Thanks to the iPhone's 3.1 OS update, augmented reality games are becoming popular on the App store. Developers are able to produce games easily using the iPhone's video camera and compass.

The next big AR based game heading to the iPhone is Toyspring's Arcade Reality. Originally only available on Palm Treo devices, top publisher Chillingo are bringing the AR alien shoot 'em up to Apple's device in the near future.

In Arcade Reality the idea is to move the phone around the area to seek out the attacking hordes of extra terrestrials. Using an array of powerful weaponry against a variety of beings, you must save your reality from the clutches of the virtual aliens.

Arcade Reality uses augmented reality technology to bring old-school arcade gaming into the modern day. "For over 30 years millions of aliens are slaughtered daily in video games. Until now they could not strike back. Until now they could not attack us in the real world." Says the Arcade Reality slogan.

Freeverse have already launched Fairy Trails onto the App store and are currently in the process of producing further AR based games. If the fairies and the aliens find success, then more developers are sure to bring their own contributions to AR gaming.

See the game in action below or on Youtube: