Metaverse builders see virtual pets as their killer app

Driving the news: Pokemon Go creator Niantic revealed its next game yesterday, an augmented reality pet simulator named Peridot.

• In the new mobile game, players raise, feed, train and even breed colorful, procedurally generated little creatures.
• Similar to Pokémon Go, the game uses a phone’s camera to make the creatures visible in an overlay to the real world, using augmented reality techniques.
• Senior product manager and producer Ziah Fogel said that Niantic’s location-based tech allows the pets in Peridot to recognize real world obstacles and topography, like the difference between grass and concrete.

Niantic, which formed within Google years ago and spun out as its own private company, has long viewed itself as more than a game developer, but rather a creator of real-world experiences enhanced with location-based data.

• Last August in a blog post, Niantic CEO and Founder John Hanke described what the company strived to create as a “real world metaverse.”
• He explained it as “one infused with data, information, services, and interactive creations. This has guided our work to date, both in terms of our first attempts to incorporate these concepts into products like Field Trip, Ingress, and Pokémon Go, and in terms of inventing critical technology to enable them.”
• Niantic wants to overlap the reams of data gathered from satellites and on-the-ground players to build out living, persistent maps of information that can be shared with anyone in real time.

The big picture: Virtual pets have long been a way to create curiosity and bring new users to platforms big and small.

• In the late 1990s, Tamagotchis put portable electronic gadgets in the hands of millions of people.
• In the early 2000s, Neopets taught a young generation how to navigate a website. 
• The Sega Dreamcast had Seaman, the Nintendo DS had Nintendogs, and there are plenty of other examples — including The Sims on PC, Farmville on Facebook and even Pokémon Go itself for mobile phones.
• These digital pets invite emotional attachment and can also serve as an attractive hook for younger players.

Niantic isn’t the only firm trying to lure people to the future of the internet with virtual pets.

• ZED is a horse-racing NFT platform, where users buy, sell, breed, train and race unique virtual horses.

• Popular NFT game Axie Infinity lets players collect, train, breed and battle with little Pokémon-like creatures as well.
• In this landscape, however, Niantic is very much ahead of the curve. Its breakout AR success Pokémon Go has brought in more than $5 billion in lifetime revenue so far.

Yes, but: Actual consumer knowledge and enthusiasm for whatever the metaverse will become remains low, according to various surveys.

• A Gartner poll released in February reported that only 6% of respondents feel comfortable enough in their understanding of the metaverse to explain it to others.
• A Tidio survey from last month reported that 77% of respondents thought that the metaverse could cause “serious harm” to society.
• An Ipsos poll published in January showed that only 35% of those familiar with the metaverse are “excited” about it, and an Axios-Momentive survey for the Axios What's Next Summit found that "excited" contingent to be only 7%.

Our thought bubble: While Meta seems to be chasing a metaverse contained within a VR headset, the latest versions of that equipment haven't yet found wide mainstream appeal.

• AR experiences could serve as a bridge to bring together these emerging technologies.
• Arguably, no company has found more success with AR than Niantic — and the mountains of information its players are gathering could make it a metaverse force to reckon with.

What’s next: Peridot will release in beta in limited markets this month, with others soon to follow.