Location-based Gaming: The Next Big Payday?

With the proliferation of mobile devices that come standard with location-aware and social features, it’s not surprising that game makers would embrace new technologies to provide gamers with experiences that leverage those abilities. A number of startups are trying to stay ahead of the game in social/local/mobile gaming; here are a few of the ones who appear to be doing it best so far.

Massive Damage’s Please Stay Calm is a zombie survival story that pits players against hordes of the undead, all from the devices they carry around in their pockets. The iPhone-only title launched in October of 2011, and the team is currently hard at work on an update that will allow large groups of players to battle one another for control of real world global landmarks. The company is also working on a web-based graphic novel to leverage the IP it created for the game.

Massive Damage CEO Ken Seto said in an interview that Please Stay Calm has been doing well since its debut. “Since launch, we’ve had 650K downloads, 2.4 million unique locations [where players checked in], 16 million checkins, and 17.3 million zombies destroyed,” he said. “On an average day, our players spend 53 percent more time playing our game than the industry average and they play 68 percent more frequently than the industry average [referring to time spent playing social games on iOS].”

Seto said that despite the fact that Please Stay Calm employs both mobile and location-aware technologies, the majority of players still play mostly from stationary places. “The majority of our users play from stationary environments like their office,” he told us. “I believe this is a use case or trend that is not going to change so you have to shape the location-based gameplay around that conceit, especially if you want to expand beyond a very small niche group of people willing to travel around to play a game.” Rather than providing motivation to play on the run, Seto says location offers “an emotional link from the game world to the real world,” but also says the team tried to make sure “location did not get in the way of fun gameplay or social elements.”

Another zombie-themed game focuses much more on the location features of mobile devices, and less on the social aspect.Zombies, Run! is a Kickstarter-funded app that raised $73,000 from the crowdsourced financing site. It debuted on the iOS App Store on Monday, and combines the zombie survival genre with a fitness-motivation game that uses the iPhone’s GPS data to measure speed and distance while a player runs. The running is then tied to a zombie survival story – runners are characters in the game, getting medical supplies and other resources while avoiding virtual zombies during their workout.

For Adrian Hon and game co-creator and writer Naomi Alderman, the use of mobile technologies isn’t about limiting the experience, but about broadening it. The game doesn’t actually tie to a specific real-world location — it just uses that data to map activities in the virtual world.  “It might seem like this makes the game less immersive and attractive,” Hon said in an interview. “But the opposite is true. By giving players a great experience wherever they are in the world – a city, a town, the countryside – we can reach more people.”

The goal for Zombies, Run! is to introduce more social features, including multiplayer modes, as well as a certain level of location-awareness, but even in its current state Hon is excited about their early progress. “We’ve had fantastic reviews, so we think it’s been received very well,” Hon said. “Since our launch Monday, we’ve been in the 20 Top grossing apps worldwide, competing toe-to-toe with the likes of Zynga.”

One of the earliest hits in location-based gaming and a title that continues to grow through global expansion is Shadow Cities, from Finland-based Grey Area. BetaKit talked to Grey Area co-founder and CEO Ville Vesterinen about the game, which pits players against each other in virtual, magic-based battles in cities around the globe.

“In playing location-based games people get a shared feeling of familiar context, which gives the gamers a common discussion point to socialize over,” Vesterinen said about what modern mobile tech brings to gaming. “This is a very strong driver in making our gamers more social and helps us build around our gamers, not around our content pipeline.”

Vesterinen also echoed what Seto noted about players tending to stick close to home even with location-aware gaming titles. “People play location-based games, just as other mobile games, mostly at homes and offices, but that does not mean location is not very relevant in the game,” he said. “Actually the opposite is true. Where one lives and works are very important to people and build into part of one’s identity.”

With $2.5 million in funding and what Vesterinen calls a “comfortable revenue stream” from Shadow Cities, the company is looking to expand beyond the 40 countries where it’s currently available, and is also working on a second Grey Area game which Vesterinen said “will again redefine what is possible in mobile gaming.”

One last company we spoke to is taking a different approach, by applying gaming mechanics in a much broader way. Quest.li is a new Russian startup which recently opened offices in San Francisco that aims to make a game out of virtually anything, via both mobile apps for iOS and Android and a browser-based client. Anyone can post a quest to Quest.li, which could be something as simple as answering a single trivia question, or as elaborate as sending people on a multi-stage scavenger hunt through a specific city or neighborhood.

“We do bring gaming mechanics into the real world, but it’s a result of developing interactions in the real world,” CEO and co-founder Danil Kozyatnikov said in an interview. “[Gaming just happens to be] the easiest and the most fun way to do that right now.” He said that what Quest.li is really about is creating “adventures” for groups of friends.

One important aspect of how those adventures work brings to mind the simple concept of a shared office pool. “You can play quests alone, or with other people. If you play with others, everyone gets the quest at the same time, and the first to complete the goal wins,” Kozyatnikov told me. “People can actually chip in real money at the beginning, so a quest might require players to chip in $10 to join. When they do so, at the end of a quest the person who wins gets 70 percent of the total, and creators of the quests get an and additional 15 percent.” Kozyatnikov said it’s a little like eBay, in that people who come up with good products (e.g., quests) stand to reap greater rewards through that 15 percent take they get when other players buy in to their game. Quest.li makes revenue by taking the remaining cut.

Because a lot of Quest.li’s quests involve going to real-world locations to uncover clues or answers, it makes sense to think of it like geocaching, but more competitive and with higher stakes. Even aside from that aspect, however, Quest.li holds a lot of appeal as a direct marketing tool for brands. Businesses could create quests that encourage players to learn more about their products and offerings, for instance, and then answer questions in exchange for rewards.

The same technology that enables the games listed above to take advantage of location information also has its downsides, however, including how much data it uses, which can end up causing big bills for users. Figuring out more efficient ways to handle data will be a priority both for game developers and for handset makers, and the motivation is definitely there to find alternate ways of offloading data costs for end-users.

Games that incorporate social, local and mobile features are only just beginning to emerge, and there’s already an interesting mix of approaches from companies trying to win big in that space. No Instagram-style juggernaut has yet to emerge, however, but as the technologies required for these experiences to work properly continue to be more widely used thanks to the rise of smartphone ownership, the likelihood of someone hitting it really big in this new frontier of gaming grows.

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