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Can Pokémon GO single-handedly revitalize the global gaming market?

In a new report on the global gaming industry, a stagnating market is expected to be revitalized by location-based and augmented reality games.
By
July 29, 2016
Pokemon Go Pokemon on screen radar

Imagine a huge market – say, the smartphone market – reaching saturation point, slowly plateauing and then stagnating. Then imagine some revolutionary new phone comes along that miraculously kick-starts the market, sending it skyrocketing once again. While that might be a difficult future to imagine, we may have just witnessed something similar in the games industry thanks to Pokémon GO.

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In a new report from market analysts Frost & Sullivan, Pokémon GO is essentially credited with near single-handedly revitalizing a stagnating global gaming market. In effect, all hopes for the future of the mobile market are pinned on not just the game itself, but what it represents: a massively successful proof-of-concept for location-based and AR games.

The report is pretty depressing reading for anyone interested in gaming, painting a bleak picture of a market flooded with poorly performing games amidst declining smartphone shipments. The report outlines problems with limited payment models, a stalled emerging market and major players like Supercell essentially dominating all others. But then along comes Pokémon GO and everything is blown wide open and the sky seems to be the new limit.

pokemon go 2

The reasons for this are manifold: the clear interest in location-based gaming, the immediate popularity and acceptance of augmented reality for gaming and the exciting new potential for profit. As Frost & Sullivan’s Marc Einstein notes:

The partnership with the game and McDonald’s in Japan also opens the door for new revenue streams for gaming companies. There are also many new interesting areas such as connected toys which will further bridge the gap between digital and physical products so we expect continued growth in the gaming market.

With this in mind, among other factors, the research firm is predicting significant growth in the global gaming market by 2020. From revenue of $52.3 billion in 2015, Frost & Sullivan forecast a more than 25% increase to $66.2 billion in 2020. The company states there will be “greater demand across all regions and key markets for Toy-to-Life and smartphone supported games.”

There will be greater demand across all regions and key markets for Toy-to-Life and smartphone supported games.

It doesn’t take a genius to realize that we’re going to be seeing a lot of new games that attempt to emulate Pokémon Go’s success by using a similar recipe (albeit without the historical legacy and nostalgic fanbase of Pokémon). Whether or not many more titles will manage to be quite as popular remains to be seen, but the future of AR and location-based gaming looks bright.

But before that can happen, Pokémon GO’s profligate approach to battery life, continued instability and plentiful bugs need to be worked out. The future of the mobile gaming landscape apparently depends on it.

Do you think AR is the future of mobile gaming? How do you see gaming evolving?