Why the company behind Pokémon Go — Niantic — is getting crypto-curious


It’s been a tough year for cryptocurrency projects, as falling prices, daily scam revelations and the nightmare of blockchain-based computing usability have made venture capitalists’ next big bet seem more like a dream than anything else. can call reasonably. “web3”.

Crypto-based video games, which last year seemed to attract a large audience to start collecting non-fungible chips, have sparked collective outrage over the perceived greed of developers. As a result, the game’s giants were largely fleeing from space.

And so, with that in mind, today we are going to talk about a prominent company that is going in the other direction.

“I think it’s something that could have the biggest impact on this industry, but it’s also probably the most controversial thing we could talk about,” John Hanke said.

Hanke, CEO of Pokémon Go Developer Niantic was closing the keynote address on Tuesday morning at his company’s first developer summit. Niantic has already unveiled the new version of its augmented reality development platform, Lightship, which includes a location mapping feature called Visual Positioning System. Hanke also announced Campfire, a social networking app that opens to a map and allows people to find and interact with players and events to Pokémon and his other games.

However, as his talk drew to a close, he wanted to talk about one more thing: Niantic’s early explorations of incorporating blockchain technologies into its games.

Earlier this year, Niantic met the team behind SpotX Games, a Miami-based company that describes itself as “a web3 innovation studio for the real-world metaverse.” His specialty is creating treasure hunts based on cryptocurrencies that turn the gaming experience into digital collectibles.

“When we met them they started talking about using the blockchain as a way to inspire people to go out, discover new places, have fun with friends,” Hanke said on Tuesday. “It was like we were talking to ourselves.”

Hanke took the SpotX job and acquired the studio.

At South by Southwest in March, SpotX demonstrated a treasure hunt game that offered cash prizes for visiting different places in Austin and interacting with them using web-based RA tools on mobile phones. Anyone who finished the game could generate an NFT by highlighting the places the players visited. It looked like this:

Hanke loved that NFT was more than just a “beautiful photo – it’s a memory of what you did.”

This provides a clue as to where Niantic might try to take cryptocurrency-based games into the future, using technology to authenticate and commemorate experiences as players move around the world. The idea behind putting all this on the blockchain, a SpotX employee told me during a demo on Tuesday, is that the data is hard to falsify. (I don’t know why anyone would pretend to visit Austin or win a treasure hunt, but as is usual with cryptography, technology is still ahead of use cases).

“We’re in the early days here,” Hanke said on stage on Tuesday. “I think you’ll hear more from us on this topic in the future.”


Before Tuesday’s event, I went up to Zoom to discuss Niantic’s latest deals with Hanke. The company has demonstrated with Pokémon Go which could take a nascent technology like AR and incorporate it en masse, generating an estimated $ 5 billion in revenue in its first five years.

For that reason, I found myself interested in Hanke’s tentative embrace of web3. The company seems to be a long way from bringing technology to an iconic property like Pokémon. But this year, the players have revolted suggestion that NFTs could reach their favorite titles. For that reason, I wanted to know what Hanke and his team call the blockchain.

Like many people, Hanke is drawn to the promise of decentralizing cryptography: the idea that interacting with the web through wallets will make individual users more powerful at the expense of platforms.

On Tuesday’s stage, he said today’s web3 debates reminded him of when he was a new founder in the dot-com era. In 2000, Hanke co-founded a company called Keyhole; Google acquired it four years later and turned it into Google Maps.

In the late 1990s, just like now, there were many plans for rapid enrichment and street vendors, he said. But there were also important ideas about to become big companies.

“The potential of web3 is to bring us back to a more decentralized version of the internet,” he said. “And to regain some of that spirit and vision that was there when it started.”

One question I asked Hanke is, even assuming that’s true, why do you need a blockchain for that? The answer is that encryption can allow you to authenticate on websites using much more limited data than we give away today by signing in with Google, Facebook, and similar services.

Hanke told me:

Most people use the identity of one of the big companies. It is our main passport for everything we do, for applications and online. In a sense, we are selling our digital soul when we do that. It’s a habit we’ve built, and it’s how things work right now. But web3 would allow us to have self-sovereign identities. Therefore, instead of using one of these buttons, you may use a web3 system that does not filter your personal information and does not put an intermediary between you and the service you are using that may intercept or store information in a way that you may not want to pass. . So to me, that really looks like it should work.

[…]

It is uses like this that have made me want to bet on it as an integral part of the future internet. Blockchains are really useful in this context, because there is no central authority.

I think in practice it might be quite difficult to make wallets more private and secure than our existing identity tools; Molly White persuasively wrote that cryptocurrencies tend to share more data of which we feel comfortable, as they are in public blockchains and there are no guarantees that anonymous portfolios are not anonymous.

I also wonder if consumer demand for decentralization is as strong as the founders of web3 bet. Centralized platforms allow many of the services we rely on, from password reset to transactions that can be reversed in the event of fraud. Decentralization has so far meant giving up all this, with disastrous consequences for the user experience. No wonder few people have set up a cryptographic wallet, relatively speaking.

At the same time, the frustration with giants like Apple, Google and Facebook is real, Hanke said:

Solving the issue of portfolio incorporation: Everyone sees this as something huge. I don’t think it’s something impossible to solve. I think creating and making a portfolio today is not really for the faint of heart. [But] the reward there is very great. So we’ll see if consumers continue to care about those things, if they care more about them over time, and continue to be careful that people look over their shoulder and look at their personal information continuously or not.

So far, I think the question here is less about whether consumers would be interested in more private methods of doing business online than whether those methods are safe and convenient. Hanke told me that he sees challenges in designing a good user interface and that a certain “healthy skepticism” is appropriate.

My last web3 question for Hanke was why I thought average people would be thrilled to see NFT and other cryptographic products in their games. He said such products allow players to reward creators more directly, and that intermediaries have a much smaller cut than before and that people love to support independent projects. (Equally interesting to me is what he did no let’s say, adding NFT to video games would make them more fun to play).

On the one hand, it can be a little unfair to put so much pressure on Niantic in what are clearly some very initial plans. Hanke was direct about the fact that the company has more questions than answers about web3. NFTs may very well never arrive Pokémon Go or any of his other great titles.

On the other hand, Hanke sure seemed serious to me. And Niantic has something that very few other crypto-game developers do: tens of millions of users. That gives the company an influence that its rivals lack. And, assuming anyone can figure out how to make encryption useful or fun, the user base could also give the still-private company a major opportunity.

“Frankly, it’s very easy to rule out that whole set of technologies, just based on some of the things we read about,” Hanke told the developers. “I think it would be a big mistake. I think there’s something very important about this technology.”



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