Grabbing Gamers With GPS Ghouls
By Geoff Keighley

(Business 2.0) – It's morning, and your cell phone directs you to a nearby Starbucks--not just for a mocha, but also for a free vial of magic potion. Spotting a friend in line, you strike him down with your virtual scepter. Three thousand points to you.

That's the future according to Peter and Robert Sprogis, whose company is making location-based games for GPS-enabled phones. Inspired by a new FCC regulation requiring cell-phone companies to use GPS technology to report the locations of 911 callers, the father-son duo founded Your World Games in 2005 and filed a patent on games that send players on virtual treasure hunts in real-life locations via GPS. Their first title, The Shroud, is due this spring. To protect a farming village from enemies, players visit specific spots all over the United States (and race against other players).

GPS games are relatively cheap to make: $150,000 is typical. (Developers spend $10 million on the average videogame.) Meanwhile, mobile-entertainment revenues are set to hit $43 billion by 2010, and the marketing tie-in potential is tremendous. KnowledgeWhere, a Calgary, Alberta, company that has already shipped two successful GPS games, is now trying to sell retailers like 7-Eleven on what it calls "the cowboy effect"--herding players into stores using the games. How much would McDonald's pay to be the setting of your personal victory over evil? The Sprogises can't wait to find out.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.