In the current entertainment marketplace, fact and fiction blur -- and sometimes fuse -- in surprising ways. So, it's not surprising that alternate reality games, which combine elements of fantasy with the chance to win or lose real contests, are enjoying renewed interest.

They mesh well with the trend towards more immersive entertainment, such as virtual worlds. Another impetus to ARGs is their ability to serve as a valuable link between in- and out-of-home interactive entertainment and marketing.

Dramatic changes in the ARG form itself are revitalizing the medium -- including more user-generated and mobile content and the development of more character-driven game scenarios.

One of those groundbreaking efforts is The Sky Remains, launched by Licorice Film in April and sponsored by HP Labs. The game centers on a science-fiction mystery in the sixth dimension, where users are enlisted as recruits in a detective agency and challenged to find clues online and in the real world to solve crimes.

Users make use of the game's dedicated Web site to upload videos and solve puzzles, explains Hazel Grian, director of Licorice Film and co-designer of the ARG (with Jonathan Williams). Players have an opportunity to create videos and share those documented experiences with other users.

The Lost Ring, a next-generation ARG introduced in March, has made a special mark by reaching a broad global audience, with 28 percent of the players in North America, 25 percent in Europe, 18 percent in Asia and 13 percent in Latin America.

The title, which was designed by Jane McGonigal, president of AvantGame, revolves around five athletes who travel to our world from a parallel universe to revive "labyrinth running, the lost sport of Olympia." With the assistance of an Olympic historian, the players decipher mysteries described in a secret codex written in Esperanto around 1900, which contains pages hidden in 27 places, including libraries, schools, bank vaults and bookstores around the world.

Users connect through blogs, forums and wikis, and post their findings on YouTube, Twitter and Flickr. Their findings are aggregated and mapped out on a Google Maps mash-up, explains Edwin Veelo, acd at AKQA.

User-generated content is playing a more significant role in alternate reality games, but its use must be carefully thought out.

Brian Clark, CEO of GMD Studios, which has developed a number of ARGs, including The Art of the Heist, cautions that UGC must be carefully integrated into games and sufficiently open-ended to nurture the development of even more user-generated content.

Evan Jones, president of Stitch Media, believes that UGC in ARGs should be geared to "commissioning" content from users and "integrating" that content into "the context" of an ARG's "story." He believes ARGs should enlist the audience as collaborators in the story, and not simply use "random input" from users.

Mobile content is becoming a more important element in alternate reality games.  ARGs with significant mobile content are flourishing in Europe and Asia, notes Clark. But lack of standards is hampering the development of mobile content in U.S.-based ARGs, he says. Clark believes there will be much greater opportunities for mobile content in ARGs in the U.S. once a "universal standard" is established for mobile devices in the U.S. Notwithstanding the standards snag, such mobile devices as the iPhone can serve as a useful "creative platform" for developing ARG content, he notes.

Another major trend in alternate reality games is the emergence of a subgenre of "serious" ARGs.

McGonigal, who designed the ARG World Without Oil, sees great potential for "extending" the "collective intelligence" of ARG users to "global dialogue, business, and creativity." In fact, Channel 4 and the BBC are using alternate reality games for educational purposes, "engaging kids with issues such as citizenship," reports Grian.

The point being, apparently, that sharing such lessons in alternate realities can help them better navigate their everyday lives in the real world.

Michael Mascioni is a freelance writer who covers digital media, video and other subjects for publications such as Digital Signage Today and does market research work in digital media. He can be reached at mmascioni@earthlink.net.