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The Impact of an Augmented-Reality Game on Local Businesses: A Study of Pokémon Go on Restaurants

Author

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  • Vandith Pamuru

    (Indian School of Business, 500111 Hyderabad, India)

  • Warut Khern-am-nuai

    (Indian School of Business, 500111 Hyderabad, India)

  • Karthik Kannan

    (Indian School of Business, 500111 Hyderabad, India)

Abstract

Pokémon Go, a mobile game that utilizes augmented reality (AR) technology, garnered tremendous public interest upon release with an average of 20 million active daily users. The game combines geospatial elements with gamification practices to incentivize user movement in the physical world. In this study, we examine the potential externalities that such incentives may have on associated businesses. Particularly, we study the impact of Pokémon Go on local restaurants by using online reviews as a proxy for consumer engagement and perception. We treat the release of Pokémon Go as a natural experiment and study the postrelease impact on associated restaurants. We find that restaurants associated with Pokémon Go do indeed enjoy a higher level of consumer engagement and more positive consumer perception. In addition, we find that the characteristics of a restaurant moderate these effects significantly. To the best of our knowledge, our study is the first to examine the economic implications of augmented-reality applications. Therefore, our research lays the foundation for future studies to examine how augmented-reality applications affect consumer economic behavior. Our study also provides insights for business owners and policymakers regarding the potential value of being associated with AR-based applications.

Suggested Citation

  • Vandith Pamuru & Warut Khern-am-nuai & Karthik Kannan, 2021. "The Impact of an Augmented-Reality Game on Local Businesses: A Study of Pokémon Go on Restaurants," Information Systems Research, INFORMS, vol. 32(3), pages 950-966, September.
    • Handle: RePEc:inm:orisre:v:32:y:2021:i:3:p:950-966
    DOI: 10.1287/isre.2021.1004
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    References listed on IDEAS

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    1. Michael Luca, 2011. "Reviews, Reputation, and Revenue: The Case of Yelp.com," Harvard Business School Working Papers 12-016, Harvard Business School, revised Mar 2016.
    2. Xianghua Lu & Sulin Ba & Lihua Huang & Yue Feng, 2013. "Promotional Marketing or Word-of-Mouth? Evidence from Online Restaurant Reviews," Information Systems Research, INFORMS, vol. 24(3), pages 596-612, September.
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    5. Florent Sari, 2020. "Spatial disparities in accessibility to recreational amenities: the case of Pokémon GO," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(2), pages 389-419, April.
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    Cited by:

    1. Muhammad Zia Hydari & Idris Adjerid & Aaron D. Striegel, 2023. "Health Wearables, Gamification, and Healthful Activity," Management Science, INFORMS, vol. 69(7), pages 3920-3938, July.
    2. Yipu Deng & Jinyang Zheng & Warut Khern-am-nuai & Karthik Kannan, 2022. "More than the Quantity: The Value of Editorial Reviews for a User-Generated Content Platform," Management Science, INFORMS, vol. 68(9), pages 6865-6888, September.
    3. Kaichen Zhang & Ohchan Kwon & Hui Xiong, 2023. "The Impact of Generative Artificial Intelligence," Papers 2311.07071, arXiv.org.

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