Artificial Intelligence and Business of Smart Games

The article explores the impact of Artificial Intelligence on business firms with a case study of Pokémon Go. It evaluates the business model canvas of Pokémon Go and provides recommendations for improving the services of the game in future.

Running head: ARTIFICIAL INTELLIGENCE AND BUSINESS OF SMART GAMES
ARTIFICIAL INTELLIGENCE AND BUSINESS OF SMART GAMES
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Executive Summary
The following article aims to explore the impact of Artificial Intelligence on business firms.
The platform of Augmented Reality (AR), which has been successfully working towards
bridging the gap between a real and virtual world in the recent past has been dealt with here.
As a case study, the immensely popular game Pokémon Go, powered by Nintendo and
Niantic, has been chosen. The game had a significant impact on the world of gaming
technology. The paper attempts to evaluate how the business model canvas of Pokémon Go
has made wise use of Augmented Reality, and made a huge profit within a very short span of
time. Thereafter, the paper provides a few recommendations for improving the services of the
game in future.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Augmented Reality.................................................................................................................3
Pokémon Go...........................................................................................................................4
Impact on Market...................................................................................................................4
Business Model Canvas.........................................................................................................5
Recommendation........................................................................................................................5
Conclusion..................................................................................................................................6
Reference List............................................................................................................................7

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Introduction
Pokémon Go is game based on the concept of Augmented Reality (AR), that was
developed as a collaborative project of Nintendo and Niantic, especially meant to be played
in technological devices built upon an iOS or Android software interface. It was launched in
the year 2016 and immediately rose to fame due to its engaging facility of capturing, training
and fighting of digital or fictitious characters, the Pokémon to be specific, on real-life
geographical locations. In spite of receiving criticisms from certain avenues, it cannot be
denied that this game revolutionized the domain of small-time gaming, and amassed a huge
profit within the course of a year.
Discussion
Artificial Intelligence is widely acknowledged as the most important contributor to
the rapidly advancing technology of the modern age. While on one hand it has brought
human beings closer to machines and automatons, on the other, it has raised the quotient of
achievement-based actions by introducing an array of smart facilities, often based on a
perception of the environment (Makridakis, 2017).
Augmented Reality
The concept of Augmented Reality (AR) comes close to that of Virtual Reality,
however, differing in the magnitude of impositions. While virtual reality opens up a
completely unreal world in front of the people, AR is more rooted to reality and offers a
unique admixture of both the worlds. The concept of AR has been widely discussed by
Michael Porter and James Heppelmann, whereby they declare that the purpose of AR is to
effortlessly bridge the psychological gap between the two realms, the real and the virtual
(Porter & Heppelmann, 2017). In the 21st century, this theory is used not only for easier

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accessibility of daily chores, ranging from ordering food to booking travel tickets, but also for
entertainment purpose through provisions of modernized gaming techniques.
Pokémon Go
The evolution of this game has questioned the metanarratives of gaming technology
and bought significant changes upon the same. In this game, a quester has to traverse the
areas of his own locality in search of digitalized creatures which they are entitled to capture
and make use of through mobile phones (Rauschnabel, Rossmann & Dieck, 2017). The app
offers features pertaining to the game, which the player comes across as he/she passes
through different geographical locations. It had a considerable amount of psychological
bearing on the minds of the players, whereby the dichotomies of appearance and reality are
challenged, and they are strategically made to believe that the occurrences within the gaming
world are real, on which they have a significant amount of control. The introduction of real-
life cafés and restaurants like Starbucks and MacDonald’s as ‘Poke Stops’ further obliterated
the boundaries (Pamuru Khern-am-nuai & Kannan, 2018). The euphoria of discovering their
own locales on virtual media devices, and the provision of playing with them has reduced the
risk of representing three-dimensional entities on a two-dimensional interface. The game
raised the bar of mobile-gaming to a different level, displaying its power to captivate the
minds of gaming public, at the same time, attracting more new customers into the mobile-
gaming arena.
Impact on Market
The domain of Augmented Reality has resulted in behavioural and personality
changes. Conversation of the modern man include terms and phrases linked to the digital
media. With respect to gaming technology, its advancement and engaging element has shifted
the focus from other modes of entertainment to this new quasi-digital platform of augmented
reality. Pokémon Go has topped the charts of digital gaming media since its inception. The

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game holds the record for the maximum number of downloads within the first few days.
Widespread addiction has led to accidents and traffic congestions in different regions (Colley
et al., 2017). Due to an extreme amount of use, severe technical glitches, authentication
errors and problems related to the servers were also reported throughout the world. In spite of
these negative impacts its popularity continued to grow. It had experienced a revenue income
of more than 200million US dollars within the very first month and holds a Guinness World
Record for the same. While on one hand it posed a stiff competition to other businesses of
mobile-gaming, at the same time, it also influenced them and other new market entrants to
make wise use of artificial intelligence.
Business Model Canvas
A ‘business model canvas’ is used to evaluate and rationalize the workflow and
consequent profitability of a company (Osterwalder & Pigneur, 2010). There are certain key
determining factors which goes in to the evaluation of a company. First in this list is the
segmentation of customers or ensuring the customer base. Pokémon Go caters to a diversified
mass market. Another important point is Value Proposition, which aims to solve the interests
of the customers by providing adequate facilities. The newness of this game and the huge
magnitude of customers worldwide prevented the initial technical problems caused by the
sales channels, that is, the servers, to cause much impact on its long-standing reputation.
Value propositions usually have a direct impact on the revenue of any company, however,
statistics of revenue earned through this particular game proves otherwise. Other than years
of strategic teamwork, and initial implementation of expensive tools, a vast segment of the
cost structure of this company goes to the various portals and service providers through
whom, it reaches the market. Taking all these into consideration, it may be said that the vast
response and economic turnover from this game is a marker of its excellent relationship with
the customers.

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Recommendation
The excellent response Pokémon Go received within the first few months and its
subsequent flourish should never give way to complacency. Newer engaging ideas should be
implanted from time to time at a consistent rate, whenever the previous would run the risk of
monotony. It must expand its business beyond the existing fan base, and strive to resolve the
conflicts regarding accidents and traffic congestions. The problems that had emerged from
poor server facilities in the initial days must also be addressed carefully, such that a huge
magnitude of users should not be a hindrance in the face of the services provided, thereby
minimizing the risks of a tarnished reputation from certain small quarters.
Conclusion
In conclusion, it may well be said that Artificial Intelligence, through its platform of
Augmented Reality has made a huge impact on the lives of the modern man. The game
Pokémon Go has influenced the cultural arena on a global scale. It is ironic how the
introduction of real-life locations on virtual media has further removed the borders of reality
and fiction in the mind of the users. Modern man has become hugely dependent on this world
of fiction, which they often inadvertently think real. As a result of the engaging factor, this is
going to have a long-standing impact on human civilization, whether for the good or bad, is
subject to speculation.

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Reference List
Colley, A., Thebault-Spieker, J., Lin, A. Y., Degraen, D., Fischman, B., Häkkilä, J., ... &
Wenig, D. (2017, May). The geography of Pokémon GO: beneficial and problematic
effects on places and movement. In Proceedings of the 2017 CHI Conference on
Human Factors in Computing Systems (pp. 1179-1192). ACM.
Makridakis, S. (2017). The forthcoming Artificial Intelligence (AI) revolution: Its impact on
society and firms. Futures, 90, 46-60.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for
visionaries, game changers, and challengers. John Wiley & Sons.
Pamuru, V., Khern-am-nuai, W., & Kannan, K. N. (2018). The Impact of an Augmented
Reality Game on Local Businesses: A Study of Pokemon Go on Restaurants.
Porter, M. E., & Heppelmann, J. (2017). Why every organization needs an augmented reality
strategy. Harvard Business Review, 95(6), 46-57.
Rauschnabel, P. A., Rossmann, A., & tom Dieck, M. C. (2017). An adoption framework for
mobile augmented reality games: The case of Pokémon Go. Computers in Human
Behavior, 76, 276-286.