Why the company behind Pokémon Go – Niantic – is becoming crypto news

It has been an extraordinarily difficult year for cryptocurrency projects as prices crash, daily scam revelations and the lingering usability nightmare of blockchain-based computing have made the next big gamble for venture capitalists sound more like a pipe dream than anything you could reasonably imagine. might call it. “web3.”

Crypto-based video games, which last year looked like they could attract a large audience to collect non-perishable tokens, instead sparked collective outrage over developers’ perceived greed. As a result, gaming giants have largely fled outer space.

And so, with that in mind, today let’s talk about a top company going the other way.

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

Hanke, CEO of pokemon go developer Niantic, closed the keynote at his company’s first-ever Developer Summit on Tuesday morning. Niantic had already unveiled the new version of its augmented reality development platform Lightship, which includes a geolocation feature called Visual Positioning System. Hanke also announced Campfire, a social networking app that opens on a map and allows people to find and interact with players and events. pokemon and its other games.

However, when his talk ended, he wanted to talk about one thing: Niantic’s early explorations of integrating blockchain technologies into its games.

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

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

Hanke was captivated by SpotX’s work and acquired the studio.

In March, SpotX showed a scavenger hunt game at South by Southwest that offered cash prizes for visiting various locations in Austin and interacting with them through web-based AR tools on mobile phones. Anyone who has completed the game can generate an NFT showing the locations players have visited. It looked like this:


Hanke liked that the NFT was more than a “pretty picture – it’s a reminder of what you’ve done”.

This gives an idea of ​​where Niantic could try crypto-based games in the future, using technology to verify and commemorate experiences as players move around the world. The idea behind putting it all on the blockchain, a SpotX employee told me during a demo on Tuesday, is that the data is hard to tamper with. (I don’t know why anyone would fake a visit to Austin or win a scavenger hunt, but as usual with crypto, the technology is always ahead of the use cases.)

“It’s the start here,” Hanke said on the podium on Tuesday. “You’ll be hearing more from us in the future, I think, on this subject.”


As Tuesday’s event approached, I hopped on Zoom to discuss Niantic’s latest offering with Hanke. The company has proven with: pokemon go that it could take a fledgling technology like augmented reality and make it massively mainstream, with revenue of about $5 billion in its first five years.

For this reason, I found myself interested in Hanke’s tentative embrace of Web3. The company seems a long way from bringing technology to a flagship like pokemon. But this year the players revolted against the simple suggestion that NFTs could eventually come to their favorite titles. For this reason, I wanted to know what blockchain appeals to Hanke and his team.

Like many people, Hanke is drawn to the promise of crypto decentralization – the idea that interacting with the internet through wallets will empower individual users at the expense of platforms.

On stage Tuesday, he said today’s Web3 debates reminded him of the time he was a young founder in the dotcom 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, like today, there were a lot of get-rich-quick schemes and peddlers, he said. But there were also important ideas that were about to become big business.

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

One question I had for Hanke is, even if this is all true, why do you need a blockchain for this? His answer is that cryptography can allow you to authenticate to websites with much more limited data than what we give today by logging in with Google, Facebook and similar services.

Hank said to me:

Most people use an identity from one of the big companies. It’s our main passport for everything we do, in apps and online. In a way, we’re selling our digital soul when we do this. It’s a habit we’ve developed, and it’s kind of how things work now. But web3 would allow us to have self-sovereign identities. So instead of using one of these buttons, you can use a Web3 system that does not disclose your personal information or an intermediary between you and the service you are using, who can intercept or store personal information, in a way that you may not want to happen. So to me that really looks like how it should work.

[…]

This kind of use made me want to bet on it as an integral part of the internet of the future. Blockchains are useful in this context precisely because there is no central authority.

I think in practice it can be quite difficult to make wallets more personal and more secure than our existing identity tools; Molly White wrote persuasively that crypto wallets tend to share After data we’re comfortable with, such as on public blockchains, and there’s no guarantee that anonymous wallets won’t be anonymized.

I also wonder if consumer demand for decentralization is as strong as the web3 founders bet. Centralized platforms enable many of the services we depend on, from password resets to transactions that can be reversed in the event of fraud. Until now, decentralization has been about letting go of all that, with disastrous consequences for the user experience. It’s no wonder that relatively few people have set up a crypto wallet.

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

Solving the wallet integration problem – everyone sees this as something huge. I don’t think it’s an impossible thing to solve. I guess designing and making a wallet is not really for the faint of heart these days. [But] the reward there is very great. So we’ll see if consumers continue to care about these things — whether they care more over time and stay wary of people looking over their shoulder and looking at their personal information all the time or not.

For what it’s worth, I think the question here isn’t so much whether consumers would be interested in more personal methods of doing business online, rather than whether those methods are safe and convenient. Hanke told me that he sees challenges around good UI design and that some “healthy skepticism” is in order.

My last Web3 question for Hanke was why he thinks average people would like to see NFTs and other cryptocurrencies in their games. He said that these products allow gamers to more directly reward creators, with middlemen getting a much smaller discount than before, and people love to support indie projects. (Equally interesting to me is what he did Do not say – that adding NFT to video games would make them more fun to play.)

On the one hand, it might be a little unfair to push Niantic so hard on what are clearly very early plans. Hanke was candid that the company has more questions than answers on web3. NFTs may very well never happen pokemon go or any of his other great titles.

On the other hand, Hanke seemed serious to me. And Niantic has something very few other crypto-curious game developers do: tens of millions of users. This gives the company leverage that its rivals lack. And, assuming anyone can figure out how to make crypto useful or fun, the user base could also provide the still private company with a significant opportunity.

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

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