In 2002, [Caterina Fake] and Stewart Butterfield, then her husband, founded Ludicorp, a Vancouver, British Columbia, company whose primary product was a massively multiplayer online role-playing confection called Game Neverending. GNE was less a traditional game than an elaborate online party — a kind of precursor to Second Life. “It was really just a context for socializing,” Fake says. “You know, when people get together on Friday night for bridge, they just want to see each other. The game is just an excuse. It’s a framing device. You really just want to hang out and smoke cigars and gossip.”
via m.wired.com
People play games because you set up a world, a set of rules -- just a context.
People use Flickr because its where people go to appreciate photos.
People use dailybooth or foursquare because its the place to go for their respective things.
Context -- really an excuse to do X -- is a powerfully important thing to provide. Without context (moreover, a context that makes people do something fun or valuable), your users will leave and go elsewhere.