It's funny - this morning I was thinking that this kind of Augmented Reality + GPS makes the iPhone a perfect candidate for some real-world social gaming. If you could "scan" a crowd, find other players and do something - combat, item sharing, etc. to gain XP, it essentially becomes a social game that you're always playing, either passively or actively. Your phone could be an AI thing that "plays" for you, but part of the game would be being in the right place at the right time.

A lot of people have tried this sort of FlashMob style game in the past, but the iPhone's the enabling tech that could make it actually *fun*.

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