Location-Aware Games Are Engaging Consumers — And Marketers

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According to a new research by businessdegree.net, more than $12 billion was generated by mobile gaming in 2011 with 34% of the top grossing apps in the app store leveraging a freemium model.  Once someone is hooked, they’ll continue to spend a few dollars to continue to enhance their play. On average freemium games make $12.92 a month per user. This type of behavior is what is making the business of games so profitable.

Now marketers are jumping on board by advertising with the big players. Rovio‘s Angry Birds makes $6 million per month from ads alone. The next step could be more brands teaming up with game developers to create popular mobile games. Not only could it make a tidy profit, but it will get more eyes on its product.

Not long ago, Rovio added location-based integration to enhance game play for users when they visit real-world locations. The feature, called Magic Places, builds off a previously announced near-field-communication feature for certain Nokia phones, allowing a very limited number of users to unlock additional levels when they tap two NFC phones together or tap an NFC tag at a location.

With Magic Places, when users arrive at a location with GPS-enabled smartphones, they are able to trigger new content such as Mighty Eagle, the most powerful character in the game, as well as a raft of never-before-released game content.Users are then further able to compete with other players on a localized leaderboard for each venue. Stepping back, Rovio is looking to turn Magic into a broad platform that will be built into all of its products, spurring real world interactivity through NFC, GPS, and other technologies.

In a recent interview, a product manager for Angry Birds Magic, Ramine Darabiha, said “the idea for Magic Places is to build more fun into the game, turning what is often an activity played in isolation into something you do in the real world. He said Rovio is not interested in turning every location into a “Magic” venue, but is looking to use the location option selectively to enhance game play for users. The key is to find places that complement the game and make the experience more memorable for users.

One retail brand already taking advantage of Magic Places is Barnes and Noble.  Last summer the company announced that you could take your Nook Color into a physical Barnes & Noble store and use the Mighty Eagle for free to clear levels in Angry Birds. The Angry Birds Nook app costs $2.99, but there is no cost for using the Mighty Eagle in stores.

This kind of partnership can become a great method for retailers to drive additional foot traffic and sales, while at the same time helping gaming companies that rely on in-app purchases to grow their revenues through retailer subsidy.

Two weeks ago, the NFL’s Philadelphia Eagles got into the game by also partnering with Rovio. The Wall Street Journal reported that an Eagles-themed spinoff of the game is in the works, and that we can also expect to see many of the game’s explosive birds appearing on the scoreboards at Lincoln Financial Field after Philadelphia sacks, touchdowns and the like.

And even Starbucks customers playing Angry Birds on their smartphones could soon get access to free content and see their high scores reflected on an electronic leader board, if a reported partnership comes through in the next couple of months.

Starbucks has ramped up its in-store digital offerings recently, looking to make use of its WiFi network and customers’ increasing use of digital devices. The coffee retailer has long offered a free song download with a beverage purchase, but recently has started to offer free apps, book excerpts and maybe even TV shows and mobile games.

The concept however, isn’t limited to Rovio and just big brand retailers.  A new startup called Kiip recognizes that people hate ads but like free stuff. It’s a concept that has fuelled enough growth that it now requires a digital wallet for users to keep track of all the offers on the network

Essentially, Kiip says that when you perform well in mobile game or app, you can be rewarded with a free coffee or a music download or whatever makes sense.  Best of all Kiip doesn’t build their own games or apps; they simply layer their platform on top of others, helping to monetize them.

Apps like MapMyRun, HomeRun, and MegaJump have already started using it.  This means that any developer and any brand (big or small) can get on board with mobile gaming and rewards that drive business.

It’s clear that the relationship between the worlds of mobile gaming and bricks and motor retail is just beginning — but what a fun and exciting way to engage new customers in the things they’re already doing!

Asif R. Khan is a veteran tech start-up, business development and marketing entrepreneur currently serving the community as founder and president of the Location Based Marketing Association (The LBMA). Weekly podcaster at This Week In Location Based Marketing every Monday. Can be found at @AsifRKhan @TheLBMA on Twitter.