Grey Area, a smart-phone games developer based in Finland has raised $2.5 million, according to TechCrunch.

Grey Area is the developer of the mobile alternative reality game called Shadow Cities, which turns real city streets into a virtual battle zone for players, with missions, casting spells, and mages. Think FourSquare if FourSquare was actually a game, and not some pointless app that you can only use to check-in real-world locations and nothing more.

Nerdy, yes. Cool, indeed. Until someone gets hit by a bus or car, as Robin Wauters of TechCrunch points out (an inevitability that will happen sooner than later).

Right now, you can only play this game in Finland only but the company plans on expanding to the US with their $2.5 million in cash.

In the meantime, you can check out this video demo of Shadow Cities below starring Veelay (Level One Mage!) and decide for yourself if this is the next wave of mobile virtual reality games or a bit too real for your taste:

With geo-location and the iPhone, role-playing and Dungeons and Dragons games may never be the same.