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In the run-up to South by Southwest, we’re seeing a land rush to promote cool mobile apps. A top category continues to be location apps, following Foursquare’s past SXSW success. This year, the hot new categories will be social sharing (i.e., instagram) and group messaging (i.e., Beluga).

In the check-in category, Foursquare is making a big push to maintain its storied presence at SXSW (see previous post). But we’re already seeing a fair amount of competition from upstarts that are similarly innovating “beyond the check-in.”

The latest to emerge is EightBit. It’s fusing the social elements and game mechanics of local check-in services with the 8-bit graphics of vintage gaming consoles like NES. The result is a fun mix of local discovery, social sharing and plain old gaming (see video).

The product will be out tomorrow and interestingly will rely on a mobile Web strategy that utilizes HTML5. Native apps will follow but it clearly wants to plant a stake in the mobile Web (where we believe app developers will increasingly flock).

The mobile discovery and LBS space is quickly crowding and we will see a shakeout soon. Even considering the rapid growth of mobile Web users, there are more competitors entering the space than demand levels will withstand.

We’ll see Foursquare continue to thrive based on its momentum, talent and strategic road map. Facebook Places is a dark horse but considerably well positioned based on reach. And Google is similarly well positioned with Places/Maps’ integration with Android.

There will be some room — but not much — for secondary players. Those that emerge will have to differentiate in these little interesting ways that is. To further stand out, for example, it automatically generates 8-bit profile pics that can be used as Twitter or Facebook avatars.

This is a brilliant strategy as far as rising above the noise goes. I bet we’ll see these retro 8-bit profiles all over the place soon. Mine (seen above) is already uploaded as my new Twitter profile pic.

(Image credit: TechCrunch)

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