Location gives the game away

With Shadow Cities, a Finnish developer hopes to get heaven from “mana.”


Courtesy of Grey Area

Unbeknownst to your typical shopper, tourist meccas such as Toronto’s Dundas Square and Vancouver’s Granville Island could soon be turned into virtual battlefields, fought over by anonymous smartphone-wielding combatants. Using the iPhone’s GPS capabilities, a new game called Shadow Cities puts players in navigable, stylized versions of real cities. Players—called “mages”—can team up and wage war over nearby neighbourhoods.

Shadow Cities, a location-based massively multiplayer online role-playing game, can be “a bit of a mouthful” to describe, Ville Vesterinen, CEO of Grey Area, the Finnish company that created the game, told an Amsterdam audience in January. But the game hit Apple’s Canadian App Store in May, and venture capital investors might want to take notice. According to technology analyst Carmi Levy, games like this will become commonplace in the years to come, and “it’s only a matter of time before…millions of us are willing to plunk down hard-earned cash to participate.”

According to Vesterinen, Canada is a test market for the U.S. “We want to see how it behaves in a bigger market—how it takes off,” he says. The company has high hopes and, since late February, $2.5 million in venture capital, some of that coming from prominent investment firm Index Ventures. One thing that drew investors to Grey Area was a successful first launch: back in November, when Shadow Cities was released in Finland, it dethroned big-hitter Angry Birds as the top-grossing app in the country.

But its business model is starkly different. Unlike Angry Birds, Shadow Cities is technically a free app, and players needn’t ever pay a dime. There is, however, incentive to spend, thanks to something called mana, which acts as in-game currency. Players earn mana just by playing the game but can get ahead if they buy additional mana from the App Store. “You can spend quite a bit on it,” Vesterinen says. “Those people we call whales.”

Yet there may be another way for these startups to earn cash. Data on how players move around—like what stores they frequent—is valuable to marketers, and salable, Carmi Levy says. “But privacy currently casts a very large shadow over this space,” he adds, noting Sony’s recent security failure with the PlayStation Network. In a worst-case scenario, this technology could let would-be robbers see when residents are out of their homes. Security should come first, Levy believes, before location-based software can rise to prominence.

Privacy concerns aside, he sees a bright future for games like Shadow Cities. “Pick any game on Facebook—in and of themselves, the games aren’t that spectacular,” Levi says. “The value is in that sense of community,” and adding location to the mix will only strengthen it. After all, now it’s not just you and your neighbours getting blown up—it’s also your neighbourhood.