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Technology Behind Hugely Popular Pokémon Go Game Could Be Transformative for Buildings and CRE

Forget About Squirtle, Pokémon Go Opens up New Operational, Marketing Efficiencies for Real Estate
July 27, 2016
With more than 75 million downloads since being introduced a month ago, Pokémon Go is a hot topic trending on traditional and social media news outlets. It seems like everybody is using the new augmented reality app.

The rapid adoption of the new Pokémon Go game and related virtual reality headsets popping up among early adopters means the technology behind the craze is likely to go mainstream as well. And that could have important implications for the real estate business as a whole.

“Pokémon Go, a game that has millions of people roaming around the physical world to capture virtual characters, has taken augmented reality (AR) from a niche technology to mainstream, while highlighting a potentially lucrative new marketing platform,” Kartik Hosanagar, a professor of operations, information and decisions at The Wharton School of the University of Pennsylvania. “It’s one of the first games to merge the digital and physical world.”

By offering users immersive experiences from any location, the technology appears to hold enormous potential for the real estate industry on two fronts: the most obvious being enabling prospective tenants or investors to visualize or even walk through a planned or under-construction building before it is built.

The technology could also play a major role in bringing operational efficiencies to facility management, say industry experts.

Already, owners of multifamily property and housing real estate agents are tying the game into their property listings, touting the proximity of their properties to ‘PokéStops’ where players collect ‘things.’ Some agents have even started using Pokémon characters in their ads, noted Kent Redding, principal of Kent Redding Group, a Realtor of luxury properties in Austin.

“Love it or hate it, Pokémon Go is a great way for real estate agents to connect with buyers,” said Redding.

The AR technology behind Pokémon Go is already causing real estate brokerage firms such as HFF and CBRE to project its potential applicability to real estate.

"The whole point of augmented reality is to put the consumer in a virtual reality than the one they are in physically,” notes Andrew L. Benioff, founder and managing partner of Llenrock Group, a real estate advisory and investment-banking firm.

Benioff sees numerous uses for the technology at his firm, including using it to:

  • Help evaluate the feasibility of a new project by using GPS location and AR apps to pull certain digital assets into the real world; and
  • Help investors/lenders better visualize the completed structure or built-out space.

    Such applications may not be that far away.

    Venture capitalists have poured $1.1 billion into AR firms so far this year, according Woodside Capital Partners, a global independent investment bank in the technology sector. Together, virtual and augmented reality are estimated to become an $80 billion market by 2025.

    Retailers have already begun putting the technology to use. For example, beauty suppliers such as Ulta and Sephora now offer virtual live makeup tutorials for their customers. The experience is interactive and uses multiple senses (touch, smell, feel, and sight) -- something online-only retailers can’t offer, Benioff added.

    "Clearly it is too soon to tell how much Poké-metrics will impact actual retailer and restaurant foot traffic and spending, but in the age of experiential retail, this could go down as the first huge success of gamification applications as a retail tool,” said Garrick-Brown, vice president of retail research for the Americas for Cushman & Wakefield.

    “What the success of Pokémon Go tells us is that the idea of a workable, interactive game on smartphone devices to lure people to stores, restaurants and bars is not just a feasible one, but one with a lot of potential upside,” Brown said.

    The app could also be used to virtually display furniture or other products via hologram in the shopper's home or apartment before deciding to buy it, Llenrock’s Benioff noted.

    Augment reality technology also offers potential applications well beyond the retail industry.

    “Though it may be just a game, it’s a brief insight into the technology our world will wield 10 or even five years from now,” wrote Jack Karsten and Darrell West, analysts with The Brookings Institution. “Augmented reality of the future means instead of seeing a Charizard in front of your apartment building, a fireman can see the structural vulnerabilities, temperatures, and exit routes."

    The possibilities for this technology in real estate appear virtually endless.



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