Pokémon Go Craze Creates Buzz for Startups, Other Local Companies

By Deirdre Newman
Orange County Busines Journal
August 16, 2016

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.”