Niantic Labs was an oddball startup within Google.

Conceived by John Hanke to promote exercise and an appreciation of public art, Niantic created a location-based game, Ingress, that worked on Android smartphones. Players from two different factions could converge on public spaces and battle for control of them. The game grew and grew, thanks in part to live events where the players gathered to battle each other with smartphones. It grew to millions of players, and that drew the attention of Nintendo.

Nintendo and The Pokémon Company Group announced that they would work with Niantic to create Pokémon Go, a global location-based game where you can go out into the real world and catch Pokémon creatures. It’s a bold plan to marry Niantic’s location technology and massively multiplayer online game engine with the timeless intellectual property of the Pokémon franchise (which has sold more than 21 billion cards since the card game’s debut in 1999. The game is coming in 2016, and that’s just one of the things that Niantic, which is still operating Ingress, has in store.

Now Niantic has spun off as a separate startup, with funding from Google, Nintendo, and The Pokémon Company. It raised $30 million in the process. It has moved into a new headquarters in San Francisco. Niantic has just 41 employees, but it’s hard at work on turning Pokémon Go into a reality.

I sat down John Hanke, chief executive of Niantic, and Mike Quigley, chief marketing officer at Niantic, at the company’s new digs. Here’s an edited transcript of our conversation. They talked a lot about what they learned from Ingress. Hanke also spilled some good details about how multiplayer teams will work in Pokémon Go, Nintendo’s plans for its own Pokémon Go Plus device, and what it was like to work with Satoru Iwata, the former president of Nintendo, before he died from cancer this summer, and the potential for augmented reality games.

Image Credit: Niantic

GamesBeat: We’ve seen you do some interesting deals lately.

John Hanke: Absolutely. We’re super excited to have Nintendo and the Pokémon Company on board. It was a real thrill for me to be on stage with Mr. Miyamoto in Japan when we announced it. It was great to see his enthusiasm for the project. We hosted an announcement for the press in Tokyo. Mr. [Shigeru] Miyamoto came down from Kyoto, and Mr. [Tsunekazu] Ishihara, the CEO of the Pokémon Company. They’re part of the Nintendo family, but it’s an independent company. We also had Mr. [Junichi] Masuda, one of the original programmers for the Game Boy. He’s worked on the project for 20 years, since that first release. They’re having the 20-year anniversary of Pokemon on February 27.

GamesBeat: I’m curious about how that developed, because it’s such an unusual thing for Nintendo to do. They rarely collaborate to this degree with companies in the west.

Hanke: It was driven in large part by Mr. Ishihara and the Pokémon Company. They’ve been involved in developing all the Pokémon games through the years. They guide the IP. But a lot of what they do is through partnerships. They partnered initially with Wizards of the Coast to bring out the Pokémon card game, which has now sold something like 21 billion cards. They have animation partners who do the TV show. They’re a partnering type of company. Mr. Ishihara ushered us into the halls at Nintendo.

The former CEO of Nintendo, Mr. Iwata, had his hand on the wheel. He was steering Nintendo in a new direction. Part of that was the partnership with DeNA, the mobile game company. They have new hardware in the pipeline that they’ve been working on. He saw the need and personally wanted to help evolve Nintendo. They resisted mobile for a long time. But it’s clear their relationships with us and with DeNA that they now understand how relevant it is to the future.

Mr. Ishihara is now a very high-level Ingress player. His wife is an Ingress player. Both of them were higher-level than me when I first met them. It was great to work with a partner that got it from the beginning. They saw Ingress as a perfect match for Pokémon. We were practically finishing each other’s sentences. Ingress, you conquer portals. Pokemon, obviously, you’d go out into the real world and find Pokemon and battle them against other players and trade them and go to gyms. That’s how it’s going to work. Let’s do it.

It wasn’t totally accidental. Google had worked with Pokémon on a Google Maps mashup for April Fool’s three years ago. We had some experience building a mini-product with them. We actually used the same company to do the launch video for Pokémon Go as worked on the April Fool’s video.

Mike Quigley: After an Ingress event in Japan, the Pokémon Company guys went out to dinner and drinks with us. All Mr. Masuda wanted to do was bend our ears and talk about Ingress features. He and John were practically having a game design meeting.

Hanke: He advises us on game design for Pokémon and helps make sure that we keep true to the franchise, the history of all the handheld games they’ve done. They’re so excited about this as a new version of the game that’s never been done before. It’s not like it’s just another rev of the handheld game. This is a Pokémon experience that’s brand new, and yet it goes back to the very origin of the franchise. It’s about a kid who goes out in the world and finds Pokémon. If you strip away a lot of the complexity and stuff that’s been added on, it’s the most basic expression of that concept.

Image Credit: Nintendo

GamesBeat: I’m curious about what you think of mapping Pokémon onto this engine where location is such a big advantage. Location can also be a challenge or disadvantage in some other ways, though. In some past location-based games, if there’s not enough players in an area, they’re not really socially connected. If you have to travel very far to find something, is it really worth doing?

Hanke: We’ve learned a lot on those fronts with Ingress. Even if you’re in a small town — I grew up in a town of 1,000 people in Texas. We had that as a design goal. If we’re going to build a game that works with location, it has to be fun for people anywhere to play, in small towns as well as San Francisco. If we designed something that only worked in San Francisco, it wouldn’t be a real success. We wanted it to work globally.

You do things like enabling asynchronous play. If someone passes through that town on a trip to somewhere else, they interact with the locations there. That makes the place feel alive, even if you didn’t match with them head-to-head. The linking game in Ingress, where you link from one city to another to form big fields, means that what people might be doing in very small, remote locations is still critical to the global game. We’ll find that a town in rural Mississippi all of a sudden has a global spotlight on it because it’s an anchor for one of these big fields.

There’s an incentive for teams to find obscure places to anchor their portals, in fact. There are fewer attackers on the other team to take them out. It’s a defense, like security through obscurity. You try to grab something that’s far away from everywhere else. That means, at that point in time, that people playing in that area all of a sudden are on the global stage.

This idea of moving keys around — you get a key from a portal. You need the key to make a link. People are ferrying these around like they’re muling drugs. They’re transporting them from person to person. That means, if you want to get them from New York to San Francisco, they may transit several places in between. It stitches the whole world together into the global game.

I feel like we’ve learned a lot of lessons from Ingress that we’ll bring to Pokémon. We’ll make sure you can play it everywhere.

Image Credit: Niantic

GamesBeat: How do you plan to handle the distribution of different items and things in the game?

Hanke: Our goal is to make it so you can walk out of the house and within five minutes, you can find Pokémon. It may not be the most rare Pokémon in the world, but there’ll be a population of Pokémon living near all our players. Gyms will be a bit more rare. You want to find gyms so you can level up your Pokémon and battle there, so it will take a little more effort to get there.

Pokémon will live in different parts of the world depending on what type of Pokémon they are. Water Pokémon will live near the water. It may be that certain Pokémon will only exist in certain parts of the world. Very rare Pokémon may exist in very few places. But you can trade. If you live in a place with lots of water Pokémon and you come to an event — we have these Ingress events that are getting bigger and bigger. We’ll have our biggest weekend ever on Saturday.

We’ll have events for Pokémon as well. Those are competitive, but they can also be places to trade stuff with other players. Pokémon trading is going to be huge. You can’t get all of them by yourself. If you want all of them you’ll have to trade with other players. Or you have to be someone who takes time off work and travels the world for a year. There may be people who do that.

GamesBeat: Would you encourage any crossover between Ingress and Pokémon? Can you be playing both games at the same locations?

Hanke: I know people will be flipping back and forth between the two. Our Ingress audience — we see people who’ve proven to have an interest in location gaming as a part of the target audience. But obviously we think the Pokémon audience is much bigger than that.

This is the first time there will be a real Pokémon experience on a mobile phone. You know the numbers as far as the installed base of the DS market and the 3DS market. Compare it to the installed base for smartphones worldwide. Now Pokémon is available to, what, 100 times more people in terms of market potential?

And there are markets where they don’t even sell Nintendo hardware, because the price point and distribution doesn’t work out – India, for example, or Brazil – but there’s surging smartphone usage. We see Ingress players in India, Brazil, Sri Lanka, Malaysia. Pokémon may be known through the animation or the cards, but people haven’t had the chance to play the games before. They’ll be able to play the games for the first time. It builds on Ingress, but it’s a much bigger opportunity.

Image Credit: Niantic

GamesBeat: Nintendo also wants to do their own unique device, right?

Hanke: The Pokémon Go Plus, yeah.

GamesBeat: At the same time they’re racing into mobile, they have their own dedicated hardware.

Hanke: It’s a nice way to take a step in the mobile ecosystem for them. That came out of two influences. One was a learning from Ingress. We wanted to give people a way to play the game where you didn’t necessarily have to take your phone out and interact with the UX. Part of the idea of the game is, you’re outside and you can see beautiful things. If you’re always staring at your phone, you’re not seeing the world around you.

We had brainstormed this idea. Why not have a little device that buzzes when you’re near something important? You can interact with it in some subtle way, and then later on you can open up your app or your tablet and you see, “Oh, I got this or did that.” That was one of the influences.

The other was, imagine that a parent is playing with a kid and they want to give the kid a device to interact with rather than handing over the phone. I’m often handing my phone to my kid, because he’s bored or whatever. But the idea is you can give them the Pokémon Go Plus device. It vibrates and flashes when you’re near Pokémon. When they press a button in a certain sequence they capture it. Then, later on, you can look at it together on your phone or tablet.

GamesBeat: The functionality is pretty much the same as you’d do with your phone?

Hanke: It’s more limited, but it’s heads-up gameplay. I can show you the design prototype. It’s very slightly bigger, a bit heavier, but this is pretty much the size of it. It comes with a bracelet so you can wear it like a wrist device. It’s Fitbit-ish in terms of size. Battery lasts a long time. You don’t have to worry about charging all the time. This is a multicolor LED and button. You’ll notice that it’s the Google Map pen with the Pokeball shape and color fused together. You can imagine kids going to school with this on their backpack.

GamesBeat: Can you talk about your options as far as how to structure this and set it up? Why not continue to exist inside Google? Why go down this particular road?

Hanke: Partly it allows us to do something like this with Nintendo and Pokémon, where they can invest and be a co-owner of the company and feel like they have a very tight relationship. They’re putting the number two video game franchise of all time in the hands of this project. It would be more difficult to do if they didn’t at least own a portion of the company. They feel like there’s a good alignment of interest.

If you look at Google overall — we ended up experimenting with different things, but at the end of the day we focused on a pretty specific strategy around building these real-world entertainment experiences. There are some synergies with Google, but they’re only in certain areas. It makes sense to do it as a separate company. We’re going here. Google is going there. Various other parts of Google have their own specific targets. I think you’ll see more of this in the future, where some of those projects become more independent. They need to have close partnerships or additional capital or whatever with people in specific industries in order to fully realize their vision.

Image Credit: Niantic

GamesBeat: You guys weren’t really—I guess you were not capital-starved. Google has all the money in the world. Did the need to invest more money really come from this project?

Hanke: Yeah, we had all the capital we needed. That wasn’t the issue. It was really—In addition to money relationships, IP partnerships, experience in marketing video games—There’s a bunch of stuff that Google wasn’t inherently deep in. We’re lucky that almost by chance, Mike ended up with Google. He did have 10 years of experience in video game marketing. But as a company it’s not something we had a huge competence in.

Quigley: It’s a nice signal, too, that Google put in new money. They already have an ownership stake because of everything they invested in us for three and a half years before we spun out. Of course we have all that code base that’s with us now independently. But that’s hopefully, to an outside observer, a sign of the continued support we have from Google.

GamesBeat: Moving here, is that part of being independent as well?

Hanke: We didn’t go far from the nest. We’re a five-minute walk away. But it means a lot to us to be outside of the Google mothership. It’s our space.

Image Credit: Niantic

GamesBeat: How many people are here now?

Hanke: We’re 41 people.

GamesBeat: Still pretty small for what you’ve set yourselves up to do.

Quigley: One thing I’d add to your points about Pokémon Company and Nintendo — for two and a half years, the platform aspiration has been front and center. John’s talked about it a lot at DICE and other places. They’re fully aware and supportive of that. It’s not just a dev for hire thing. They know where we’re going. They know what true north is. This is ultimately about the platform and enabling lots of other games to do this. To me that’s good. It’s what we wanted to do on day one.

GamesBeat: I know you guys aren’t restricted by the investment, but now it seems like a lot of different kinds of games could work on top of this engine.

Hanke: Part of what we’re trying to do is show people that breadth of gameplay styles and genres you can fit into this real-world gaming category. Ingress is one data point. Pokémon is a data point. There will be some other interesting ones as well. It’s been fun to watch the phone ring after the Pokémon announcement.

GamesBeat: Now you get a real test of what it can do with a gigantic brand associated with it.

Hanke: Absolutely. People are already familiar with certain aspects of the game. With Ingress, thankfully, we were able to launch it from within Google. It’s a pretty tall order. We were using a brand-new fiction and a brand-new style of gameplay. We started from scratch. It’s a lot to educate people about with games like this, just like any other new platform. VR has the same challenges. What does it mean to make a game for this kind of device or experience? How is it different from things that have come before? The consumer education process takes some time and effort.

GamesBeat: The theme of our next conference is “David and Goliath.” I’ve been asking people, to what degree do you feel like either one? That was the thing about the Malcolm Gladwell book I just read, that advantages are disadvantages and vice versa. Everyone is both David and Goliath in some way.

Hanke: It’s always more fun to be David. I’ve always identified as David personally, as an entrepreneur. It’s more fun to be the underdog and try to surprise people and do something unexpected as the path to success, versus just pounding away as Goliath. At the same time, coming out of Google — in terms of our expertise with location and maps and things like that, people may perceive us as a bit of a Goliath. We have a lot of experience in that area.

We feel good about our competence there relative to other people who might be interested in the space. Maybe there’s a bit of both. But for the time being we’re coming into the industry that something I think will be disruptive. We’re throwing our stone.

GamesBeat: Do you think that there will be more entrants into this location-based MMO space?

Hanke: There will be, for sure. We know there are companies out there building games to emulate Ingress, and there will be companies building games to emulate Pokémon Go. There will be companies building original games in the category. The ones we’re seeing now are pretty straight knockoffs of Ingress, and I’m sure Go will have its knockoffs as well. But there will also be people bringing new ideas to the table.

We’re one influence there. We have Magic Leap and Microsoft and HTC and other companies all doing augmented reality devices. We don’t need AR devices for our game, but they would make our style of game even more exciting. As they come into the market they’ll need launch games that showcase what their hardware can do, why playing a game on HoloLens or Magic Leap is more, better, different than traditional games. As those companies start understanding what it means to build an AR game, they’ll realize that a lot of what we’ve done with Ingress and Pokémon Go has the elements that showcase why those kinds of hardware experiences are going to be different and better.

Maybe we’ll partner with some people to make some of those. Maybe they’ll do their own. My point is, you have a lot of people making big bets on augmented reality. They’ll focus a lot of money and energy on the sector.

GamesBeat: How long do you think the sector will take to get going and have a successful device? What challenges will they have to overcome?

Hanke: To some extent we’ve already had some initial entrants. Google came out with Google Glass. It looked awesome in the lab. It hit some massive roadblocks in terms of what it could really do, functionally, as well as the consumer reception of it. Which I think was tied to a lack of clarity about what it could really do and what it does well. Google learned from that, as did everybody else in the industry watching that unfold.

Magic Leap is coming. Microsoft is there. HTC is going to build AR. I’ve seen some interesting stuff from other companies. It’s really hard to predict exactly how long it’s going to take. I think it’s more like four to five years than two to three. But I don’t think it’s 10.

Image Credit: Niantic

GamesBeat: Are there certain things that get much better with something like Ingress once it does arrive? You don’t have to look down at your phone all the time.

Hanke: Yeah, you get your head out of the phone and hopefully take in more of what’s around you. You’ll get some more interesting visuals. That will be novel for people. It’ll be exciting. Ingress will be enhanced greatly when those devices come to market, as will Pokémon Go and other games we make. It’s going to elevate.

The game is what’s important, though. We’ve seen this with platforms throughout the history of video games. It’s about what’s fun in the game and creating new and fun game experiences. The hardware enables that, but it’s not about the hardware. It’s about the experience enabled through it. It’s understanding, for any piece of hardware, what it does that the hardware before it couldn’t, and how you make a game that takes advantage of that.

That’s what we’re focused on. We’re trying to anticipate that and make sure we’re on a solid footing, make sure we’re writing our games for the smartphones that exist today, but absolutely being ready to take advantage of new hardware in the future.

The cool thing about it being an MMO environment — EVE would be another example — is that the game is this game state that exists on the server. Today millions of people are interacting with Ingress. Tens of millions of people will interact with Pokémon Go. You can have differentiated client experiences that interface into that same game world. If 100 people have Magic Leap devices, they can play in the game with 5 million people on smartphones. They’ll have a different experience, one that’s maybe better in ways, but you don’t have to wait until 5 million people have Magic Leap to let them have this fun, social, real world game experience.

We can plug in an enhanced client experience. You can play on iPhone. You can play on Android. You can play on Magic Leap. Maybe you can play on some other cool VR device from some other manufacturer. We look at that client hardware as — we’ll make the best experience possible for that, but the game itself is this interaction between people that’s already there. There are going to be these great social networks and fun events.

It’s not like we’ll have that ramp up at the beginning of a hardware cycle where only so many people have the device and it’s hard to get critical mass. That’s not a big problem here. It can ramp up slowly. If early devices are expensive and not many people buy the first wave, that’s okay for us. We can have a version of our game that works for them and they’ll be playing with everyone else who’s on their phones and more common devices.

GamesBeat: Ingress has all these interesting social goals, like getting people to visit and understand public monuments or get more exercise outside. Does Pokémon Go share some of those?

Hanke: Those are core to everything we do. The places that you’ll interact with in the real world — historical sites, artwork, prominent or special local businesses, those will play a role in Pokémon Go just as they would for us. That same mechanic of encouraging people to take a walk in the park and see some aspect of their city they haven’t seen before, to go explore a nook or cranny in a part of the city they haven’t been to before so they can get a new Pokémon, that will be at work. Measuring how far people have walked and all of that will have specific payoffs for players in Pokémon Go.

Quigley: I would say those are more Niantic values than Ingress values. Those are things John has always championed.

Hanke: It’s what makes what we do worthwhile. It has this awesome effect on people. That benefit creates this appreciation amongst our players that is the reason we have this incredible global community. It’ll help us grow a similar community for Pokémon Go. People feel better. They meet other people and have fun together. It’s great thing to build a business around.

Our Kyoto event in March was our biggest ever single event at the time. It was a stretch for us to have it in Kyoto because we’d previously done everything in Tokyo, where something like 25 percent of the Japanese population lives. But this weekend we’re doing it in Okinawa. It’s December, it’s kind of cold. We weren’t sure how many people would go, but we’ve sold more than 6,000 tickets at this point. It’s going to be one of our biggest events by itself. We’re having a sister event in Milan and one here Oakland, which will be one of our biggest events in America.

Quigley: Okinawa is more than 6,000. Milan is more than 4,500. We’ll go beyond 3,000 in Oakland. And these are just our primary cities in November and December. We also do remote cities, where we find local volunteers that come and help us. Those are some of those other events you saw there.

This quarter alone, as of a week ago, we have more than 40,000 people joining us over a series of 27 cities in October, November, and December. In Q2 we started selling different ticket packages. You get different types of cards and swag and different things, which the community really appreciates. A lot of that is sold out, which is good for us. IAP will be the primary monetization arm for us, but it’s nice that we can get these events to be self-sustaining as well. We have our ARG elements, the overlays with our characters, which will be on site at these events as well.

Even though these numbers are a week old, you can see the cross-section of towns we’ll be in. All of these will be in the thousand range or higher at minimum. We get about a 25 percent lift in RSVPs in the final week. I’ve never worked on a game that’s had the global appeal of Ingress. Our top three markets are the U.S., Japan, and Germany.

Image Credit: Niantic

GamesBeat: Are the live events something you’d do right off the bat with Pokémon?

Hanke: We haven’t announced yet, but I’d say that given the success we’ve had with Ingress, it’s a pretty safe bet.

GamesBeat: What about the one side versus the other that’s central to Ingress? How do you create a similar enthusiasm in Pokémon?

Hanke: There will be teams to join in Pokémon, more than two. Those teams will compete against one another.

GamesBeat: The sort of thing that exists within the fiction already.

Hanke: Yeah, with different gyms and teams and trainers.

GamesBeat: What about directed story versus user-created story?

Hanke: Hmm. Nothing to say about that presently.

GamesBeat: That’s something going on somewhat in Ingress already, although it’s still more directed.

Hanke: It’s directed in that there is a fiction, a story we tell in every quarter as part of the event series. The players shape the direction that fiction goes. We follow along behind by canonizing parts of that in the books and comics and so on. I would expect there to be a narrative along with Pokémon, but some of that stuff we’re still working out.

Image Credit: Niantic

GamesBeat: Do you feel like this is almost an eSport?

Hanke: It’s even better than a sport in some ways. League of Legends, you have your big tournament and everyone shows up at the Staples Center and you watch the high-powered teams play each other. When we bring 6,000 people together in Okinawa, every one of them is playing. It’s different from 6,000 people coming to watch a soccer game. It’s a mass game.

Everyone is a player. It’s more participatory. I think of it as more like a 5K run, something like that. Everybody comes to a 5K. It’s accessible. Everyone participates. There’s a bit of a competitive element to it. But there’s not a decision between the players and watchers, between the elite and everyone else. It’s a team thing. Whenever you show up as part of a team, you get assigned to a squad. You’ll have orders about where to go and what to do. Everybody strives to beat the other team.

It’s awesome to see in person, if you ever have a chance to make it out to one of the events. They have chat going on. You have earpieces for the squad leaders. There’s almost a military feel to it, but at the same time people are smiling and laughing and enjoying being outside. It doesn’t have that — I read recently about two guys getting in a fight at an eSports event in Europe. Ingress doesn’t have that. At the end everyone’s together and it’s one big party.

It’s competitive, but I think the fact that it’s fighting over portals — I’m not fighting to kill you. That makes this a little different. But I do think eSports — that whole concept has huge legs. Sports have legs. People like to play games and the best opponent is another human being, not an AI. Sometimes you may want to immerse yourself in a narrative, solo-play, adventure kind of game. Those can be cool. But competition against other humans, facilitated by computers that let us do things we can’t with just a bat and a ball — it’s absolutely the future.

Quigley: We do a lot of original programming on our YouTube channel. Ingress Report is our ongoing show, but we’ve done documentary-style things as well, like Ingress Obsessed. Episode three in particular is really good. It brings to life what you’re talking about. We have an embedded reporter and crew following these guys and what they’re trying to achieve. You put that on the scale of 6,000 people in Okinawa — it’ll help bring to life what John’s talking about.

Hanke: You look at the amount of money people invest in Ingress today. I was reading on social media today about a woman in Atlanta who’s getting on a plane to fly to Milan. At our event in Kyoto there were people from Hong Kong, Thailand, mainland China, the Philippines. People had flown in from the United States. Loads of people will get on planes to come to these events. I’ve heard Ingress players say that this isn’t a game. It’s a lifestyle. Once people get into the social aspect of it, they make a big commitment.

GamesBeat: Do you guys see a particular path to becoming something like World of Warcraft? I see no limit on how big this could get, beyond the number of devices out there.

Hanke: I think we can be bigger than World of Warcraft. There are more mobile devices than gaming-configured PCs out there.

GamesBeat: It almost still seems like kind of a secret, though. A secret society or whatever.

Hanke: So did EverQuest in the early days, or Ultima Online, before we eventually got more widespread awareness of a new category, which is what we are. That’s fine with me. I don’t mind continuing to tell the story and invite people to play the game, and in particular to plug in to our community and see the events.

Quigley: We’re more on a crusade or a mission than we are — I’m not spending my time trying to beat everyone else out on paid user acquisition. We do these events because we’re trying to build a genre from the ground up. It takes a much more hand-crafted, thoughtful approach.

Hanke: The awareness curve of what we’re doing is maybe similar to free-to-play. I don’t know if you can project your mind back a few years ago to when there was this thing going on in Korea — you don’t buy the game, but you buy stuff in the game? It wasn’t mainstream at all. It was this thing they did over in Asia.

The awareness of Ingress in Japan is huge. This award here is from the Tokyo Game Show. It’s the designer’s grand prize. There are two grand prizes awarded at the Tokyo Game Show. This one is voted on by everyone in the industry. They picked Ingress as the winner for this year.

We’ve had a number of very large companies come to us and say, “We want to work with you to build a game on your engine.” Our awareness is higher in Japan in terms of the industry, but that’s changing now after the announcement. As I mentioned, we’ve gotten some interesting phone calls from over here as well.

Image Credit: Niantic/Nintendo

Quigley: I remember flashing something to John Riccitiello and Frank Gibeau in the mid-2000s. “Guys, we’re seeing from our user feedback in our quarterly surveys, this free-to-play thing is mainly happening in the open web with browser-based stuff—It’s not eating into the discretionary income of our users, so we’re okay there, but discretionary time is a red flag. People are starting to spend more time on these free-to-play MMOs.” That was 2006 or 2007. Fast forward and it started to dig into people’s basket of discretionary funds for gaming, and then you get to where we are today. It’s a good analogy. The way we’re growing is in a good, responsible way.

Hanke: I look at Dungeons & Dragons, Magic the Gathering, the early MMOs. I worked on Meridian 59 back in 1994, one of the first 3D MMOs. I remember people saying, “I’d never play an RPG like that. It’s all about the story and quests. If you’re playing an MMO a narrative just doesn’t work.” You can see the appeal once you see it, but it takes some time for people to become aware of it.

If you remember the first time you went into an MMO and walked up to another avatar — I remember my experience with Meridian in the development phase. Another user would walk up and you could wave to them or change your facial expression. “Wow. It’s another person in this world.” Then you’d play for a while and see it get dark, see that there’s a time cycle going on. There’s always something happening. It just took people a while to catch up to that concept.

Quigley: I remember giving Bing a little grief. We were doing a presentation where he was talking about Ultima Online, calling it the first MMORPG. I didn’t do this publicly because I’m not going to do that to Bing. He’d take my head off. But I pulled him aside and said, “The first MMORPG was actually Meridian 59. I beta-tested it in business school with my classmate, John Hanke. I’m just telling you.”

Hanke: Lesson learned. We were coming at it as a startup, completely David versus Goliath. An unknown brand, an unknown franchise, no marketing apparatus or whatever. 3DO bought us before we launched. Trip loved it. He’s always been a visionary. He got it. But then EA came in with the Ultima franchise, which everybody knew and loved. They took the single-player experience and turned it into an MMO. So we learned our lesson. We’ve got Pokémon.