Virtual Goods in Location-Aware Mobile Games: The Future of Product Placement

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Booyah, a location-based game start-up, has announced it'll be trying out a new type of promotion that may be the model for smartphone ads in the future: In-game, virtual goods placements, based on your real-time location.

Booyah's partnership is with Swedish clothes chain H&M, and the resulting ad plan is dazzlingly simple: When you're near an H&M location, a particular piece of clothing--perhaps one on promotion--will appear in the Booyah MyTown location-based social "game." If any of Booyah's million users then check-in to the H&M location, there'll be discounts and so on available.

The idea is a development on the sort of real-world business partnerships that Foursquare has recently been chasing, or Loopt's location-aware ads. It also leverages the concept of virtual goods, which is a complex and growing phenomenon that may turn into a multi-billion dollar industry sooner than you think. The upshot for Booyah players is a tiny tweak to their game experience, with the potential benefit of discount shopping. H&M, and other ad partners who'll surely follow in this plan, get ultra-precise product placement ads, and Booyah is making money, either by charging H&M for every instance an ad is presented to a user or by taking a small fee if the user converts the ad into an actual purchase in a nearby store.

Though this is one of those blindingly simple ideas, the implications for social networking location-based games are huge. But they also go far beyond this. How long will it be before casual adventure, platforms-and-ladders games or RPGs played on smartphones are peppered with location-based product placements? It's not too much of a stretch to imagine this happening--the processing tech is already almost in place, smartphones have location systems threaded through their OSs in ever more sophisticated ways, and users are rapidly becoming aware of the benefits of location-based services and games thanks to Foursquare and so on. Is this necessarily a good thing? For those keen to see Lara Croft in La Perla, yes...but it may also herald a future that's far more peppered with digital product placements than you've ever imagined.

[Via VentureBeat]

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