Niantic, the developer of massive mobile hit Pokemon Go, released in recent weeks in collaboration with Japanese game maker Capcom its newest location-based and augmented reality (AR) title, Monster Hunter Now. The game lets users explore the world and achieve missions while fighting gigantic monsters, the AR technology allowing to blend the digital monsters with the real-world environment.
Since the Pokemon Go success in 2016, few other AR games have made a splash due to the technical limitations of telecom networks and mobile devices. But with 5G gradually taking over 4G and smartphones’ chips making performance leaps, many of the previous challenges are fading and it’s then no surprise that the AR theme is heating up with several major new devices (Apple Vision) and games on their way.
Initial data for Monster Hunter Now are highly encouraging, as the title claimed the top spot among free action games on app stores and amassed five million downloads in its first week, the first Niantic game to do so since Pokemon Go. A confirmation of this initial success in coming weeks and months would suggest that consumers’ appetite for AR games is still there and would bode well for upcoming AR headsets/glasses (notably from Apple) and spatial computing.
AR gaming can be extremely immersive (time spent goes up) as it brings one’s favorite characters in his/her daily environment. Just imagine playing a FIFA game in your nearby park, Call of Duty in the streets of your city or fighting Resident Evil zombies at night in your neighborhood… AR gaming can also attract new categories of people that do not necessarily play games but are interested in experiences combining physical activity and/or real-world environments with digital characters. Accordingly, engagement and monetization could be significant for the video game industry and AR could also be the opportunity to refresh some ageing franchises with totally new gaming concepts, Monster Hunter Now being the perfect illustration.
On the device side, while smartphones are currently the largest gaming platform, well ahead of consoles and PCs, smart glasses are widely expected to become a major gaming platform as well in a near future as they will offer highly immersive experiences and allow players to be hands free.
Overall, we would expect in the future most game publishers to join the fray and to bring their biggest franchises to AR on mobile devices/glasses. Various estimates put the AR market growth around 40-50% over coming years and we believe that AR will ultimately account for a large chunk of the mobile gaming market. Hence, companies getting exposure to AR early will likely enjoy a growth boost in the medium term.