Pokémon Go Lures Prices Upward in Tech Markets

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Pokémon Go is the newest installment of the Pokémon franchise and is taking the mobile gaming market by storm. While not the first location-based mobile game, it is certainly one of the most popular, obtaining a whopping 21 million users within its first week of being released. Outside of Nintendo’s share price rising, inquiring minds want to know how the success of the game is expected to affect other markets. IBISWorld has looked at mobile app development, location-based services, computer servers, lithium-ion batteries and mobile device management to gauge the game’s effect on demand and prices in these markets. While many of these markets are in maturation and prices have either grown slowly or retracted altogether, the overall success of Pokémon Go is expected to increase demand and place upward pressure on these markets’ prices.

Mobile App Development & Location Based Services

Benchmark Price_Mobile App Dev ServicesNiantic Inc., a software development company, is responsible for the wildly popular game that has everyone from school-age children to baby boomers on a mad quest to “catch them all.” The success behind Pokémon Go can be chalked up to a number of things, but the most predominant is its use of augmented reality, which is when the real-world view is augmented by computer sensory, such as graphics, sound or video. In the case of Pokémon Go, users catch Pokémon in the “wild” as the animated characters of the game pop up in real-world locations visible on their phone screens. While Pokémon Go is not the first mobile gaming app to use augmented reality, it most certainly will not be the last. The momentous need for mobile app developers to stay on the cutting edge of technology almost certainly means that the envelope will be pushed even further. In fact, there are market whisperings of delving into virtual reality. Thus, buyers that require mobile app development services will drive demand for developers that are well versed in augmented reality. Moreover, developers that wish to stay one-step ahead of the game are already looking at incorporating virtual reality into their app development services to differentiate themselves from their competitors. Overall, demand for mobile apps that use augmented reality will increase and savvy suppliers that specialize in the feature may begin to increase their prices.

The location-based aspect of Pokémon Go is another drawcard of its success because it requires users to explore the world to obtain the full gaming experience. In the game, users are directed to businesses, landmarks and other tourist attractions in the form of Poké Stops (where players can collect necessary items, such as Poké balls) and Gyms (where players go to “battle” their Pokémon). As with the augmented reality feature, developers will increasingly use location-based technology in future app development. The future for location-based games may include some sort of interaction with the specific area or landmark as well, which would fully immerse the player in the universe of the game. For example, when a player happens upon a specific landmark, in the future they may be required to take a video of themselves at the landmark performing a specific task for credit in the game. The popularity of the location-based aspect of Pokémon Go will support an increase in demand for location-based services for future mobile apps, thereby supporting an upward trend in pricing.

Computer Servers & Lithium-Ion Batteries

For all of its success, Pokémon Go is not without its troubles. The game has been criticized for its near constant server crashes. Computer servers are designed to respond to and handle requests from computers across a network or over the internet. Servers are also designed to handle multiple tasks for multiple users. For example, the SwitchSuperNAP, based in Nevada, gives an estimated 50 million users access to data within 14 milliseconds. Niantic Inc. had no idea how popular Pokémon Go would be and thus grossly underestimated the level of traffic their servers would be receiving. Learning from Pokémon Go, businesses in need of mobile app development should ensure that their developers have good working relationships with upstream computer server providers. A better understanding of server requirements can reduce app downtime.

Another problem plaguing Pokémon Go players is battery life. Many players have fallen victim to a dead, or at least severely low battery. With the impending release of Apple’s iPhone 7, IBISWorld expects that smartphone suppliers will work in tandem with lithium-ion battery suppliers to produce longer-lasting phone batteries. Currently, players are purchasing battery cases to help alleviate the problem. In fact, Zagg, a smartphone accessories manufacturer, experienced a 25% increase in its stock due to its Juice Pack Air battery for the iPhone 6. However, the popularity of Pokémon Go is likely to spawn more mobile games of its kind, indicating that consumers will be begging for longer battery lives. Suppliers will be forced to meet this need, which will lead to higher research and development costs for suppliers, ultimately increasing production costs and creating higher prices for buyers.

Mobile Device Management

Pokémon Go has also been criticized because many players have become obsessed with the game. There are a number of news stories about Pokémon Go players trespassing or loitering. Moreover, employers have found an increasing number of their employees walking around the workplace, feverishly swiping their phones. While some employers have resorted to posting signs around office common areas suggesting that employees refrain from playing the game during working hours, the ubiquitous spread of the game will likely force other employers to take matters into their own hands. Some employers provide employees with smartphones as part of their job. In an effort to ensure that employees are remaining productive and using their company phone appropriately, IBISWorld expects that employers will increasingly look to mobile device management software. The software allows employers to oversee the activity of individual mobile devices in their mobile networks and apply varying levels of security to mobile applications, such as restricting access to Pokémon Go. Should the game continue to impede employee productivity, IBISWorld expects that demand for mobile device management software will increase, which will place upward pressure on software prices.

Although Pokémon Go has gotten off to a roaring start, the mobile gaming market tends to be faddish. Whether Pokémon Go can stand the test of time or if the game will become another flavor of the month remains to be seen. The question of its longevity aside, what is certain is that the game has definitely created a new niche in the mobile gaming market. One that is set to increase demand and, in some cases, prices in a number of markets.

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