Pokémon GO Craze: How does augmented reality

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Pokémon GO Craze: How does augmented reality influence Asia retail? August 2016 Asia Distribution and Retail

Transcript of Pokémon GO Craze: How does augmented reality

Pokémon GO Craze: How does augmented reality influence Asia retail? August 2016

Asia Distribution and Retail

In this issue…

1. What is augmented reality? (P.4)

2. Pokémon GO: The mobile app (P.5)

• What is it about?

• How does it work?

• How does it relate to AR?

• What are the major concerns?

3. Pokémon GO: Impact on brands and retailers in Asia (P.13)

• How do brands and retailers ride on the wave?

4. Pokémon GO: Implications for China retail (P.28)

• Implications for China retail

• Pokémon GO: the China version

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1. What is augmented reality?

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What is augmented reality? • Augmented reality (AR) is always mentioned together with virtual reality (VR).

Augmented reality Virtual reality

What is it? An overlay of digital imagery onto the real world

A complete immersion in the virtual world

How to use? Either wearing a head-mounted display (HMD) or using smartphone’s camera as a substitute for digital image projection

Wear a HMD and connect the device with either computer or smartphone

Users’ experience More on real time interactivity More on immersion

Examples of HMD Google glass, Microsoft Hololens HTC Vive, Samsung Gear VR

Killer applications GAMES: • Pokémon GO in 2016 • Ingress in 2012*

GAMES: Virtual Boy by Nintendo in 1995

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Source: Official website of Ingress and “Profiles in innovation: Virtual & Augmented Reality – Understanding the race for the next computing platform” January, 2016. Goldman Sachs. * Ingress was first launched via Android platform in 2012; and made available for iOS users in 2014. Same as Pokémon GO, Ingress is developed by Niantic and is a location-based game using AR technology.

2. Pokémon GO: The mobile app

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Pokémon GO: What is it about?

WHAT IS IT ABOUT?

• A free-to-play mobile game that one can download either from App store or Google play

• First release date: 6 July, 2016

• Developers: Niantic Labs, an American mobile game developer, in partnership with Google and Nintendo

• Investment amount: US$20 million

• Official launch in the following markets^:

– Asia: Australia, New Zealand, Japan, Hong Kong, Brunei, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam and Taiwan

– Rest of the world: around 35 countries

• Interesting facts:

– Downloaded for over 10 million times in the first seven days*; over 30 million times in first 14 days

– Estimated time spent on the game (min/ day): 43 min (30 July , 2016), which is even more than the time spent on Facebook

Source: Official website of Pokémon GO and App Store ^ For markets that the game is not officially launched, users can change the place of residence for their Apple ID or Google Play account before setting up their own Pokémon account in order to play the game. Otherwise, they can buy an Apple ID or Google Play account from the U.S. or Australia. * It took Candy crush 12 days to reach its 10 millionth times of download

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Screen capture of the iTunes Charts in Hong Kong on 1 August, 2016, i.e. the game has launched for eight days. The game itself topped the “free app” list, and five other Pokémon GO related mobile apps are within the Top 10

Source: iTunes of Apple Store (Hong Kong)

Pokémon GO: How does it work?

HOW DOES IT WORK?

• The game is a location-based AR game. “Trainers” chase various pokémons at “Pokéstops” and battle at “Pokégyms”, which are plotted on a customized version of Google Maps.

Source: Official website of Pokémon GO and “Advertisers set for a piece of ‘Pokémon Go’ action”. 13 July, 2016. Financial Times.

: Choose your own outfit : Customized version of Google Maps : Battle with your rival in the “Pokégyms”

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Pokémon GO: How does it relate to AR?

Source: Official website of Pokémon GO

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HOW DOES IT RELATE TO AR?

• When a pokémon appears, the smartphone will vibrate and the “trainer” can then click on the pokémon.

• Once clicking on the pokémon, the mobile app will direct you to the screen to catch the pokémon.

• If the AR camera is turned on, the pokémon will be displayed with the real world image as the background.

• Left: use of AR camera to catch a pokémon • Right: without using AR camera to catch a pokémon

1. Safety concerns

Some “trainers” are putting their own and others’ safety at risk. Large group of “trainers” gather at

“Pokéstops” or “Pokégyms” in certain locations may pose serious risks to the society.

There are reports of Pokémon GO-fuelled crimes, accidents and mishaps. Examples of these

accidents include car/ motor bike crashes; accidentally went into inappropriate areas such as

Fukushima nuclear exclusion zone and Hiroshima Peace Memorial Park in Japan, and military zone

between South Korea and North Korea, etc.

What are the major concerns? – Safety concerns

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Source: “Pokémon Go players urged not to venture into Fukushima disaster zone”. 26 July, 2016. The Guardian; “Pokémon not welcomed here: Hospital Authority wants game banned from premises”. 28 July, 2016. South China Morning Post and “Supreme Court, Nagoya reservoir seek to be free of ‘Pokémon Go’ characters”. 27 July, 2016. Japan Times.

Source: Apple Daily

A teenager in Hong Kong fell into a river in Taipo while catching pokémons

http://www.hk01.com/%E7%86%B1%E8%

A9%B1/35859/-Pokemon-

GO%E7%86%B1-

%E9%81%8A%E5%8F%B0%E9%83%BD

%E8%A6%81%E6%8D%89%E5%AF%B5

-

5%E4%BB%B6%E4%BA%8B%E8%A6%8

1%E6%B3%A8%E6%84%8F

What are the major concerns? – Safety concerns (Cont’d)

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Japan's National Center for Incident Readiness and Strategy for

Cybersecurity (NISC) issued safety guidelines for game users.

Source: “Japan warns on Pokémon GO safety as impatient gamers await launch”. 21 July, 2016. Reuters and “There's now a betting market on which Australian venue will ban Pokémon GO first”. 13 July, 2016. Business Insider.

Source: Albuquerque Journal

1. Protect personal information 2. Beware of fake and malicious mobile

apps 3. Download weather apps 4. Beware of heatstroke 5. Carry an extra battery 6. Take pictures of your kids if they are

going out alone 7. Do not enter dangerous areas 8. Be careful when you interact with

other players 9. Do not play the game while walking

Nine safety guidelines from NISC of Japan

Source: Business Insider

Warning issued by Justice Department of New South Wales, Australia

To avoid further accidents or mishaps, governments and official authorities have issued guidelines and warnings to game users.

Australia

What are the major concerns? – Safety concerns (Cont’d)

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Singapore Police Force also issued a set of advisory notes to game users.

Source: “Prohibited areas to play Pokémon Go in Taiwan”. 6 August, 2016. The Central News Agency; Facebook page of Singapore Police Force and “Pokémon not welcomed here: Hospital Authority wants game banned from premises”. July 28, 2016. South China Morning Post.

1. Be aware of your personal safety when out looking for

Pokémon. You should play in pairs or as a group to ensure your personal safety.

2. Watch where you are walking, be aware of your surroundings and do not walk out into roads without looking.

3. Do not play the game and drive any vehicle or ride any personal mobility device at the same time. You cannot do both safely.

4. Do not trespass onto restricted areas and private properties. Do not take pictures of restricted areas.

5. Be aware that you are potentially sharing data with others; there could be potential criminals who may seek the opportunity to lure victims to their fake “Pokéstops”.

6. Educate your children to stranger-danger at “Pokéstops”. 7. Never reveal your personal information and watch out for

fake apps or cheat tools. Cyber criminals can access your personal data to commit fraud or hack into your phone with viruses and malware.

8. The Police urge all players to stay safe at all times in your search to "catch 'em all". Please do not endanger your life or personal safety.

Police advisory on Pokémon GO game

Taiwan’s government and authorities have put the following into force:

1. A fine of NT$3,000 – NT$6,000 if playing the game on highways

From the metro management:

1. People are prohibited to play the game on metro’s platforms

2. Those who do not follow the guideline will be fined NT$1,500 – NT$7,500.

In Hong Kong,

1. The Hospital Authority requested the mobile

app developer to remove public hospitals as

“Pokéstops” and also issued a circular to its

staff asking them not to play the game during

working hours.

2. The Hong Kong Police Force, Civil Service

Bureau and the Hospital Authority expect their

staff not to play the game on the premises.

2. Lower productivity Some employees may check on the mobile app from time to time during working hours, this may

affect their work efficiency.

Depending on the company culture, companies such as Hong Kong Magazine let their staff take the afternoon off to catch pokémons; other companies prohibit their staff from playing the game during office hours.

What are the major concerns? – Lower productivity

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Source: “Pokémon not welcomed here: Hospital Authority wants game banned from premises”. 28 July, 2016. South China Morning Post and “Pokémon GO Launches, Productivity and Nintendo Shares Plummet”. 26 July, 2016. Hong Kong Magazine.

Source: Hong Kong Magazine

An internal memo of an anonymous company asking its staff not to play the game during office hour

3. Pokémon GO: Impact on brands and retailers in Asia

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The game has become a smash hit since its launch, and “trainers” are motivated to go out to different

places to catch as many pokémons as possible. This provides tremendous opportunities for brands

and retailers to provide exceptional experience for customers. Many have provided incentives for

customers to drive for traffic as well.

Pokémon GO: How do brands and retailers ride on the wave?

Source: “Advertisers set for a piece of ‘Pokémon Go’ action”. 13 July, 2016. Financial Times; “HK shopping malls get creative to replace lost mainland tourists”. 2 August, 2016. South China Morning Post; and “Pokemania hits Singapore”. 7 August, 2016. Straits Times.

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Source: South China Morning Post

People gathered for the game in the public area of the Olympian City, a shopping mall in Hong Kong

Pokémon GO fans looked for pokémons outside Ion Orchard, a shopping mall in Singapore

Source: Straits Times

1. Becoming “sponsored locations”

Sponsored locations take the form of “Pokéstops” and “Pokégyms”; players are encouraged to visit these locations to collect items and gain experience.

Companies need to pay Niantic to become sponsors of the game in exchange for more foot traffic.

McDonald’s in Japan is the game’s first launch partner, 400 of its 2,900 restaurants are designated as “Pokégyms“ and the other 2,500 restaurants are “Pokéstops”.

How do brands and retailers ride on the wave? – Becoming “sponsored locations”

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Source: “Advertisers set for a piece of ‘Pokémon Go’ action”. 13 July, 2016. Financial Times; “Pokémon Go will soon get ads in the form of sponsored locations”. 13 July, 2016 . Tech Crunch; “Pokémon Go to launch in Japan with sponsored locations”. 21 July, 2016. Retail in Asia; “Japan McDonald’s Shares Hit 15-Year High on Pokémon Tie-Up”. 21 July, 2016. Wall Street Journal; and “Pokémon Go launches in Japan with McDonald's as 1st sponsor”. 22 July, 2016. CBC News.

Source: Asia Times

A man poses with his mobile phone displaying McDonald’s logo on “Pokémon Go” in Tokyo

A “Pokéstop” which is located at one of the McDonald’s outlets in Japan

Source: Brand Eating Source: Brand Eating

A “Pokégym” which is located at one of the McDonald’s outlets in Japan

2. Buying “Lure modules”

Brands and retailers can buy “Lure modules” to attract customer traffic. “Lure modules” can be used in “Pokéstops”.

“Lure modules” can attract pokémons to the “Pokéstops”, and can last for 30 minutes. Companies need to pay around US$1 or 100 pokémon gold coins for one module.

Brands and retailers can directly purchase “Lure modules” via the mobile app, making it easier for them to launch their marketing initiatives in a shorter time.

How do brands and retailers ride on the wave? – Buying “Lure modules”

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Source: “Advertisers set for a piece of ‘Pokémon Go’ action”. 13 July, 2016. Financial Times and “Pokémon Go will soon get ads in the form of sponsored locations”. 13 July, 2016 . Tech Crunch.

A “Pokéstop” with “Lure module”

Examples

Shopping malls: Shopping malls in Hong Kong and Singapore announced that they would be using “Lure modules”. Some examples include The ONE, APM mall, Windsor House in Hong Kong; and ION Orchard in Singapore.

How do brands and retailers ride on the wave? – Buying “Lure modules” (Cont’d)

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Screen capture of the Pokémon GO players in APM mall in Kwun Tong, Hong Kong In the period of 28 – 31 July, 2016 the game led to an increase of 5 - 10 % in customer flow, with restaurants and gaming stores benefitting the most

Source: “Catch them if you can: Hong Kong malls quick to lure Pokémon ... and shoppers”. South China Morning Post. 27 July, 2016; “Pokémon Go drawing mall footfall”. 1 August, 2016. Inside Retail. and “Gotta cash 'em all: Businesses bank on Pokémon Go fever”. 8 August, 2016. Channel News Asia.

Source: South China Morning Post

Two shopping malls in Hong Kong, namely The ONE and Windsor House deploy “Lure modules” from 12nn to 10 pm every Saturday and Sunday in August; and ION Orchard, a shopping mall in Singapore, will have hundreds of “Lure modules” available from now till 21 August, 2016.

How do brands and retailers ride on the wave? – Buying “Lure modules” (Cont’d)

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Source: Facebook page of The ONE and Windsor House

Source: Facebook fan page of The ONE and Windsor House

Advertisements of The ONE and Windsor House

3. Providing incentives to drive customer traffic.

Supermarkets: Korea's discount supermarket chain store E-mart’s Sokcho* branch provided free ice water to “Pokémon GO” players who captured a pokémon on its premises.

How do brands and retailers ride on the wave? – Providing incentives

Source: “Korean retailers ride on ‘Pokémon Go’ craze”. 26 July, 2016. Korea Herald and “Pokémon Go Gamers Flock to Sokcho, South Korea”. 15 July, 2016. Wall Street Journal. 19

Source: Wall Street Journal

Tourists went to Sokcho for the game

Source: Wall Street Journal

A couple went to Sokcho and played the game during grocery shoppping

• Currently, Pokémon GO has not been officially launched in South Korea due to restricted usage of Google Maps in the country for security reasons.

• To play the game, Koreans need to travel to Sokcho, Ulsan and Busan (partial) as Pokémon GO is only available in these three cities.

• Despite this, Koreans are still eager to play the game. They travel all the way from their hometown to these locations. It is reported that sales for many local retailers have increased significantly as a result of the influx of local tourists.

• Mayor of Sokcho even pledged to increase free Wi-Fi hotspots and battery charging stations.

*Pokémon GO in South Korea

Examples

Shopping malls:

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source: “Gotta cash 'em all: Businesses bank on Pokémon Go fever”. 8 August, 2016. Channel News Asia, Facebook page of ION Orchard; and “Breeze Xinyi to launch a Pokémon Go campaign”. 8 August, 2016. China Times. 20

Breeze XinYi, a shopping mall in Taipei, has launched a special Pokémon GO campaign. Customers can redeem 500 members’ points if they can catch 30 pokémons, or 1,000 points for 50 pokémons in Breeze XinYi. This campaign will last till the end of August.

ION Orchard, a shopping mall in Singapore provides two special offers to its customers till 21 August, 2016.

1) Customers can take photos of pokémons with the key landmark of ION Orchard as the background; they can then upload the photos with hashtag #‎IONgraphy. Players will have a chance to receive S$50 vouchers.

2) Customers can redeem a complimentary pearl milk tea after screengrabbing a pokémon captured in the mall.

Source: China times

Source: Facebook page of ION Orchard

Department stores: Yata, a chain department store in Hong Kong, offered Pokémon-related products in a pop-up store in its Shatin outlet from 27 – 29 July, 2016.

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source: Facebook page of Yata

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Source: Facebook page of Yata

Left/ Middle: Shatin outlet of Yata set up a Pokémon-themed pop-up store for three days in July Right: Yata would give its customers a HK$30 coupon if they were able to catch “Farfectch’d”, i.e. the limited edition Pokémon in Asia, in Yata

F&B:

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source:“Our Favourite Pokémon Steals and Deals in Hong Kong”. 26 July, 2016. Sassy Hong Kong and Facebook page of Pacific Coffee

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Source: Facebook page of Pacific coffee

Free upgrade of drinks was available for any Pokémons being caught. The event lasted till 7 August, 2016

The Woods, a bar in Central, Hong Kong, provides complimentary Wi-Fi and wall sockets for ease of phone charging.

Pacific Coffee, a chain coffee shop in Hong Kong provided free upgrade to all handcrafted beverages upon showing any caught pokémon

Pokémon-themed drinks offered by The Woods, a bar in Hong Kong

Source: Word of Mouth Guide Hong Kong

F&B:

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source: “Pokémon-themed Summer Cocktails at Woobar”. Timing unknown. Hong Kong Magazine and “Freebies and player accounts on sale as M’sians take advantage of popular game”. 9 August, 2016. The Star.

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Woo Bar, a bar in W Hotel Hong Kong, offers pokémon-themed summer cocktails. The promotion will last till the end of August.

Source: Word of Mouth Guide Hong Kong

Showcase of the pokémon-themed cocktails from Woo Bar, Hong Kong

myBurgerlab, a chain restaurant in Malaysia offers free drinks to lure Pokémon GO players to their outlets.

Home products:

Indonesian home product chain retailer Ace Hardware offered vouchers to gamers who were able to catch pokémons in their stores nationwide.

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source: “Korean retailers ride on ‘Pokémon Go’ craze”. 26 July, 2016. Retail in Asia; and “Pokémon Go Gamers Flock to Sokcho, South Korea”. 15 July, 2016. Wall Street Journal. 24

Source: Info Kuis Berhadiah

Online retailers:

Grana, an online fashion company based in Hong Kong, lures a pokémon into “The Fitting Room”, its pop-up store located in Sheung Wan.

11st Street, the largest online marketplace in Korea has launched the “11Mon Go” event. Users can find and collect “11Mon” characters while shopping on the website. Those who collect all the characters are eligible for Pokémon GO related prizes including round-trip bus tickets from Seoul to Sokcho.

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source: “Our Favourite Pokémon Steals and Deals in Hong Kong”. 26 July, 2016. Sassy Hong Kong; “Pokémon hangs out at Grana”. 27 July, 2016. Inside Retail and “Korean retailers ride on ‘Pokémon Go’ craze”. 26 July, 2016. Korea Herald.

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Source: Sassy Hong Kong

Hotels:

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source: “Our Favourite Pokémon Steals and Deals in Hong Kong”. 26 July, 2016. Sassy Hong Kong; and “Fullon Hotel offers free tea set for those who can catch 15 pokémons in their hotels”. 8 August, 2016. Setn.

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Haeundae Grand Hotel at Busan of Korea teams up with Pokémon Korea Co. to offer specialized pokémon-themed rooms, merchandise and eateries.

Fullon Hotel, a chain hotel with 15 outlets in Taiwan, provides Pokémon GO related offers. Customers can redeem a free tea set or a NT$500 hotel voucher once they catch 15 pokémons in the hotel with a minimum of NT$1,000 spending at the hotel.

Ovolo Southside in Hong Kong, apart from deploying “Lure modules” every day, also assures its guests that they can snare a wide range of pokémons either in the guest room or in their bar. The promotion will last till 6 September, 2016.

Hotel room with Pikachu and Pokémon-themed cocktails offered in Ovolo Southside

Source: a foodie world

Source: Sassy Hong Kong

Non-retail service providers:

Car hailing services:

How do brands and retailers ride on the wave? – Providing incentives (Cont’d)

Source: “Uber offers free ride to catch Pokémons”. 27 July, 2016. Ezone.com.hk.

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• Apart from brands and retailers, car hailing services providers like Uber and call4van in Hong Kong also provide incentives to attract customers.

• Uber Hong Kong offered “trainers” a free three-hour Uber ride on 30 July if they could catch at least 150 pokémons. To get the offer, “trainers” needed to share the screen shot of the pokémons they had caught to Facebook with hashtag #UberGoHK.

• call4van, another local car hailing mobile app, provides pokémon hunting tour service. Players can choose to pay HK$499 in order to be accompanied by a Pokémon guide during the 90-minute ride and get a free 6GB data sim card and portable charger.

Source: Facebook page of call4van

Pokémon GO related promotional message from call4van, a car hailing mobile app in Hong Kong

4. Pokémon GO:Implications for China retail

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Source: Fung Business Intelligence 29

Pokémon GO: Implications for China retail

Though Pokémon GO is not available in China yet, the game has already spurred discussions among local retail practitioners on the potential impact of new technologies, particularly AR on China’s retail sector.

Motivation to go out from their home to play location-based games

Implications for brick-and-mortar stores

Provide more experiential elements to lure customers

Store refurbishment for AR equipment

Decentralization of retailing: Key shopping areas extend from top tier cities to lower tier cities, and from key business districts to remote area.

Accelerate the development of community stores or other mom-and-pop stores in local neighbourhoods

Increase in-store foot traffic

Market share erosion: May lead to a drop in online sales as more people are shopping in brick-and-mortar stores

E-tailers to think of new initiativesto attract or maintain customertraffic

Implications for e-commerce/ O2O

New O2O practices and marketing initatives that leverage on AR

Implications for general retail

Positive impact on overall retail sales growth

Governmental support on technology development

Pokémon GO: the China version

WHAT IS IT ABOUT?

• A free-to-play mobile game that one can download online

• Name: City Spirit Go (城市精灵)

• Release date: March 2016

• Developer: Shenzhen Tanyu, a local mobile game developer (深圳市探娱互动科学文化有限公司)

• Available country: China

• Interesting facts:

– No. of daily users: 1 million

– Ranked #1 as the most frequently downloaded mobile app in Mainland China

– In contrast with Pokémon GO, AR technology is not being used in the game. This means the “trainer” will collect the “spirts” in a normal game fighting setting

Source: “Pokémon GO becomes City Spirit Go. What’s the difference?”. 14 July, 2016. New Monday; “Why China is probably never getting Pokémon Go?”. 19 July, 2016. Tech in Asia; “China is pushing back against Pokémon GO?”. 26 July, 2016. BBC and “Fake Pokémon Go all the rage in China”. 12 July, 2016. Marketing Interactive.

Pokemon Go: Some Chinese players monoplized certain Pokemon gyms in Japan on its release day Buying

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Screen capture of the iTunes Charts in Mainland China on 1 August, 2016 (ranked #84)

Source: iTunes of Apple Store (China)

Shenzhen Tanyu has developed a local version of the game “City Spirit Go” just a few weeks after the provisional version of Pokémon GO was released in Japan.

Pokémon GO: the China version (Cont’d)

: Virtual map to show the

monsters in different location

: Close-up for monsters

: “Professor Lin”, the coach of

the “trainer” in the game

: Promotional messages in

Apple Store

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Source: New Monday

Source: “Pokémon GO becomes City Spirit Go. What’s the difference?”. 14 July, 2016 . New Monday.

Source: New Monday

Source: New Monday Source: New Monday

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