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luiaots said:

Now i dont understand how the AR cards the unreal tournament you describe. Care to elaborate a little more for the ones that lack imagination like me lol


AR Cards are used to tell the system the orientation and distance from where the graphical effects will take place. In this case, they wouldn't be needed.

Instead, the streetpass connection could be used to calculate the distance between players while the motion sensors can communicate the orientation.

It is my assumption that you can measure the distance between systems by measuring the delay between sending and receiving data. Obviously the longer this delay, the farther the distance will be (it takes time for data to travel through the air even if it's milliseconds).

Within this communication, orientation data can be communicated. This can let players know where they are facing in relation to each other.

By pinpointing where other players are, graphical effects can then be painted in those locations, creating the illusion that your friend carrying his 3DS is actually a game character. 

You can use this to create a kind of real-life deathmatch experience, almost like a graphically enhanced version of laser tag. In this manner, you could go to custom locations (your house, parks, malls, etc) and play in a real world location with real players.

It's a crazy idea and I have no idea if any of it would actually work, but it would be interesting nonetheless if it could be made a reality.