Niantic is a publisher whose latest game, Pokémon Go, needs very little introduction after the incredible and immediate rise to the top of the App Store’s Top Grossing charts. The company behind the game though is less well known, despite the success of their first location-based title Ingress.
Niantic began as an internal startup within Google itself by John Hanke, co-founder of Keyhole. If those names ring a bell, it’s because Hanke and his team at Keyhole were the original developers of Google Earth (as Keyhole EarthViewer), before being purchased by the search giant in 2004.
While leading Google’s Geo division, Hanke led the development of both Google Earth and Google Maps, including the agreement with Apple to include Google Maps as the default (and only) map service on the original iPhone (how times have changed!).
In 2010, using much of the team he had worked with during his time as head of the Geo team, Hanke established Niantic Labs as a mobile gaming startup within Google. In a couple of years, Niantic created location-based title Ingress, the first game of its kind.
Massive Roots and Ingress
It’s no surprise Hanke’s passions led him to gaming. Before founding Keyhole, Hanke teamed up with Steve and Mike Sellers to found Archetype Interactive, which published Meridian 59 in 1995. The game was the first graphical 3D massively multiplayer online role-playing game (MMORPG). It also came with a free copy of Netscape Navigator.
The game was successful enough that Archetype was purchased by Meridian 59 publisher 3DO in 1996, the day Hanke graduated from Berkeley with his MBA. Hanke and Steve Sellers then created another entertainment startup, The Big Network, which was quickly sold in 2000.
This experience with managing huge volumes of player data simultaneously served Hanke well when it came to Ingress.
Ingress leveraged that mapping & location projects experience with Hanke’s background in MMORPG’s to create a truly unique mobile title for Android in 2013. The mechanics of the game were complex, involving real-time location data, player interactions between “portals” and “resonators”, hacking and linking portals, and … and so it may be easier to jump in than read an explanation. Regardless of complexity, Ingress soared and the game had a million players within a year of its 2013 release, and seven million by 2015.
When Google restructured into Alphabet, Niantic left the fold of Google to start off on its own. During the spin-out process, Niantic secured funding not just from Google, but from Nintendo and The Pokémon Company as well, to the tune of $30 million.
Gotta Catch ‘Em All
We’ve written a fair amount about Niantic’s work with Pokémon Go, from its perfect rolling launch and beta period to its engagement strategies and eventual shortcomings. As one of the reported reasons for the spinoff from Google into an independent entity, expectations were already high for the company before launch.
Pokémon Go surpassed expectations almost immediately, including Niantic’s own, and server strains and the kind of real-world bugs that are hard to test for cropped up as the game started going live. In an interview with Vice’s Waypoint, Hanke recalled it with a bit of relief. “I’d liken it to being on a rollercoaster,” he said, “And we weren’t completely sure that we weren’t going to fall out.”
The genie was out of the bottle, some users were angry, but the company continued to push forward and has generally held steady, introducing new features and ‘Mon to catch as time has gone by.
In an interview with Inc., Hanke explained how the relatively small team of under 100 has adjusted from the dedicated cult following of Ingress to the limelight of a such a beloved franchise. “We’ve had to develop thicker skin to deal with the unvarnished expression of whatever is on people’s minds,” he said, “Unfortunately, I think that’s out of control on the internet right now.”
Name Recognition and Organic Growth
Angry Internet denizens and immediate outreach via social media are symptoms of a good problem to have in many ways though. Niantic responded to the lack of communication by hiring swift and strategically, including Hanke asking his fireside chat audience at VentureBeat 2016 if anyone wanted to join the company as community manager.
For every frustrated angry Pokémon Go player who lapsed out due to a less than perfect rewards system, dozens of people who had barely heard of the franchise kept playing as an incentive to exercise and scratch the collecting bug. Name recognition alone carried it through a stormy 2016 and early 2017 as more servers were added to keep up with steady demand.
Despite naysayers, the app’s retention curve follows industry norms, and as of December 2017 it still had a higher DAU count than many popular non-gaming apps, and its D1 retention still blows the industry average out of the water. ARPDAU and general revenue speak for themselves.
Monetizing without Loot Boxes
That revenue comes on the hands of a robust IAP power-up system and timed lockouts and no randomization. Players purchase (and earn through gameplay at a much lower rate) coins to purchase items like Pokéballs, egg incubators, and other gameplay enhancers.
This system is a slight refinement on the resource purchases available in Ingress. The timeouts aren’t quite as harsh, but the reward build up is more finely tuned to give users a taste of what they can purchase with cold hard cash.
As a game with a significant appeal to minors, the balance can be hard to strike, and Niantic has slowly introduced more rewards for daily login and activity to keep non-spenders happy.
The system is transparent and straightforward to even the most basic user, which increases the trust IAP purchasers feel. Niantic also doesn’t have to worry about any of the changes coming to the App Store guidelines or any pending legislation. Like their namesake ship, they can keep sailing on.
Niantic maintains a well updated blog where news and features about how their titles have impacted real people can be found. Their Twitter, @NianticLabs, and Facebook are active daily, posting new challenges and meet-ups. There are even dedicated Pokémon Go Facebook pages for players in every region!
Niantic doesn’t just have Ingress and Pokémon Go. Hanke has always been candid that he wants to make apps that do more than entertain. In an interview with Business Insider, Hanke said Pokémon Go is designed to get you up and moving by promising you Pokémon as rewards, rather than placing pressure on you.
With one of the biggest AR games in the wild, Hanke himself is a bit cautious of virtual reality. “I’m afraid it could be too good, in the sense of being an experience that people want to spend a huge amount of time in,” said Hanke at the Mixed Reality Summit, part of the London Games Festival 2017, “I mean I already have concerns about my kids playing too much Minecraft, and that’s a wonderful game,” he said.
“There is research about the health impact of Pokémon Go in particular but you can expand that to apply to all AR games,” Hanke continued. “These games can encourage people to be more active than they would normally be. As a parent, part of my motivation for building this kind of game was to try and get my kids out of the house. I think there’s a ton of good that can be done.”
As part of the mission to do more, Niantic also has a tourist/sightseeing app called Field Trip, which it developed while it was still part of Google and has continued to update. The app brings users automatic suggestions for places to visit near where they’re physically standing at any given moment.
Niantic continues to serve as both an inspiration to small-time developers who have the chance to keep growing, and anyone who wants mobile apps to be more. Niantic plans on continuing to grow and support both its major games, and continuing its mission for great, unique experiences.
In his other remarks at London Games Festival, Hanke made it clear: “With AR, there’s a huge amount of potential to do things that really do have a positive impact on people,” and despite its growing pains, Niantic is still in the lead when it comes to that blend of entertainment and positive impact.
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