John Hanke put in his time evangelizing location-based gaming and augmented reality. He spent six years refining Ingress as the first AR game from Niantic Labs, which was incubated by Google. So it’s nice to see that work pay off with the success of Pokémon Go, which has generated an estimated $200 million in sales since its launch on July 6, according to Sensor Tower.
Hanke now officially qualifies as a visionary, or someone who sees something that no one else does. He was willing to undergo derision and skepticism during the hard years of investing in Ingress. Now he has put AR on the map, and that notion of AR being a $90 billion business by 2020 (as predicted by Digi-Capital) doesn’t seem as crazy anymore.
Before starting Niantic within Google, Hanke started Keyhole, which was acquired by Google in 2004 and became the foundation for Google Earth. As for the future, Hanke said he is a science fiction fan. “I want contact lenses that transform everything into whatever themed world I want it to be,” he said.
Don’t we all. Hanke spoke at our GamesBeat 2016 event last week in Los Angeles in a fireside chat moderate by Paresh Dave, reporter at the Los Angeles Times.
Here’s an edited transcript of their talk. You can also watch the video embedded below.
GamesBeat: You started at Google working on Earth and Maps and other products. Then you came up with this game called Ingress. What’s the inspiration for that?
John Hanke: I was lucky. I helped start a company called Keyhole that Google bought in 2004. We worked on this earth viewer project, which became Google Earth. I worked on Maps and Earth and those related projects for about six years at Google. That group grew from a few dozen people, about 30 people in 2004, to more than 1,000 engineers and project managers and a couple thousand contractors working on Google Maps in 2010.
I wanted to go do something a bit more entrepreneurial. I had been at several startups before coming to Google. We were thinking about how we’d built this map of the world. We’d helped bring maps to the Android and iPhone, GPS. I grew up as a gamer. People seemed to like to do social things with games. It seemed like there was something interesting at the intersection of maps and mobile phones and gaming.
We formed this little group. We got permission from the higher-ups at Google, primarily Larry at the time, to give it a shot. We started trying to create something interesting in that area. We did Field Trip first, which is a product that’s still out there. It’s about discovering information about historical sites and cultural things in your immediate vicinity. Then, as that product was launching, we started working on Ingress, which is the precursor to Pokémon Go. We incorporated some concepts around location and multiplayer, discovery of local places, and put that out there.
GamesBeat: You described your company’s mission as involving exploration and exercise and real-world social interactions. Those don’t sound like the mission statements you usually hear from a game company. Where does that mission come from, and how does that jive with being a game company?
Hanke: We’re definitely about fun and adventure, but we were in this interesting position of starting this up inside Google. The mentality within the company was, you don’t just copy somebody else. You try to do something innovative. We were looking at the areas we wanted to explore and thinking about what we could add to the universe of products out there that other people weren’t doing. We weren’t really interested in trying to copy somebody else’s success or copy somebody else’s formula. We wanted to explore a new area and see if there was something worthwhile in it.
We came up with a list of — I don’t know what you would call them. Our philosophy of things that would guide our decision-making about what products we wanted to build. One of them was, “If it’s a game you have to go out and move around to play it. You have to go outside and visit new places.” We came with an idea about seeing the world with new eyes, I think is how we put it. But the basic notion was there’s a lot of cool history and lore and unknown secrets in your own neighborhood that you don’t know about. If a product could help you discover those, that would be a good thing.
As a parent, there’s this idea that we wanted to build a product that would encourage exercise, but not in a heavy-handed way. I was struggling with the whole screen time issue with my kids. Trying to pull people away from all these compelling products that we’d built. That was another thing we were trying to achieve.
And then social. We had flagged this idea of “real world social.” This was a post-Facebook world where online social had exploded. People were making connections like wildfire online, updating status, doing all that, but translating that into the real world — we felt like there was an opportunity for a product to help people connect physically, offline. We didn’t know exactly what form that would take, but we felt like there was an opportunity to unlock something there. We had those as our guide rails for the product and we took it from there.
GamesBeat: When it came time to leave Google as they underwent restructuring last year, what was your strategy? Why did Pokémon become the partner you wanted to work with? Why did you mostly take money from strategic investors as opposed to just venture capitalists at that stage?
Hanke: There’s a lot that went into that. To unpack it, we had launched Ingress in 2012. The game was growing. I’d describe it as a cult hit. It’s had 15 million downloads. It was thriving and continues to grow now. We felt like we’d learned a lot about building a game that followed those guidelines we’d set for ourselves — exploration, discovery, exercise, social. We were thinking about, well, how do we package up the parts of that that are working and take it to a wider audience?
We had considered a variety of options. Different internal ideas, totally internally developed IP. We also looked across the film and gaming world at IP that might be a good match, where we could combine a well-known property with the type of gameplay that we wanted to continue to evolve. In those discussions, Pokémon came up early on. I imagine a lot of you have played Pokémon or are familiar with the franchise. It represented something that was beloved around the world, very well-known to gamers and non-gamers through the animation, and it had this attribute of—the whole backstory of the game is that the trainer is out in this environment that looks like the real world discovering Pokémon. It was perfectly set up to translate that into this real-world augmented reality game that we do.
It was around April 2014. Google did an April Fool’s joke. The Maps team did this mash-up with Pokémon. They did a video that got 18 million views. On the Niantic team we’d been talking about different IP to use and we saw how that took off virally. We reached out to the Pokémon Company at that point and said, “This joke did really well. Let’s build a real game around on that concept.”
They had already been playing Ingress. The CEO of the Pokémon Company, Mr. Ishihara, was I think a level 11 Ingress player when I met him. He was playing with his wife every day. They were into the concept and got it from day one. I’ve given a lot of pitches for different kinds of businesses and partnerships through the years, but this was one where from that very first meeting, it seemed inevitable. Both parties said, “We have to do this.” We got a deal signed shortly after that.
Then, whenever the Alphabet reorganization happened, we were looking at how to continue doing our project, whether to fold that in under Android or one of the other Google divisions or whether to seek outside financing and do it as an independent company. We talked to VCs and our partners at the Pokémon Company, and through them with Nintendo. They were ready and willing to step up with financing and get behind the product in that way, to be an equity investor as well as a contributor of IP and gaming expertise. That seemed like the right way to go.
We could have taken money from venture folks, but to do it and create that kind of close relationship with Pokémon and Nintendo made them comfortable, collaborating with us around this crown jewel property — it made that whole relationship just rock solid on both sides. They’ve been terrific partners.
GamesBeat: How familiar were you with the Pokémon franchise before the April Fool’s joke?
Hanke: I missed it as a gamer. It came after that phase for me. But as a father of three — my oldest son just graduated from high school a few months ago. I have a girl who’ll be a junior next year and a younger son who’s 10. Our house was filled with Pokémon trading cards and guidebooks and videos and a stack of cartridges for several generations of Nintendo handhelds. I knew it mainly through the eyes of my children, as a game property, but it was clear — if you guys have kids who play those games, it’s the kind of game that your kid will spend hours with. People really enjoy that world and being in it. It felt like a super solid thing to build on.
GamesBeat: Taking Ingress as a base for Pokémon, you were saying that you completely scrapped the code. You rewrote the engine for it. What are the advantages and disadvantages to doing that? Is that commonplace, do you think?
Hanke: Many of you are developers or run companies that develop games, yeah? You usually get it wrong the first time. It’s pretty common that you get V1 of a product out there, your users use it, and you see everything that’s wrong with it. You realize all the architectural mistakes you made. You can patch it and improve it up to a point, but it’s often the case that it’s a good idea to put it aside and do it again, learning from everything you did the first time.
With Ingress, we had the benefit of having millions of users play that game. We were able to monitor it on the back end and understand how it was performing, how it was scaling, what the costs to operate the game were. We understood that there were ways to do things in a more efficient way if we were to rebuild the system. We had people on the team that were able to do that, so we undertook to basically do a version two and build our future products on that new infrastructure.
I’m super glad that we did it, because the scale that Pokémon Go hit would have absolutely crushed our first-generation technology. There’s no way we could have handled the influx of users. I’m so impressed by our team and what they’ve accomplished with the technology, because what we have today has held up to — there have been some outages and we’ve had our struggles as we’ve rolled the product out, but it’s held up to a staggering amount of traffic. It was definitely the right business decision in this case to put V1 aside and invest in V2.
GamesBeat: One thing I’m fascinated by is the relationship you’ve created with real-world places. A friend of mine described it as you guys being a virtual real-estate company, where you have this control and power over locations in the real world. But there’s also been — it stretches from basic issues to more complicated ones. Are you going to let people create locations in these vast swathes where Ingress players didn’t create Pokéstops and portals? And complicated issues like the advertising question, or sponsored locations. Can you get into how you view that relationship between locations and virtual objects?
Hanke: We ended up building Ingress and then Pokémon Go around places that we thought would be fun for people to discover. In a sense I guess it’s good that we didn’t have too much adult supervision when we started, because it probably would have sounded like a really bad idea. We were trying to combine things that seemed like they wouldn’t fit — art, historical markers, museums, things like that — with a science fiction game.