<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=2072533126306303&amp;ev=PageView&amp;noscript=1">

IP Street Blog

How Google’s Patent Stash is (Probably) Making Them a Ton of Money on Pokémon Go

[fa icon="calendar"] Aug 11, 2016 9:44:58 AM / by Tyler Hakes

Tyler Hakes

Pokémon Go has basically taken over the universe.

We’ve heard almost nothing else about gaming and technology since its release in July. So many people have downloaded the game that it's redefined what success means for a mobile game launch.

And it’s also been a smash financial success. By all accounts, it’son track to turn out $1 billion per year in revenue. Not bad for a game that’s only been out for a month.

But who’s making all that money?

Nintendo’s now-notorious stock jump was attributed to some botched market analysis that assumed they were raking in the dough from its overnight success. (Hint: They have a small stake, but it’s not really their thing).

Nintendo Shares after Pokemon Go Release

At its peak, Nintendo shares were up some 120% before investors realized that Nintendo didn’t actually create the app. (Although Nintendo and The Pokémon Company have both invested in Niantic, the game’s creator.) As of today, shares are still up 58%.

But it seems clear that neither Niantic nor Nintendo are ultimately banking to the tune of $2 million per day. So who else stands to make a fortune here?

It’s already been widely reported that Apple and Google will take a 30% cut on all in-app purchases within Pokémon Go as per their normal arrangement with app sellers.

But that’s not even the half of it.

Follow the patents, follow the money

If we look a bit deeper, we can find that Google, which spun off Niantic in 2015, may be the ones raking in a big chunk of the cash that’s being made from Pokémon’s resurgence.

Niantic, Inc. actually only owns one patent related to its augmented reality game. But the rest of the tech (list here)--from gestures and data management down to the actual integration of augmented reality with earth data--is owned by a different firm.

You guessed it: Google.

List of AR gaming patents owned by Google, Inc.

Many of these patents, filed between 2010 and 2014, were invented by David Kornmann (head of Niantic), Alejandro Nijamkin, and Mark Aubin.

Ownership_of_Patents_Invented_by_Niantic_Team.jpeg

Although no details about the specific arrangement between Niantic and Google are made public, it seems likely that Google is generating a hefty sum of cash from licensing the patents on the technology that powers pretty much the entire Pokémon Go platform.

Alphabet, Inc. Shares After Pokemon Go Release

This seems to have gone largely unnoticed by most investors, as Alphabet, Inc. (Google’s parent company) has seen steady gains since the release of Pokémon Go, but nowhere near the explosive growth that Nintendo experienced over the same period of time.

Looking ahead, there are even bigger implications for the firm. With such a treasure trove of AR gaming-related patents on their books and the explosive success of Pokémon Go driving new firms to enter the AR gaming arena.

This could be an entirely new stream of revenue for Google well into the future.

Topics: Patent Research

Tyler Hakes

Written by Tyler Hakes

Tyler Hakes is a researcher and writer using IP Street to tell interesting stories through patent data.