Late last week, Google launched Ingress, an ultra-futuristic, massive multiplayer augmented reality game set in the physical world and powered by smartphone GPS. The one-of-a-kind game, which is available by invitation only at this stage, looks incredibly interesting and was met with mass intrigue. More interesting, however, has been the lack of discussion around the grander motivations behind the project. From where I’m sitting, this is more than just a game.

Google is known for its unusual and technically ambitious projects, like the self-driving car and more recently the Project Glass wearable computer (more on this in a moment). But in most cases, the business opportunity is clear. And where it’s not, the project typically has a humanitarian “greater good” component to it, such as the company’s undersea mapping efforts. None of these explanations are terribly obvious when it comes to Ingress.

The general premise of Ingress is that users select one of two sides within the game, ostensibly the good guys or the bad guys (except you don’t know which is which), and then battle for control of strategic sites, aka “Portals,” around the world. What’s unique is that rather than the Portals being a collection of pixels on a device display in a made up realm, they are actual physical landmarks in the real world. Ingress, in that way, is like a massive, GPS-enabled game of capture the flag.

To capture a Portal, and harvest the “energy” contained therein for his respective team, a user must physically go to a location and check in. Additional energy is available by traveling specific walking paths, bike paths, and inner-city routes dictated by the company, all while the user’s Android device is transmitting GPS and accelerometer data. In some cases, the user will be required to photograph locations or objects along these routes.

Anyone starting to get creeped out yet?

On its surface, Ingress looks like a novel form of entertainment that might lead to additional user lock-in and serve as a point of differentiation for the Android platform. Look a little deeper, however, and there’s a wealth of business opportunities for Google to exploit. And a concerning amount of ways for it to misuse the data gathered.

Whether it plans to abuse this opportunity or not, Google has created an elaborate ruse to convince (possibly hundreds of) millions of people to share far more location and behavior data with the company than has ever been the case before.

And if there’s one thing Google can’t get enough of it’s data. The company made its fortunes by collecting more data (and better structuring and analyzing it into advertising opportunities) than any company in the world. Search history. Email correspondence. Maps usage. Content purchase and consumption. Google’s been watching. And it’s made billions off what it’s learned.

One of the more harmless uses of the Ingress data would be to dramatically improve Google’s mapping product. For all intents and purposes, the Mountain View company has taken the concept of its street view cars, which as the backbone of its Maps division were already a massive competitive advantage, and scaled it exponentially to potentially 500 million and growing Android users worldwide. As one Quora user pointed out about the game, “Google is doing what they do best: making data collection a game, making people want to do the hard work.”

Also interesting is the possibility of incorporating Ingress with Project Glass to create a more immersive and integrated gaming experience. The combination of the two could lead to increased hardware sales or even World of Warcraft-like player subscription opportunities. One could hope that this is all the company has in mind.

A potentially more nefarious use of the Ingress data would be to serve hyper-targeted, location-based advertising in a way that the proverbial lovechild of Foursquare and Highlight could only dream of. It’s one thing to serve an ad for the local deli as someone walks by. Slightly creepy, but not unheard of and likely to become more common across other platforms. What Ingress allows, however, is for Google to actively drive people to desired locations.

How much could the company charge a business to drive 1,000 or 10,000 people to a specific location at a specific time? It wouldn’t be difficult to do. The game’s developers would just offer ten times the points for checking in or capturing a particular Portal within a particular time window. If the number of players in the game continue to grow, and the engagement mirrors the obsessive levels seen in other online multiplayer games like World of Warcraft, the impact of such an event could be enormous.

This is why Ingress is so interesting, and potentially terrifying.

The privacy question around Ingress is an interesting one. On one hand, users are opting into the experience and would be foolish to expect anything other than for the data gathered to be used by Google and its partners for business purposes. On another hand, many of those future uses are likely still unknown to Google itself, meaning that users could be opting in to an unknown quagmire of personal data exploitation.

Ingress may not be the first app to sell persistent location tracking as a “service,” but the fact that it’s backed by one of the largest, most data-hungry corporations in the world quickly makes it the most important. The augmented reality game is a truly novel concept and one that has tremendous opportunity as an “online to offline” entertainment experience. From what I can tell, the small team within Niantic Labs – a skunkworks-like division within Google’s LA offices – worked incredibly hard on the project, as the positive early reception has borne out.

That said, it’s troubling to see users blindly handing over so much highly personal data to any company without knowing more about the extent to which it will be used.

UPDATE: Looks like Microsoft was just issued a patent for a similar crowdsourced mapping data collection methodology.