Pokemon Go

Pokémon Go is the first major augmented reality (AR) game to hit mobile devices, topping the charts of the Apple App Store in its first week and sending part-owner Nintendo’s share price soaring nearly 70% since its release. The game is the most downloaded application in the United States, Australia and New Zealand and is rolling out progressively across the globe.

The game’s release represents a major step forward in the commercialisation of AR, a burgeoning field of innovation where computer-generated sensory input is integrated with real world environments.

For boards, understanding the impact of disruptive technology such as AR in terms of risk, ethics and strategy can be challenging, especially when a trend can flare and fade in a matter of days. 

Pokémon Go has a simple premise. Players are presented with a map of their environment (driven by Google engineering) and must move through the real world to capture Pokémon, fantastical creatures drawn in a Japanese comic book style.

Augmented applications similar to Pokémon Go are seeing huge investment from Silicon Valley.

The application uses GPS to display a player’s avatar on a map and projects images of Pokémon in the real environment when observed through the lens of a smartphone camera. The game has reached global viral status with millions of players taking to the streets in search of the elusive creatures.

The potential integration of this and similar AR platforms with other commercial activity is enormous. AR applications similar to Pokémon Go are seeing huge investment from Silicon Valley venture capitalists and are gaining the attention of home-grown innovators as well.

Data integration

Pokémon Go users log in to the application using their Google accounts, which gives them access to the maps that power the game. As players use the application, it is possible to collect data about the movement of users through the built environment.

Combining Google data (such as your internet search history and ecommerce purchasing records) with real-time data about where you are and how you travel presents a real and immediate opportunity for commercial integration.

For example, digital advertisements could be programmed to identify when a user is in proximity and dynamically display content relevant to their interests.

Questions for boards: When making decisions using new data sources such as this, how do boards satisfy themselves as to the validity and reliability of the data? How do boards identify and address the implicit biases of data sourced through AR gaming?

Influencing user behaviours

More intriguing still is the potential for AR gaming to influence consumer behaviours to achieve commercial goals.

Around Australia, thousands of people are walking around today varying their regular routes to optimise their gaming experience.

There is scope for sophisticated commercialisation of this element of augmented reality. The Sydney Opera House has already seized the opportunity, incentivising players to visit the icon by sponsoring neighbouring “Pokéstops”, places where players collect items needed to capture Pokémon, for a meagre $3 per hour.

AR game developers have the power to influence the movement of their players in more strategic ways, by positioning in-game activities at locations that present commercial opportunities. A retailer, for example, could pay to have an in-game location positioned at their storefront to generate higher foot traffic for a set period.

Questions for boards: How do boards identify and capitalise on the commercial opportunities that AR presents business, especially if they don’t currently have the skills to do so? How do boards support their business to understand new influences on consumer behaviour?

The dark side of Pokémon

There is also potential for more Machiavellian application of this technology. The power to redirect people’s movements in such a dynamic way is new for business, and there are risks associated with this influence.

Players whose attention is consumed by their phones are at higher risk of traffic accidents and theft, and the structure of the game may even accidentally incentivise unlawful behaviour. This was the case in New South Wales, where the Department of Justice was prompted to issue a reminder via Facebook that the use of recording devices in court houses is prohibited after players ventured inside in search of Pokémon.

On the other hand, developers may be able to positively influence public health outcomes through rewarding players for incidental or active exercise. This too presents opportunities for the realisation of corporate social responsibility goals or, alternatively, vertical integration.

Questions for boards: What are the ethical considerations for boards in exercising such influence over human behaviour? What level of responsibility does the board have for the behaviours of players influenced by their business’s products?

Pokémon Go is the first AR game to have gained the attention of the broader public, but it will not be the last.

Whether technology is the core business of an organisation or not, boards of all kinds will need to consider how the effects of disruptive technology like AR can flow on to influence their regulatory context, operational environment and governance.