Even though I don’t know a ton of people in my town, I enjoy “playing” Foursquare and to a lesser extent Gowalla.  In Foursquare’s case, mayorships can be somewhat fun to pursue and the geo-specific deals can be worthwhile on rare occasion.  The people I know that are crazy about Gowalla seem to be focus more on the virtual item quest, either collecting everything or hunting down low numbered items or whatnot.

In both cases, the location game is played as an individual.  I think this limiting and both services, or even maybe an API built on top of them, could be a lot more fun with a tongue in cheek gang component added and fully embracing the game aspect rather than existing in the social networking-location game hybrid space they seem to exist in now.

Here’s how it could work:

1. Gangs could form fluidly with members joining and leaving at will, perhaps with a cap on members and a gang leader approval required.

2. Replace “mayorship” with turf.  On the most basic level, the gang with the most collective checkins controls the location.

3. Virtual items provide attributes to individuals or gangs such as double points for checkins at a certain location or local business coupons.

4. When a gang takes over a location they can loot items from the previous gang that controlled the turf.

That’s the idea in a nutshell.  I think it would be a lot more fun.  As an individual user, I would have more incentive to coordinate and meet with other users and businesses could possibly see more benefits in terms of foot traffic than with either Foursquare or Gowalla’s current incentive systems.

Most importantly, I could finally break out that blue bandana in my closet.

My gut says that this would be a complete failure as a business, so someone will probably try some variant of it with great success.