The Game Changer
The technology driving gaming phenomenon Pokémon GO has the power to revolutionise the commercial property industry, allowing potential buyers to walk through buildings that are yet to be completed or undertake due diligence on their smartphone.
Is there a Pikachu lurking in your foyer? Has your office been overrun by Ratattas and Zubats?
Pokémon GO is the most addictive thing in video games right now and is the reason there are large random groups of people clustered together in parks or train stations, their faces buried in their smartphones as they flip Pokéballs at New Zealand’s growing population of Squirtles. Making use of the GPS and camera on their phones, players follow an interactive street map as they try to catch as many Pokémon as they can.
The augmented reality game, which is based on the original Nintendo Pokémon video game and popular Pokémon cartoon series, was first released in July and within weeks was downloaded by more than 40 million people. It has been praised for encouraging exercise and criticised for causing accidents. It has also helped boost the economy as retailers capitalise on the sudden influx of people passing their premises looking for all 151 of the game's digital creatures. The locations of Pokéstops – where players can replenish their supplies – and Pokémon gyms – where players can battle it out with others – were pre-determined by the game's developers, Niantic. For businesses with cash to spare, the game allows users to buy “lure” and “incense” incentives that attract Pokémon to a particular location for 30-minute periods.
Within weeks of the game’s launch, Niantic had received more than 15 million requests from businesses to become a Pokéstop or gym, although it has since closed the door on applications. With location-based advertising set to be the game’s biggest revenue stream, Niantic struck a lucrative deal with McDonald’s in Japan – giving the chain’s 3,000 restaurants there premium gaming status.
Analysts believe that the advances in geolocation – the engine powering Pokémon GO’s success – have given advertisers the power to reach out to consumers and serve them ads where and when it’s most relevant to them.
Niantic’s CEO, John Hanke, revealed that a lot of work had gone into the game’s mapping. “A lot of us worked on Google Maps and Google Earth for many, many years, so we want the mapping to be good,” he said.
Data is the name of the game. Niantic, like Facebook and Google, tracks users’ movements and habits. They know where you are going, what time you are going and how long you’ll stay once you get there - and it stores all of that information, which is incredibly valuable to advertisers.
Rick Mulia, managing director at online advertising technology firm Rubicon Project, says: “This technology is helping to build up a huge real-world database of literally hundreds of millions of locations, each tagged with keywords such as ‘fast food lovers’ or ‘car showrooms’ that marketers can use to target specific groups of consumers with mobile ads.”
Market analysts have advised retailers to embrace Pokémon GO and use it to increase customer engagement and loyalty. “Using Pokémon GO to drive higher foot traffic to any form of real estate seems like a no-brainer,” wrote one.
Apple, which stands to make US$3 billion from the Pokémon Go craze in the next two years, is heavily investing in augmented reality.
Todd Selwyn, head of mobile product at Samsung NZ, says: “Supermarket retailers have already started to use a combination of augmented reality (AR) and virtual reality (VR). They are using the virtual reality experience to map out a store and overlaying that with an augmented reality experience, so shoppers can grab items they want to buy as they move around the virtual supermarket.”
For the property and building industry, AR and VR are the next big steps. In Australia, real estate business REA recently invested in AR company Plattar to create, manage and distribute AR content.
In New Zealand, companies like 360 video and Property 3D are already taking advantage of the interest in the technology in the property development sector, and ATEED (Auckland Tourism, Events and Economic Development) has set up a AR/VR space to help clients in almost any sector create additional value through new products, services and business models.
According to a new report by global commercial and industrial marketing network Cushman and Wakefield, AR and VR will “bridge the information asymmetries currently inherent in commercial property markets, whether due to distance, time or the agency dilemma, and improving access for consumers. From the proliferation of Internet platforms on listings to virtual viewings that thrive on cutting edge virtual reality technology, these facilitate to a broader audience reach.”
This can readily be appreciated in geospatial analytics, indoor mapping, as well as virtual viewing. These allow consumers to visualise spaces and buildings yet to be completed, or in another location; allowing commercial real estate operators to readily create specific strategies to market their spaces. This in turn makes it easier for buyers to compare properties, and to undertake due diligence even on their smartphones or desktop.
Cushman and Wakefield – of which Bayleys is the sole New Zealand affiliate – cautions that “due to the higher transaction values in commercial real estate, incumbents have every incentive to hoard data rather than share it. This story is still in progress, but it is apparent that the trend is toward increased transparency.”
It adds: “Enhanced tracking and monitoring of a building, and at the portfolio level, using portfolio analytics, can result in more granular valuations. Such data can readily be called on by market players, such as investors, to determine the health and consequently, price of an asset.”Why are all these important? Real estate remains high value, and mistakes will be costly. With technology aiding better risk management, liquidity in the marketplace will increase. Real estate syndication, which allows investors to pool capital in order to purchase a fractionalised interest in a property, has been around for decades, but another emerging digital revolution, real estate crowdfunding, will take that process online, thereby increasing access for investors.
“While it will and should attract regulatory oversight, crowdfunding could set in motion a new method of raising funds and financing projects,” Cushman and Wakefield reports. It concludes: “However, we do not see these technologies as necessarily displacing the role of a salesperson but rather they will engender an evolution that will help facilitate the real estate decision- making process. First, the skill sets of the new age agent will have to expand in order to differentiate themselves to clients. We see the rise of a more consultative and tech-savvy agent."