We all saw it coming as soon as the iPhone came out.  It took a few years, but finally Foursquare and Gowalla have proved the viability of location-based gaming. Location-based gaming is going to prove be a great leap in both augmented reality and computer-facilitated interaction: it will reveal peer-to-peer recommendations and histories of local to-dos and hotspots and it will open up the possibility of interactions with total strangers but with profoundly new ways to contextualize and streamline those previously awkward interactions.

“I see we go to a lot of the same places, single, cute stranger with similar music taste to me.  It says my best friend recommends the ice-cream parlor around the corner, want to go?”

- Sample Pick Up Line using Location-Based Gaming

Imagine a lot of situations like this, where you can know both who you probably know and who you probably want to know at any event, and you can explore the histories of your friends experiences in the location you now find yourself in.

We will see some interesting possibilities for location-based gaming over the next five years.  Imagine if attendance could actually be taken via location-based gaming, and there were incentives for participating in events that had correlations to retention, like welcome weekends and activities fairs.  Imagine the analytics possibilities if you had students voluntarily checking in when the entered and left the library, or if they checked in when they stopped by professor office hours…..

Educational institutions are beginning to harness them through products like SCVNGR to operate scavenger hunts.  Also, colleges and universities have started to set up featured trips using the Gowalla iPhone application.

(If you have a second, you can take this fun YouTube video quiz to learn more about the schools that have a featured trip.)

Foursquare is a point-based game.  You get points for “checking-in” in locations, more points for checking in new places, for checking in with multiple people, and for checking in more places at greater frequency.  The idea is that you’re in some sort of vague competition with your friends or others in your locale for exploratory dominance.  If you check in to a place more frequently than anyone else, you become the “Mayor,” which seems silly but who wouldn’t want to be “Mayor” of their favorite lunch spot?

Foursquare augments reality by showing you local “tips” left by your friends. Dennis Crowley, the founder of Dodgeball (acquired by Google in 2005), is behind Foursquare.

Gowalla is a virtual-object-based game.  You discover random virtual objects and hold on to them.  If you treasure them you can put them in a vault.  You can drop objects to get more recognition at certain locations.  The virtual objects and great iconography of Gowalla makes it a pleasure to use and the best way to broadcast your location on Facebook.

Gowalla augments reality by showing you “trips” left by others.

Alamofire was working on the famous Facebook game Packrat before pursuing Gowalla.

I (@mpstaton) use both everywhere I go and I’m interested in how they move the product forward to augment reality and facilitate interaction with strangers. I’m also interested in how they will monetize the products, particularly how effective they are in tying themselves to local promotions and coupons.

SCVNGR is the early leader in enterprise-focused scavenger hunts.  You can read about them on Techcrunch here and go to their website.

*Full disclosure, we share investors with Alamofire through Founders Fund.