Augmented reality has always been in the shadows of its more famous parent, virtual reality. That all changed in a big way in July when Pokémon Go took the world by storm. OC startups with an AR focus have since seen a surge of interest from clients and investors.
The augmented reality version of the original Pokémon game lets players capture, battle and train virtual creatures, called Pokémon, who appear on the screen as if they were in the same real-world location as the player. Augmented reality is an aspect of virtual reality that applies computer graphics, information or animation to the real world.
Pokémon Go already has earned $200 million in global revenue in its first month, according to news reports. It was developed by San Francisco-based startup Ninantic Inc.
Local companies are positioning themselves to take advantage of the craze.
“While consumers are having fun playing a game, marketers, brands and digital strategists that have the big bucks are starting to look at the tech and see how they can apply it toward their brand,” said Andrew Couch, chief executive of Irvine-based Candy Lab Inc., a startup focused on developing software for location-based AR experiences.
“We know this because we’re getting contacted by many brands and marketers on a daily basis asking how they can use that tech for their own mobile apps.”
AR Startups
Candy Lab now is in conversations to build games for some “big” companies in the gaming and movie industries that Couch said he couldn’t disclose. The potential deals are a direct result of the popularity of Pokémon Go, he said.
The startup’s AR software is more advanced than Ninantic’s because it uses beacon technology that allows indoor use, in addition to GPS technology, which allows only outdoor use, Couch said. Candy Lab has the only other location-based AR engine in the world aside from Ninantic’s, according to his research.
“Since we’ve already built [our software engine] and refined it over the years and built a white-label application with a content management system, it’s not that hard for us to go full on,” he said. “We can just build a game experience around [the engine] and release a new app. The AR engine itself is the hard part.”
Candy Lab, since the release of Pokémon Go, signed a deal with the Missouri Botanical Garden in St. Louis. The garden will provide the app to its visitors so they can collect virtual items around the garden and learn about the various exhibitions. Users can collect and earn points and then receive coupons or giveaways at its gift shop, said Gilda Campos, Candy Lab co-founder and chief creative officer.
Rather than perpetuating couch potato living, as video gaming is often accused of doing, Pokémon Go enables players to get to know the environment outside their front doors.
“What Pokémon Go is really teaching everyone is that younger kids will get up and walk around their cities,” Couch said. “They will go to the middle of soccer fields in the middle of the night. Imagine putting that power inside a business or city to make visitation a little more engaging.”
Another local startup also has seen increased exposure to potential investors and clients as a result of Pokémon Go. Well Told Entertainment, based at Chapman University incubator the Leatherby Center in Orange, is an AR and VR production company with a focus on game design and narrative content.
The company launched last October, and Pokémon Go’s success has helped it explain the concept of AR to potential investors and clients, said co-founder and Chief Executive Matthew Rebong.
“I think Pokémon Go was a really good starting point to introduce AR to the public,” he said. “It’s really exciting, at least for us as a startup, that AR could pick up so much traction as quickly as it did, because it helps validate the concept and helps us explain to the general public what we’re actually trying to achieve. It opened up a lot of doors for us.”
Ripple Effects
More established companies that use AR also are seeing the effect of Pokémon Go’s popularity, though it hasn’t yet translated into measurable business.
Irvine-based EON Reality, a 17-year-old AR and VR company specializing in education, training and simulation for industry, education and “edutainment,” has gotten more exploratory calls from educational institutions since the release of the game, said Mark Cheben, global marketing director.
“They saw this happen over the summer, and their students are experiencing it, and they want to know how can they leverage the kind of excitement and fervor around Pokémon Go and apply that to the tools they’re using in the classroom, either on an institutional scale or on a very specific lesson scale.”
Companies like Ubiquity Inc., which is in the midst of pivoting away from traditional media and into AR and VR, are banking on the continued popularity of AR.
“The world has essentially been thrown open for new AR apps for just about anything, and this intense interest is driving a tremendous AR app development boom,” said Ubiquity founder and Chief Creative Architect Chris Carmichael via email.
He said he sees AR applications proliferating in the future.
“In just one month, the behavior of pointing a smartphone at something and seeing new data and objects superimposed now seems like an obvious thing to do,” he said. “Consumer acceptance and interest in AR will drive greater adoption of existing AR platforms and apps, as well as innovation in AR software, hardware and services. It is as if the world woke up to a new reality, not just full of ‘Pocket Monsters,’” he said, referring to the original Japanese title of the game, “but of access to digital information in real time on a scale never before possible.”
Early Days
The term augmented reality was coined in 1990 at Boeing, well before smartphones existed.
It started as a software to replace maps and schematics for factory workers. The technology required high-tech headgear for other industrial uses, such as guiding equipment repairs by giving workers information in their line of sight, while allowing them to see what they were doing. EON Reality uses a similar AR application today for training and simulation.
AR and VR technology have existed for decades, although AR never reached the mainstream consciousness like VR did in the 1990s, said Jacki Morie, an AR expert who recently spoke at The Cove, the physical space of the University of California-Irvine’s innovation institute, Applied Innovation. Morie is founder and chief scientist at Los Angeles-based All These Worlds LLC, which creates virtual worlds for various applications, including academic, military, medical and space travel.
VR gained notoriety at that time through a “media frenzy,” she said, via several movies, including “Lawnmower Man” and “Johnny Mnemonic,” and through theme parks and entertainment venues, such as arcades.
It couldn’t live up to the hype, though, she said, explaining that the VR movies typically were dark and that the theme parks and venues didn’t draw the hoped-for crowds.
Whether AR can live up to its hype remains to be seen.
Perfect Storm
There are two ways to experience AR. One is by overlaying graphics onto the real world as seen through a user’s mobile device. Another is experiencing it through a device worn on one’s head, such as the Microsoft Hololens or the Meta headset. Those devices sell for $2,000 or more and therefore aren’t likely to enter the mass market any time soon, Morie said.
Pokémon Go has been “a perfect storm of circumstances” that contributed to the success of AR for several reasons, Morie said, including Nintendo’s “need to have a winning mobile offering due to the falling sales of their console and handheld markets” and the original Pokémon’s adoring fans.
Nintendo, a Japanese gaming company, developed the original Pokémon game on its Game Boy portable device and is one of the owners of Niantic, a spinoff of Google.
