When throngs of Pokémon Go fanatics took over Downtown Bellevue Park two summers ago during the height of the augmented reality game’s initial craze, just a few blocks away Edward Wu and his teams were hard at work making sure the game would be more than a fad.
Wu leads the Bellevue, Wash., engineering office of Niantic, the maker of Pokémon Go and one of the hottest gaming companies in the industry right now. The company is based in San Francisco, but about a third of Niantic’s total personnel — around 50 people — is based in Bellevue, a city that has rapidly become a hub for gaming companies in recent years.
In an interview with GeekWire, Wu says the Bellevue location is growing so fast, that it will soon move to the floor below its current office. The new 12,500-square-foot space will be more than twice the size of its current office. This is already Niantic’s fifth office since it spun out of Google and opened the Bellevue engineering office in October 2015.
“Every year we’ve been out, we’ve roughly doubled in size across the company,” Wu said about Niantic’s growth since spinning out of Google three years ago. “Engineering has grown a little bit faster than that. I don’t know if we’ll grow at that same velocity, but we’ll probably grow significantly next year.”
Pokémon Go has been an unquestionable hit. With 800 million downloads as of earlier this year, the app has reportedly taken in $2 billion in revenue in just over two years.
The game initially sent Nintendo’s stock skyrocketing, until the company acknowledged that it didn’t actually make or own Pokémon Go and would see little financial impact from its success. Niantic is the developer and it worked with The Pokémon Co., the business that markets and licenses the franchise to outside developers. Nintendo has a 32 percent stake in The Pokémon Co.
While the game has cooled off some since its frenzied debut, Niantic has steadily added new characters and features to keep its audience interested. Summer is always the busiest time of year for the game, since it is based on people spending significant chunks of time outside. This year, Pokémon Go, at least anecdotally, appeared to have a resurgence in popularity, thanks to a series of social features that makes the game more cooperative.
Wu explained that Pokémon Go has always been a social game since everyone looks for the same Pokémon, but they were still playing on their own. The addition of the ability to become friends with other players and send gifts has got people playing together more than ever.
Layered on top of the real world, Pokémon Go centers on gathering areas — known as Pokéstops — around popular landmarks. Pokémon Go’s mapping capabilities and data built on Niantic’s last game, Ingress, which pits two teams against one another in a global bid to capture and link together important points of interest.
Choosing the key points to center its games around represents has been an important undertaking for the company. Niantic started with approximately 1 million points of interest for Ingress, and partially thanks to the ability for Ingress users to submit new locations, that figure now stands at upwards of 7 million for Niantic’s overall AR platform.
“It cannot be understated how important this data set is because when you’re creating an AR experience, in order for people to not be drawn out of the experience that they’re in, there has to be a level of correspondence between the real and virtual worlds,” Wu said. “There’s no point to merging the real and virtual worlds unless there’s correspondence there. If a game is telling you that this place is super important, you’ve got to capture it right now, but if it turns out to be some random parking lot out in the middle of nowhere, it creates this level of cognitive dissonance where you’re like ‘why is this important?'”
Wu was the first person in the Bellevue office, and he convinced Niantic leadership that Bellevue’s status as a gaming hub home to hundreds of companies and Seattle’s cloud dominance made the area a perfect place to grow. Building these worlds on top of the real world takes a lot of computing power, and Wu says Niantic uses Google Cloud services to host its platform.
People are crammed in pretty tight at the Bellevue office, with a kitchen and a couple conference areas taking up the rest of the space. Popular Pokémon like Pikachu populate the office and a Snorlax makes a guest appearance at every meeting in the main conference room.
One meeting room features a fully functional Dance, Dance Revolution arcade game, wired up to flatscreen TVs through an emulator. The company brought it in to mark the successful launch of Pokémon Go.
In addition to engineers, the Bellevue office also has people working on game design and product management. The Bellevue team is focused on Pokémon Go and continuing to build the core platform that powers all of Niantic’s current and upcoming games.
Next up for Niantic is a new game, Harry Potter: Wizards Unite. Wu kept it close to the vest when asked about the game, declining to reveal details. The company hasn’t given a release date, beyond saying it will arrive in 2018.
Niantic will continue to work with franchises like Pokémon and Harry Potter to build games on top of its augmented reality platform, while also creating its own titles to test boundaries of what it can do. Wu says “virtually everyone wanted to talk to us” following the success of Pokémon Go, giving the company the opportunity to be selective in who it partners with.
Niantic doesn’t talk much about financials, but Wu said the company is one of the most financially stable and profitable startups in the U.S. Like many mobile games, in-app purchases are a big part of the revenue stream.
Another important source of funds comes from the ability to offer sponsored Pokéstops. This represents a form of advertising, Wu says, that is unmatched because it essentially guarantees foot traffic.
“The consumer gets a benefit because they get to go to a place that actually very much welcomes their presence there,” Wu said. “The sponsors get foot traffic and actual people coming to the stores, which is a capability that I think is very, very unique in terms of any kind of mobile or local advertising.”