Pokémon Go—a game based on people using their smartphones to chase virtual characters through public spaces together—probably should have died during the pandemic. Instead, Niantic Inc., the company behind the game, tweaked the experience of playing indoors and managed to pull its already committed user base in even deeper. Monthly active users increased 15% in the year through May, and consumer spending on the app soared 49% over the same period, to $1.4 billion, according to data from Sensor Tower.
The success has been a boon for Niantic, which was founded inside Alphabet Inc.’s Google in 2010 and spun off into an independent company five years later. It also presents a challenge: The company depends deeply on the game but knows it needs a new hit. On June 14 it announced a deal with Hasbro Inc. for a Transformers game, the most recent result of a series of partnerships with content companies. Simultaneously, Niantic is looking to transform itself into something more than a game studio while it’s still a leader in the nascent but heavily hyped augmented reality industry.
For years, tech and video game companies have enthused over the potential of AR, the technology of producing digital imagery that appears to interact with the physical world. Companies are developing new headsets, making funny filters for smartphone videos, and trying to adapt the technology to everything from interior decoration to city planning.
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