Gamification – Why it matters for Business

A very hot topic in the business world today is the growing trend of Gamification. This is a great tool, one that can significantly boost performance and motivation of clients, partners and employees, but one surrounded by misunderstanding.

Many people think it means using video games for training purposes or providing sponsored video games for customers to play so they can have an enjoyable “experience” with the brand. Although these are good uses of games in business, this is not what Gamification really is. Here, I will clarify the issue from a person who has the point of view of a businessperson, a gamer, a student of Gamification, and a proponent of correctly applied gamified systems in the business environment.


First, lets properly define what Gamification really is.

The most accepted definition of Gamification is: “the application of game elements to non-game situations”. In a business scenario, this means an integration of game elements into common business activities, such as customer relationship management or human resources processes, for example. But what exactly are “game elements”?

They can be understood and classified in 3 levels:

  1. Dynamics, the high level thinking behind a gamified system (e.g.: constraints, narrative, progression, relationships, etc.)
  2. Mechanics, the mid-level concepts that define relationships and drive action in gamified systems (e.g.: challenges, competition, cooperation, community, feedback, meaningful choices, mastery, rewards, etc.)
  3. Components, the building blocks of a gamified system (e.g.: points, badges, leaderboards, quests, check-ins, avatars, virtual goods, etc.)

There are hundreds of game elements to think about but, in order to function correctly, they must be implemented by applying “game design” thinking. This means, the system has to have a purpose, it has to be human centered, it has to be balanced, it must provide a journey from beginner to mastery for the players, and it has to be fun, among other things.

Game elements, applied in games and in properly designed gamification projects, translate to a user experience that provide:

  • Objective and aptly timed feedback systems;
  • Clear sense of purpose (in an epic sense);
  • Clear statement and understanding of what needs to be done (quests);
  • Clear sense of progress (progress bars, leveling);
  • Activities presented in gradual difficulty (doable but always challenging);
  • Tangible achievements with status value for the player (badges, epic prizes);
  • Competition defined by clear and fair rules;
  • An environment that fosters collaboration to tackle massive challenges that one person clearly cannot tackle on their own.

Looking at the list above, from the point of view of a businessperson, it is clear that these points are definitely strategic. It is also clear that, in management theory, we have been talking about these same things for about a century now.

What is really worth noting is that game designers have perfected the science of applying these elements in a manner that they massively engage and motivate people to spend an incredible amount of time tackling extremely mind-intensive activities that are today’s video games.

According to Jane McGonial, in her TED talk (video below), currently there are more than half a billion people worldwide playing videogames for at least an hour a day. This amounts to about 3 billion hours a week (in 2010). As mentioned, video games are complex problem solving, extremely mind-intensive activities and people perform then voluntarily and have fun while doing them. Consequently, we can certainly learn from them and extract useful principles to apply to non-game activities, such as business and education.

What games can give businesses is a framework, a guide on how to apply these elements in a manner that will achieve business results and will make all stakeholders (employees, clients, managers, partners and business owners) better off.

There is no doubt that games, and game elements, play a huge role in the lives of the new generation of business people and the workforce. They will demand (and will also create) a better, more immersive, implementation of those game elements listed here; something that most businesses today still fail to do.

However, there is a certain danger of implementing game elements without proper understanding of human psychology. Jessy Schell has an entertaining “semi-apocalyptic” vision of a gamified future that is worth watching.

However, the real danger of improperly applying game elements to businesses, and to other areas, has its roots in Behaviorism theory. Points, badges and leaderboards are normally used as external rewards to motivate people’s behavior. When improperly used in a situation where there already was an intrinsic motivation for performing a task, there is a real danger for the extrinsic motivation to substitute the intrinsic one. For example: in a research done in a primary school, kids were asked to draw. Some kids intrinsically liked to draw while others not. When rewards were introduced for good drawings, the general quality of the drawings and effort went up. However, when rewards were later withdrawn, the quality and effort of the drawings dropped significantly below when compared to before the study. That happened because even the kids who liked drawing for its own sake had substituted their intrinsic motivation for drawing for the extrinsic motivation of the reward.

Another danger is that when gamification is performed as a system for controlling people’s behavior. In a very criticized trial, which became known as the “Electronic Whip”, Disney implemented a leaderboard for displaying the performance of their laundry employees. In it, employees where publicly shown their names and scores for their performance in doing laundry. As a consequence, people started to rush for better scores, often skipping lunch and doing voluntary overtime. However, they became very nervous, anxious and felt they were being unreasonably controlled. In systems like this, short-term productivity usually goes up but in expense of the people’s sanity and respect for employees’ human needs. A properly gamified system must provide motivation together with fun. It must provide freedom of choice for the players and a sense of purpose and companionship.

Some opponents of Gamification have named the bad approaches of gamification as “Pointsfication”, which denotes mindlessly applying points, badges and leaderboards to activities with undesired results. They are right in oppose these approaches. However, if done right, gamification can transform a boring job into something fun. It can boost motivation by properly providing objective feedback, sense of progress and clear goals. Gamification can be used as a framework for creating a path to mastery for employees and for effectively communicating desired behaviors to clients, partners and other stakeholders.

For people who want to know more about gamification, I recommend Jane McGonigal’s videos on TED, her book “Reality is Broken”, Professor Kevin Werback and Dan Hunter’s book “For the Win”, and videos on the Gamification Summit.