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Booyah, the startup behind the location game MyTown, is blending two of the biggest trends this year. The gaming company is partnering with Swedish apparel chain H&M to offer location-sensitive virtual goods.
Through the partnership, a virtual good like a knit top will appear in the game whenever a player is near an H&M location. If they check-in, they’ll get discounts and promotions for real goods on sale. There’s also other special H&M-themed gameplay — a scratch card that looks like a Lotto ticket might pop up and give players extra points.
With virtual goods on track to reach $1.6 billion in U.S. revenue this year, Booyah is tapping into what could be a lucrative business model. It could take several forms; the company could charge users who want more virtual cash, charge brands for sponsoring themed goods or take in affiliate fees when a real product is sold.
Experimentation around location-based advertising and promotions has flowered over the last two months. Foursquare signed a number of partnerships with traditional media companies like Bravo, HBO and The New York Times to offer special badges for users who “check in” or show up at special locations and notify the app. Loopt is on the verge of launching a more accountable advertising system that can show whether promotions have had a measurable effect in bringing customers to a store. Gowalla, probably the competitor with the closest model to MyTown, has also been offering branded virtual goods like Incase bags if players check into Apple stores.
With its second game on a roll and passing 1 million users, Booyah is looking to keep its momentum and rack up advertising partnerships. Branded virtual goods are a better fit for this company than some of its other competitors because it resembles a classic game — it’s like Monopoly for the real world where players can “buy” and “sell” their favorite hangouts. Foursquare, Loopt and Rummble, in contrast, are social networks with a bit of gaming mechanics involved to incentivize people to share where they are.