Niantic acquires AR studio Sensible Object

Brief:

AR game studio Niantic has acquired London-based start-up Sensible Object for an undisclosed sum, according to CNet. Sensible Object is the developer of AR-tabletop hybrid game "Beasts of Balance."
The Sensible Object team will be part of Niantic London, along with the team at Matrix Mill, an AI and machine vision research team Niantic acquired in 2018, according to Games Industry. John Hanke, Niantic's chief executive, said in a blog post on Tuesday that the Sensible Object team would "focus its efforts on building all new real-world AR experiences," per reporting from The Financial Times.
The news comes as Niantic's "Harry Potter: Wizards Unite" mobile game was released worldwide, CNet reported. Game developers WB Games and Niantic combined characters from "Harry Potter" with the augmented reality (AR) playability of "Pokémon Go," Niantic's 2016 smash that popularized AR gaming.

Insight:

Niantic's acquisition of Sensible Object demonstrates the strong position of the AR gaming studio, which has moved from the trendsetting "Pokémon Go" to the highly anticipated "Harry Potter: Wizards Unite," which is already receiving rave reviews. Niantic in January announced that it had received Series C funding of $245 million. Elsewhere on the AR landscape, Blippar collapsed late last year before returning in January, while AR headset maker Meta Co. has also struggled.

"Harry Potter: Wizards Unite" has arrived after almost two years in development and is expected to be a major hit for WB Games and Niantic. Analytics firm App Annie this month estimated that the game will generate $100 million during its first 30 days of availability as players make in-app purchases. Players aren't required to pay anything to play the mobile game, but ardent "Harry Potter" fans are expected make in-app purchases to personalize their avatars or to accelerate gameplay. While the "Pokémon Go" frenzy has died down, the game still makes money for Niantic, and has generated $2.6 billion in total revenue, per Sensor Tower data.

The "freemium" revenue model has been around for years, and is a big moneymaker for companies like Epic Games, whose multiplayer battle royale hit "Fortnite" generated a reported $3 billion in profits last year from the sale of its V-Bucks digital currency. Players use V-Bucks to buy a seasonal "battle pass," avatar skins, avatar emotes such as dance moves, and digital weapons and gear from its virtual store.

As Niantic's "Pokemon Go" demonstrated with its launch in 2016, there is a strong consumer appetite for AR games that interweave characters from popular media franchises with a smartphone user's real surroundings. AMC Networks and Next Games two years ago created "The Walking Dead: Our World" to let fans of the hit show immerse themselves in virtual battles with zombies. Netflix next year will release an AR mobile video game based on its hit science-fiction horror series "Stranger Things," the company announced this month. Video games based on hit shows are a way to entertain and engage fans in a more immersive setting.