Nintendo’s gaming sensation shows how
emotion will always one-up technology.
Unless you have been living under a rock,
you can’t but help notice the gaming
sensation sweeping the world that is
Pokémon Go. It has overtaken Twitter and
Tinder in downloads, and lead to armed
robberies and personal injuries. If the
Beatles were still around, it would
probably be bigger than them too. Now
it’s just about to hit Europe and you have
been warned. But even for non-gamers,
this success teaches (or more precisely
re-teaches) us two important lessons.
If you don’t know your Jigglypuff from
your Wigglytuff, this whole phenomena is
going to appear somewhat bizarre.
Put briefly: Pokémon Go is an ‘augmented
reality’ game in which you have to hunt
down and capture Pokémon characters.
The clever twist is that they are in ‘real
life’, created through though the camera
and location tracker on your smartphone.
You actually have to go to physical
locations in the real world to find them.
Fair play to the game maker Niantic who
used every gamification trick in the book
— social interaction, points, levels,
scarcity, rewards — alongside some
impressive technology to build a winner.
And a winner it is. Alongside the millions
of downloads, the surging share price
( adding $9 billion to the value of
Nintendo ) and the rising value of your
childhood card collection in your parents’
attic, has come a tsunami of Pokémon-
related punditry about how this is the
future of gaming, or the superiority of
augmented vs virtual reality, or any other
number of things. Maybe, maybe not.
Pokémon Go doesn’t really tell us
anything we didn’t already know, but
there are two important lessons to be re-
learned.
The first is emotion will always trump
technology.
Take Nintendo’s iconic 2006 Wii gaming
console. The console came out around
the same time as Sony’s PlayStation 3
and Microsoft’s Xbox 360. While the latter
two had (for the time) impressive,
realistic(ish) graphics and immersive
game play — all the Wii had was blocky,
cartoony graphics and plinky-plonky
music. From a technical point of view, it
wasn’t even a contest.
Yet depending on who you ask, the Wii is
reckoned to have sold probably 25% more
consoles than either of its two
competitors. The reason? The Wii was fun
and social. The PS3 was played in a
bedroom on your own; the Wii was played
in your living room with your mates, or
even your mum. Nobody cared that the
graphics weren’t that great, in fact they
were part of its charm.
The second lesson: Pokémon Go tells us
is that competition has a way of not
looking like competition until it is too late.
If you are Tinder or Twitter, both of which
are on course to be eclipsed by the game ,
the last thing you expected to knock you
off your perch was a 20-year-old,
somewhat niche, card-trading game.
History is littered with examples of
companies being attacked from an
unprotected flank. In 2007, the suits at
Nokia, then the largest phone maker in
the world, dismissed the iPhone because
it was expensive and at its launch only
worked on second-generation networks
unlike Nokia’s 3G technology. Today
Apple’s market cap is $533 billion. Nokia
was sold to Microsoft for $7.5 billion in
2014 and written off 18 months later.
It was a lesson that Dutch telco KPN
learned to its cost. In 2011 the company
was forced to issue a profit warning and
announce plans to slash 5,000 jobs.
KPN’s Dutch mobile service revenue
dropped by 8.1% in the first quarter of
that year, a large chunk of that loss due to
the collapse in revenue from its
previously highly profitable SMS service.
The reason was not because of something
that Vodafone or T-Mobile had done
(KPN’s traditional competitors). What the
outgoing CEO Ad Scheepbouwer had
failed to track was the growth of a two-
year-old start-up run by a Ukrainian ex-
pat and a Facebook rejectee. That start-
up was WhatsApp, sold to Facebook for $
22 billion (KPN’s market cap today is
about $15 billion) in 2014. Today
Facebook’s own Messenger service and
WhatsApp process 60 billion messages a
day, three times more than all of the SMS
messages sent around the world.
Some people have argued that Pokémon’s
brand has been part of the game’s huge
success , thus suggesting that other
without such brand recognition will
struggle to follow on. The evidence is
patchy. Nokia’s brand (in some parts of
the world Nokia was a synonym for
mobile phone) proved to be a tissue-
paper thin defence.
Whether Pokémon Go proves to be a flash
in the pan (likely) or a long-term winner
(doubtful) we will have to see. However
what it has re-taught enterprisers is to
look outwards, not in. Think about your
users, not your technology — and don’t
worry about your traditional competitors
you know what they are doing. Instead
worry about those two people in a start-
up that just launched a laughably bad
early version of whatever it is that you do.
You won’t be laughing for long.

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