Digital transformations are not contained within the digital domain but are increasingly spilling over into the physical world. In this chapter, we analyse some of the transformations cities today are undergoing towards becoming smart cities. We offer a critique of smart cities and a way forward, divided into three parts. First, we explore the concept of Smart Citizens in terms of localities, the move towards a hyperlocal network and also the citizen’s role in the creation and use of data. We use the ‘Smart London’ plan drawn up by the Mayor of London, as a way to illustrate our discussion. Second, we turn to the civic innovations enabled by digital transformations and their potential impact on citizens and citizenship. Specifically, we are interested in the notion of social capital as an alternative form of in-kind currency and its function as an indicator of value, in order to ask how digital transformations can give rise to ‘civic capital’ and how such a concept can help, for instance, a local government invite more representative residents and community champions to participate in community engagement for better urban planning. Third, we introduce a hybrid, location-based game under development by design agency Preliminal Games in London, UK. This illustrative case critiques and highlights the current challenges to establishing a new economic model that bridges the digital–physical divide. The game provides a vehicle for us to explore how established principles and strategies in game design such as immersive storytelling and goal setting can be employed to encourage players to think of the interconnections of their hybrid digital–physical environments in new ways.