Pokémon Go AR

If you work in a big city, you need only step outside during your lunch break to see the effects of the first true AR craze. Odds are, you'll see someone wandering around, eyes glued to phone, looking to add a new Pokemon to their collection or to rustle up some Pokéballs at a nearby Pokéstop. Launched just last week for iOS and Android phones, the latest installment of the Nintendo-originated videogame franchise has become a cultural sensation, sending gamers off the couches and into the streets to travel through a fantasy universe layered over the top of a Google Maps-like representation of the real world. By some accounts, Pokémon Go is on track to become more widely used than Twitter in less than a week's time on the market. Here's what the wild success of Pokemon Go may portend for the media market. 

1. Augmented reality is potentially a big business. A very big business. AR's bigger brother, virtual reality, gets most of the press thanks to its more immersive nature. But some observers expect the action to be in AR.  Market research consultant Digi-Capital, for instance, is projecting that by 2020, the combined AR/VR market will reach $120 billion, with AR making up about $90 billion of the total. Goldman Sachs is more bearish, predicting a combined AR/VR market of anywhere from $15 billion on the low end to $110 billion on the high end.

2. Runaway success may be the tricky part.  If your AR application has a networked component, you need to make sure demand won't outstrip your service capabilities and melt your servers. Pokémon Go players have been reporting intermittent service outages, and developer Niantic has already had to slow the app's international expansion due to server load issues. 

3. Privacy issues are no joke. Pokémon Go has already had its first scandal. The application apparently dramatically overstepped its bounds by requesting full access to users' Google accounts. Eager Pokémon hunters were only too happy to comply, meaning the game theoretically had read access to all of their Google account data, including email. Ars Technica called it a "possible privacy trainwreck," but Wired reports that the app has been updated to fix the issue earlier today. So be careful if you're collecting data about user's activities in the real world, and their real identities, lest you turn an army of privacy advocates against you right out of the gate.

4. Familiar franchises have a lot of leverage in a brave new media world.  It's no surprise that the first killer AR app is based on a beloved franchise, just as it makes sense that the most buzzed-about application for the forthcoming PlayStation VR is the Star Wars Battlefront VR edition. "Battlefront is going to be one of those games that will really show gamers what it means to be in the world of VR," as Sony Interactive Entertainment VP of marketing John Koller told Fortune. It's safe to say that many early consumer AR and VR sensations will benefit from built-in nostalgia and/or nerd appeal.

5. AR hardware is already in your pocket. Fancy AR hardware like Microsoft's Hololens or Meta's latest development kit or whatever it is that Magic Leap is getting ready to unleash on the world is still a ways down the road. But smartphones that can run lightweight, 2D AR experiences like Pokémon Go are tiny and ubiquitous. That's one reason AR has a head start on VR, which requires a pricey headset and a hefty desktop computing rig to come close to being truly immersive.