Adrian Hon should know. Hon, 22, spent much of the autumn distracted by I Love Bees, a vast alternate reality game (or ARG) in which players worked together to save 26th-century Earth from aliens. There were clues at ilovebees.com, but the plot was also advanced by "real life events" such as calls to payphones. "You were given
a phone's GPS location and a prearranged time, and when it rang you'd say a password to move the story forward," Hon explains. "We eventually found our phone on Dean Street in Soho. A dozen people had been turning up every day waiting for that call."

I Love Bees turned out to be a promotion for Microsoft's Xbox game, Halo 2. "People say, 'Oh, you're being used by marketers', but does it matter if a well-written game is designed to sell you something? TV's full of ads, but you can still enjoy ER."

Besides, Hon is betting on ARGs for his own prosperity. In August, he gave up his neuroscience PhD at Oxford to help set up an interactive-fiction business. Its first game, whose sponsor he won't reveal, will go live early next year. It is called Perplex City, and already its website offers tantalising clues to lure prospective players: "My people have lost something... whose value to us is immeasurable," pleads a desperate letter from the Perplex City Academy. "There is compelling evidence that an unknown party has taken [it] and concealed it somewhere in your world... The finder will be awarded Perplex City's highest honour and receive a substantial financial reward."

What makes these games so compelling is their many-layered, complex plots, which move from e-mail clues to hunts for CDs hidden in library books. Perplex City's teaser campaign even had a teaser campaign of its own. Back in March, a mysterious coded job ad appeared in Marketing Week. "GC'VC MVCZOEBJ Z MLFAU COCUK BCG OKAC LR JZFC", it stated. Patient readers deciphered this to mean: "We're creating a completely new type of game". Another encrypted phrase led to a mysterious website for "Project Syzygy", built by Hon. Some presumed it was an MI5 recruitment challenge.
Hon is a "puppet master" - a gamers' term for those plotting the action. He was first drawn to the genre three years ago, when Steven Spielberg used an alternate reality game to promote his film Artificial Intelligence: AI. Since then, interest has exploded, with dozens of games challenging thousands of simultaneous players across both real and virtual environments. A third of I Love Bees' players were over 30.

"It's a new kind of entertainment that's only become possible with today's level of internet and mobile phone penetration," Hon says. "That lets you tell a different type of story that ultimately involves hundreds of thousands of people." Alternate reality gaming, he reflects, "is currently where cinema was in 1903. And in Britain especially, we're about to see it take off."

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