Online gaming continues to grow exponentially, and Pokémon Go has been among the most popular mobile games since its launch in 2016. Media attention on the game has been immense, with particular focus on two of its key aspects: augmented reality and location-based gaming. The incorporation of new technologies into mobile devices to create enhanced gaming environments has transformed traditional gaming behavior and expectations. By applying activity theory, we determined that context facilitation and intrinsic motivation influence players’ situational engagement in the creation of player value in online gaming. We gathered 479 valid survey responses from experienced Pokémon Go players for use as empirical data to test this study’s hypotheses. The empirical results revealed that 1) context facilitation and intrinsic motivation have direct effects on situational engagement, 2) situational engagement has a direct effect on player value, and 3) situational engagement partially mediates the effects of context facilitation and intrinsic motivation on player value.