Analysts project mobile augmented reality to become the primary driver of the global AR and VR market. In 2017 Digi-Capital projected the AR market got even stronger than expected. AR is one of the hottest technology developments in the mobile industry, but it’s is still far from being a major platform.
Ultimately, AR has five big technical hurdles to clear to find mass market adoption in mobile gaming: 1) a hero device, 2) a battery that will let us play all day, 3) ubiquitous connectivity 4) a thriving developer ecosystem, and 5) a way to monetize. Some of these hurdles are closer to being overcome than others.
Where AR gaming is now
Both Google (ARCore) and Apple (ARKit) have introduced their own SDKs and are courting the development community to create compelling AR content designed to engage and retain audiences. These tools will help developers bring AR into the mainstream.
New devices like the iPhone 8 and iPhone X, and the introduction of the inaugural ARKit and ARCore SDKs, will make it easier for developers to create compelling mobile AR experiences. Powered by Apple’s new A11 Bionic chip, ARKit enables developers to use the iPhone’s cameras and large screen size to deliver more engaging AR experiences.
One of the featured demonstrations at the iPhone X release was for Warhammer 40K Freeblade, developed by Pixel Toys. The demo of robotic warriors battling on a table is cool, but more interesting for developers is the ability to overlay data onto AR characters. Zynga recently developed an AR mode for CSR Racing 2, which lets gamers view race cars in stunning AR. The new AR feature is free, providing gamers with extra added value.
Eplay has taken that idea a step further to reinvent fantasy sports and provide traditional leagues concerned over waning fanbases a toolset to engage younger audiences—something the company refers to as “Poké-sports.”
Demonstrating the savvy of large media brands, The Walking Dead franchise has also taken a slash at AR gaming. The game will be available in the App Store and Google Play, but there’s no word yet on exactly when it will launch.
While each of these apps is fascinating, it’s still early for AR in mobile gaming, and there is a lot of experimentation, trial, and error yet to happen. On the monetization front, one of the key questions to answer is how ads can elegantly play and scale into the whole AR experience.
AR will create a number of new monetization wrinkles for mobile game developers, who will certainly be among the most committed early adopters of ARCore and ARKit, and a lot of questions still need to be answered.
Will static ads and traditional formats, like interstitials, survive the transition? Can video ads, which have proven to be lucrative elsewhere, be integrated seamlessly? Can advertisements that the user actually plays be even more effective than those they can watch, like rewarded play? If companies buy space to overlay in augmented reality, what would be the trigger to display the ad? Will our AR future look like this?
The reason ads, in-app and otherwise, get a bad rap is that they can be annoying and take users out of an experience. How much will the user be willing to tolerate ads when immersed in a mixed-reality world?
These marketing metrics exist in other mobile gaming genres, but there are few authoritative public sources of this data in the AR realm. Publishers, marketers and brands will need to work through a new learning curve to learn how to optimally monetize AR games.
Current challenges for AR
Since monetization for AR games hasn’t been hashed out yet, the tech may face difficulty attracting developers. For now, gaming is the most logical use of the technology and as a result, is spearheading a wave of AR apps. But gaming can only do so much for AR. Without a thriving ecosystem of AR apps beyond just games, the technology will remain dead in the water.
One thing that will help launch AR apps into the mainstream is if Apple and Google create a dedicated section in their respective app stores featuring compelling AR apps. But for this to happen, there needs to be a surge of developers betting on the potential of AR in the future, which has not happened yet.
Additionally, while powerful devices like the iPhone X are great for using AR, battery tech has yet to catch up. AR requires significant amounts of battery power in order to render digital elements in real-time as well as powering the camera. With current battery technology, mobile gamers will only be able to enjoy AR games in short spurts. If it comes down to playing an AR game or conserving battery life to last the rest of the night, consumers will choose the latter.
There’s no doubt that AR can help create some truly unique and compelling gaming experiences. But until there’s mass adoption of AR-capable devices and a healthy ecosystem of AR apps, the tech will continue being a novelty instead of a necessity.
Johannes Heinze is Managing Director, International at AppLovin, a leading mobile marketing platform that helps the world’s largest brands reach over two billion consumers globally with relevant content.