How Location-Based Services Changed Social Games in Asia

[Editor’s note: PapayaMobile chief executive Si Shen shares her perspective on the importance of location for social gaming in Asia.]

As social gaming on mobile devices continues to grow throughout 2010, so will the number of applications offering location-based services. But will 2011 be the year that location-based social games take off in the U.S? With smartphone ownership continuing to expand, we’re presented with an opportunity to add location awareness into social games, adding unique experiences for users and creating new business models for developers.

To provide inspiration to U.S developers and to offer a glimpse of the possibilities that location-based services bring to social games, I’d like to share with you some unique insights into the Asian Market, particularly Japan, where location-based gaming has been popular for some years now.

The largest social gaming platform in Japan, Mobagetown of DeNA, was released in early 2006. China’s Tencent launched its mobile QQ with a gaming platform at the end of 2006. Although we see some U.S. developers starting to integrate location elements into mobile social games, the Asian market has a longer history of using location-based services in mobile social games.

The Japanese market has been experimenting with LBS mobile social games since 2005. One of the first location-based games, Colonial Living PLUS, was released in May 2005 by COLOPL. This game is a standalone LBS social game in which users build and maintain their cities. In mid-2010, it had about one million registered users, with 90 percent over the age of 20. The games are designed so that users have to go back in frequently to take care of their cities.

The location information adds another dimension around which users can interact and explore new opportunities for fun and entertainment. Since the location information is relevant to most mobile devices, all existing social games can be integrated with some location elements. For example, a farming game can connect virtual farms with real locations; a mafia wars game can hide the weapons in virtual locations that are associated with real locations; and the “virtual neighbors” in a pet game can be associated with pets that are close to you in the real world.

Location elements can be made as a ubiquitous API that can be integrated into any social game. Google is the first company to share location information as open APIs. A Chinese company, Beiduo, that has millions of registered users, is a pioneer in sharing location information and my company, PapayaMobile, is the first to release a LBS SDK that allows other applications to integrate location information associated with users’ social graphs.

There are more games – in various categories – on the way that are specific to LBS. The largest category is the city development games, like My Town, where users build a virtual world based on their real location. It can be easily integrated with a virtual currency system. Since the city development games are associated with real locations where users have an attachment, it is very easy to build loyalty to the game. The Japanese game Colonial Living PLUS is a good example.

The other large category is “take-over-an-area” games, such as Foursquare, in which the company’s 5 million users occupy or conquer a location by continuously visiting it. These games can be combined with promotions for local businesses. There are also other game-oriented happenings in this area in Asia. The “Mobile Country Takeover Battle” developed by Japanese company Mapion is a great example. Players use the “takeover” command to conquer the region, and repeat until they conquer all of Japan. By conquering a certain area or by answering a quiz, users earn points. However, the “Mobile Country Takeover Battle” is a relatively small game in terms of registered users.

There are other examples including scavenger hunt games, photo uploading games and even location-based dating games. One interesting example involves GPS graffiti and traces a user’s whereabouts to create a drawing on their mobile phones. Several years ago in Japan, an interesting application came via a game that focused on signal gathering – users would go to different locations and gather cell phone signals to earn experience points. Although this game is not relevant in Japan anymore, a similar game for AT&T in San Francisco would be beneficial considering the connectivity issues – and consumer complaints – that the company faces.

LBS is becoming a common feature for many social games, but in order for it to be effective on a social platform, it must achieve massive user numbers. Sharing user locations and points of interest via social networks is a trend for all game developers (LBS and otherwise). Usually third-party developers can call on LBS APIs to get users location-related information so that it can be used to enhance and personalize games. Because a lot of third-party developers use a unified database of location information and user profiles, the LBS information is more effective because it is connected to social graphs. For example, more than 50 percent of Papaya Farm users actually use the LBS check-in function of the Papaya SNS. Sharing the Papaya location database with the other developers makes it much easier to achieve a comprehensive point of interest database. There are currently eight million registered users on Papaya sharing their location information with each other, and this location based information is used by 12 Papaya applications and 150 third party applications that have integrated our Social SDK.

More importantly, LBS will bring a new business model to social games by combining local business and gaming. For virtual city based games, the virtual currency system can be easily integrated into the game. For games where virtual currency is not relevant, the combination of gaming and local business coupons can provide a great way to promote services to relevant users. The social-graph-based recommendation system, combined with location-relevant information, provides comprehensive suggestions to users for local businesses.

China’s largest local business directory, Dianping, with 10 million users, has a great business model combined with location information. When players use Dianping’s local information, it provides coupons that are relevant to their specific location and profile. It allows users to check in to specific local businesses and become the “king” of the location. The “king” is then rewarded with coupons or discounts at the specific local business.

So what does this all mean for the U.S. market? Asia is leading the way in location-based social gaming and is many years ahead already. The region is showing the world the kind of location-based social games we’re likely to experience in the near future. Expect 2011 to see the continued rise of “take-over-an-area” games such as Foursquare, a deeper integration of location-based services into mobile social games and a new wave of popular location based games that you haven’t even heard of yet.

Si Shen is the Co-Founder and chief executive of mobile social gaming network provider Papaya Mobile Inc.