Location-based gaming, mobile games that take advantage of GPS technology to let players use real-world surroundings in a virtual experience, is a relatively new frontier. But developer Booyah is at the forefront and has made a major splash in this uncharted virtual territory thanks to its Monopoly-in-real-life social game MyTown and its nightclub simulator Nightclub City. During DICE 2011, Booyah co-founder Keith Lee shared the secret of the company’s success and its vision for future of the location-based games space.

When Booya started in 2008, the team was comprised of designers who had left jobs at some of the biggest developers in the industry, having worked at Insomniac Games, before moving onto to Blizzard where Lee worked on Diablo III, and finally onto founding Booyah.

When the Booyah developers looked at the mobile gaming scene in 2008, they saw a market on the rise, thanks in part to Apple’s App Store, which was still relatively new. For Lee, the prospect of having a game that could interact with people’s lives and vice versa was now more possible than ever, because of the ubiquity of smartphones like the iPhone.

Booyah’s first effort, Booyah Society, which let you “gameify” all aspects of your life and share that with the world, was a bit of a failure, but the lessons Booyah learned from that failure led directly to the massive success of MyTown.

To capitalize on the growth of its free hit app, Booyah introduced virtual goods and items, some branded by real-world companies, and had great success almost instantly. Moving forward, Lee says we’re art just scratching the surface of what location-based games are capable of, especially in terms of how developers can more robustly and successfully integrate real-world activities into games through augmented reality programs and similar tech available in current and future smart devices.

As far as what Booyah has planned for the immediate future, the developer is currently working on MyTown 2 and a mobile version of Nightclub City.