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Summary:

Can a game really be the killer app that brings converts and revenue for location based services or is that a 22-year-old’s pipe dream? Seth Priebatsch, the founder and “Chief Ninja” at SCVNGR said it’s why his startup is on pace to hit 1 million users.

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Can a game really be the killer app that brings converts and revenue for location-based services or is that a 22-year-old’s pipe dream? Seth Priebatsch, the founder and “Chief Ninja” at SCVNGR said all the check-ins and even the deals and discounts aren’t creating the interactions with places that are meaningful and interesting: the kind of stuff that people will readily share with others and will fuel mass adoption. The badges and points many location services offer are just bolt-on gamification efforts. Location, he says, needs to be more engaging to matter.

SCVNGR bills itself a game layer over the real world, and while it offers familiar features like check-ins and pictures, the core of the service is in its challenges: the mini games that people and businesses create at locations. SCVNGR allows anyone to build these challenges, which can be as simple as checking in with another person or as elaborate as scavenger hunt-like tests, like finding an object inside a store or pulling off a trick. Priebatsch said SCVNGR’s different approach is finding a lot of converts; the service, which rolled out in May, is on pace to hit 1 million members early in the new year.

Take at a look at a video interview I conducted with Priebatsch, a fast-talking,  22-year-old whiz kid:

Priebatsch said the key for location is to create experiences that are unique and customized for a place. Check-ins, badges and other distinctions play on some game mechanics, but they are largely generic approaches that don’t emphasize what a person should do at a location, he said. By emphasizing real games, SCVNGR is finding that users are more attached to a location and have a deeper experience there.

For example, Priebatsch said 85-to-90 percent of the time when SCVNGR users post an update from a location, they share about a challenge, not just a generic check-in. He said the reaction those updates get on Facebook and Twitter are an order of magnitude higher than a regular check-in. He said that shows people are interested in the interaction that happens at a place, not just announcing a check-in, and businesses are noticing. He said SCVNGR is monetizing through selling challenges to large corporations, 1,000 of whom have signed on with SCVNGR. (Between 80 and 90 percent are repeat partners.) For example, SCVNGR struck a holiday deal with Coca-Cola, which sponsored challenges in 10 malls and gave out $100,000 in gift cards to people who participated. SCVNGR members racked up 75,000 points in the Coke challenge.

“What this says to us is people like the premium content. People both like creating it and consuming it. And if you can create a framework in which people can build these custom, slightly richer, slightly more engaging, slightly more rewarding experiences at places, that that’s what’s going to make the location-based space go from being this small sort of 4 percent bubble of the Internet world to being something that 100 percent of everyone everywhere uses to play with the places they visit,” Priebatsch said.

As Priebatsch noted, only 4 percent of Internet users use location-based services, according to Pew. We’ve been looking at how location services can break through beyond the check-in. Some are offering more deals, while many are turning to local recommendations. Priebatsch said SCVNGR isn’t looking at those two options because he feels like they are utilities but not engaging enough.

I think Priebatsch is on to something. Location can be meaningful when it takes into account the unique nature of places people visit. A bar is different from an amusement park. I, as a user, should get a different location-based experience at each place, but I’m not sure if mainstream consumers are willing to turn every location into a game board. Some people are simply lazy and offering a way to interact with a place, even fun ways, may not make them any more likely to try SCVNGR.

I’m curious to see how this all shakes out. At the very least, SCVNGR’s approach will differentiate itself more and more over time from other location players as it sticks to its game-first approach. SCVNGR may not single-handedly take location-based services mainstream, but it could well be a big part of how that happens.

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  1. “Revenue is completely irrelevant in the tech space.” Really?

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    1. I think he was joking when he said that. Or should have been….

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  3. Hahah. This is the worst idea to bring something to mainstream. First it segmented itself to people who have time to play game. Second it seems complicated enough to focus on hardcore gamers. Third it is aimed at hardcore gamers who are not couch potatoes.

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    1. You bring up some good points. But the games he’s talking about are very lightweight. Still, like I mentioned in the post, it’s not for everyone.

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  5. [...] SCVNGR, it’s a proof point that location can be powerful and lucrative. In talking to CEO Seth Pribatsch recently, he said the key to location is treating each place differently. For businesses who create unique [...]

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