Invasion!

I can’t stop talking about Pokémon.

We are two weeks into the latest mobile game phenomenon. It continues to dominate headlines.

That’s practically eternity for something deemed a “fad”.

What does that tell you?

It’s an exciting time. Regardless of whether or not you play the game. This is why…

Pokémon GO is the beginning of the mixed reality revolution.

I’m talking about augmented reality (AR) and virtual reality (VR).

I can’t reiterate the importance of this technology enough.

It’s the breakout beginning of a market Goldman Sachs estimates will reach $80 billion by 2025.

It all starts with Pokémon GO. But it’s endless in possibilities.

AR will change the way we see the world. It opens the door for smartglasses. Regular looking glasses, just like the ones you might be wearing right now. But built into them will be a camera…motion sensors…image processing tools…location data…

The end result will be the superimposition of a world of valuable information over everything we see.

We will all be supergeniuses plugged into an electronic brain…

AR will change the way we shop. Swedish home goods behemoth Ikea already uses AR in their smartphone app. Forget the guessing game of how that couch will look in your living room… Ikea’s app allows you to visually place any piece of furniture in their catalog into a room in your home using your smartphone camera. Its test drive shopping (you still have to put the blasted thing together though).

Ikea’s AR app has been out since 2013. I bet you didn’t know it though. Because it takes a phenomenon like Pokémon GO to make AR mainstream.

Other retailers will likely soon follow in Ikea’s steps. It’s just the beginning of AR retail. All thanks to Pokémon GO bringing the technology to the forefront.

And to believe, it all started with a game. Games aren’t a joke. They are a big reason for why technology has advanced so rapidly.

One of the first computer games, called Spacewar, ran on a DEC PDP-1 minicomputer in the early ’60s… by today’s standards, an incredibly crude piece of hardware.

In the early ’70s, Pong became a hit. It was the first popular consumer computer game.

As for me, I grew up on post-Pong Atari, Nintendo and PC games. From my young point of view, the whole point of owning a computer was to play games.

Each of these games were innovative for their time. Each opened the door for the device it was played on. It revolutionized its platform.

Pokémon GO is buggy. It is crude. But it has the popularity to make AR and VR mainstream…it’s the Pong of future AR games.

It’s a look at the future of how we are going to interface with computers and the world. And despite the crudeness, it’s already become the biggest mobile game in U.S. history.

What’s even more astonishing is that this feat has been accomplished in mere weeks (Pokémon GO was released July 6). Millions of people are wandering about aimlessly with their heads down trying to collect the little in-game characters.

It’s getting people off their couches. It’s bringing communities together…people who would have never spoken otherwise are sharing tips and tricks to the game.

The Pokémon GO breakout is going to be very good for investors as well.

I predict there will be a frenzy of R&D among tech and gaming companies after the success of this new game finishes sinking in. Everyone is going to flock for a piece of this industry. But not all will succeed.

To a bright future,

Ray Blanco
for The Daily Reckoning