glass, and heads-up displays in aircraft and high-end cars—but those only caught on in limited ways. Whereas they superimposed information on top of what you were already seeing, Pokémon Go superimposes geospacial information in an integrated way, allowing the game creators to put these monsters in exact locations and in physical spots of significance. That’s really quite different.
If you were in charge, how would you monetize Pokémon Go?
WS: With so many people looking for spots to collect these things, the platform’s ability to pull traffic to particular locations is innovative and completely unique, and represents a huge financial opportunity. It was just announced, for example, that McDonald’s is going to sponsor the game’s rollout in Japan. I imagine it could fundamentally change the face of things like sponsorship and mobile advertising. We haven’t begun to see the most outrageous applications of this yet.
“WE HAVEN't BEGUN TO SEE THE MOST OUTRAGEOUS APPLICATIONS OF THIS YET.”
What about the data collection aspect?
WS: One of the things they cleverly do is ask users to sign in using their Google account (or by establishing a new account). When you use something like Google Maps, Google keeps records and can mine that data to see where you’ve been and what you’ve been doing, and then sell you things based on that. Niantic will be able to take that a step further, not only tracking where you’ve been but seeing how you respond to various stimuli in going after these particular targets. They’ll have an immense pool of data that they can mine and that’s very powerful. For people like me, it's also quite scary. I installed the game because I wanted to play with it and see what it was like, but I’ll probably uninstall it because I don’t necessarily want people to know that much about me. That said, it’s a really clever, creative way of compiling all that data.
What’s the best thing about this from a technology perspective?
WS: A lot of people talk about data fusion, how to tie together different pieces of data. What’s really impressive is how cleverly the developers were able to tie augmented reality together with geospacial location. It’s well-executed and a superb demonstration of what’s possible with modern smartphones loaded with technology like GPS, compasses, accelerometers, and orientation sensors. I would call it a tour-de-force in terms of using all the capabilities embedded in modern smartphones and showing what’s possible with augmented reality.
What’s the worst?
WS: It has a lot of potential for misuse and could cause safety problems. It’s going to mine a load of data. The question is: do people really want to share that much information? The bargain on the modern internet is that "you’ll give me services in exchange for my data.” But I don’t think, in general, people are aware of how much these internet companies know about them. The privacy issues are the part of this that warrants the most discussion.
“THE BARGAIN ON THE MODERN INTERNET IS: 'YOU'LL GIVE ME SERVICES IN EXCHANGE FOR MY DATA.'”
As the first to help this technology take off, does Niantic have any responsibility as to how they handle the data and how they go about monetizing it? Or is it free reign and whatever they don’t capitalize on, someone else quickly will?
WS: I’d be more in the latter camp. I remember working for IBM in August of 1981 when they introduced the IBM PC. IBM came up with this principle that when customers broke the shrink wrap on a package, they’d effectively accepted the licensing agreement. That whole concept of end-user licensing was revolutionary because it laid the groundwork for all the online licensing that came afterward—the greatest revolution was that no one was going to read the terms. That’s had tremendous implications, some of which we see here. In exchange for these cool games and services, users have to give up their data and I’m not sure consumers always appreciate the extent to which their data is collected and is already available for sale out on the internet.