Kneeling shoeless on the floor of his office, which is lined with toy cars, Priebatsch deals out game dynamics cards from a deck the company has created to showcase the underlying ideas. For example, there is the progression dynamic, which is the idea that if you present people with clear, achievable guideposts on the way to a goal, they will be strongly inclined to aim for the next guidepost. In the bestselling Sonic the Hedgehog 2, for instance, players must collect 50 rings to earn a red halo of stars, which in turn helps Sonic stop the evil Dr. Robotnik from capturing Sonic’s friends.

For now, businesses seem to be just scratching the surface of these kind of motivators in their efforts to get more customers in the door. For example, Journeys challenges visitors to find a pair of shoes they like, try them on, and take a picture of themselves wearing the shoes. By then, Priebatsch points out, the customer is wearing a pair of shoes that he or she likes and identifying with them by recording the experience. He believes that offering the customer a discount will have greater impact at that moment and be more likely to result in loyalty and repeat visits.

It’s not yet clear whether this approach will work: companies like Scvngr still must prove themselves. Marketers are uncertain how to measure the value of location-based marketing campaigns, and it remains to be seen whether users who check in at a location are more likely to return or feel loyal to the product.

Controversy over a recent marketing campaign that McDonald’s operated through Foursquare illustrates the difficulties. Initially reported as having vastly increased foot traffic to the restaurants, the campaign turned out only to have increased the number of Foursquare check-ins, not the amount of food purchased. Companies are searching for ways of quantifying real results.

Nevertheless, sophisticated investors are betting that results will follow. Scvngr has backing of nearly $5 million, most of it from Google Ventures, with Highland Capital Partners, DreamIT Ventures, and Bantam Group also having provided funding in earlier rounds.

Priebatsch is using the capital to develop a second generation of the technology, with more sophisticated games. He is also expanding Scvngr’s sales force beyond Boston, Philadelphia, and San Francisco to New York and Seattle, with the goal of proving that Scvngr can move up a level, beyond the novelty stage and into the realm of truly increasing sales at thousands of retail locations.