1. Digital Game Design Techniques for Business:
Rules, Incentives, Applications
LGST/OPIM 640X
Fall 2011, 0.5cu
Overview
Leading firms are engaging in the practice of gamification, using the techniques of digital
game designers to serve objectives as varied as marketing, human resources management,
productivity enhancement, training, innovation, and customer engagement. This course will
examine the mechanisms of gamification and provide an understanding of their effective use
in the modern firm.
Companies of all sizes are already using gamification to deliver measureable returns. For
example, the social location startup Foursquare employs a mobile-based badge and
achievements system to motivate purchases and interest in local retailers, while Google uses a
point system and leaderboard to get users to tag millions of image files for free. Venture
capitalist John Doerr called Zynga, an online social games developer that relies entirely on
virtual goods for monetization, the best investment in the storied history of his firm, Kleiner
Perkins. SCVNGR (pronounced “scavenger”) provides a platform for retailers to create
games based on proximity to their products, and several Fortune 100 firms are experimenting
with gamification both internally and externally.
While some see just another technology fad and others raise legal or regulatory concerns, the
level of activity continues to expand. Gamification is part of a broader trend of integrating the
virtual and the physical worlds to alter incentives, redefine marketing and management, and
promote innovation.
Gamification is a discipline that, like any effective business technique, requires clearly
defined strategies and well-managed execution. Game developers have been perfecting their
craft for decades on computers, and millennia before that. Researchers in cognitive science,
sociology, and education have extensively studied games’ deep psychological bases.
Business fields such as management, operations, marketing, and law are now adding to this
understanding.
This course will draw upon interdisciplinary source material as well as real-world case studies
to identify effective strategies, techniques, and metrics for the application of games to
business. It will also identify a number of significant pitfalls to the successful implementation
of gamification techniques, notably legal and ethical issues, the difficulty of making things
fun, and the problems with implementing radical change in established firms.

2. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
Instructors
Associate Professor Kevin Werbach Professor Dan Hunter
Dept. of Legal Studies and Business Ethics New York Law School
werbach@wharton.upenn.edu hunterd@wharton.upenn.edu
Logistics
This is an experimental course, both in content and format. Material will be delivered through
a combination of weekly in-person meetings and online learning. The course will have the
normal required contact hours of a .5 cu elective, but approximately half of that time will be
through online video lectures, real-time video links with guest speakers, and interactive online
discussion. Students will also be expected to participate in asynchronous web-based
collaboration in between class meetings, through posts to faculty-mediated blogs or
discussion boards. The course itself will employ gamification techniques, allowing students
to experience and assess mechanics such as achievements, points and badges.
The course will be offered at the MBA level. Space permitting, students in the Wharton MBA
for Executives program and students from other Penn schools (e.g., Law, Design,
Engineering) may be enrolled by instructor approval on a case-by-case basis.
This is an interdisciplinary course. It incorporates aspects of strategy, customer engagement,
innovation, psychology, education, and sociology, in addition to legal and ethical issues.
Syllabus
The course will alternate between weekly in-person meetings and web-based video lectures.
In general, the web-based sessions will take the form of traditional lectures, with students able
to comment or ask questions in real-time or after the fact. The in-person sessions will
emphasize student-to-student discussion and team exercises, in addition to reviewing the web-
based lectures and introducing the topic of the session.
Several of the course assignments involve playing games. These are intended as serious
exercises, requiring analysis and written submissions. One cannot fully understand how
games operate or affect their players without playing them. The assignments are designed to
expose students to a wide range of contemporary digital games and game mechanics, which
can be applied to other business contexts.
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3. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
1. Introduction to Games and Game Design (in person session)
The nature of play, and its significance to humanity; what makes a game; basic
terminology; the evolution of games throughout history; loyalty programs and other
antecedents; financials and market dynamics of the videogame sector; the emerging
gamification tools market; game design methodology.
Read: McGonigal, Reality is Broken, Chapter 1 (What Exactly is a Game?)
Malaby, Beyond Play
Optional: Huizinga, Homo Ludens, Chapter 1
(Nature and Significance of Play as a Cultural Phenomenon)
Class Prep: Complete the personal information survey on the course website.
Play the multiplayer version of the game, Minecraft
(http://www.minecraft.net/). You should also look at some of the articles,
blog posts, and user-created resources about Minecraft available online;
they are not hard to find. Then consider the following questions:
• What is the goal of Minecraft?
• Is Minecraft fun? If so, why? If not, why not?
• Why has Minecraft been successful?
• What could a business learn from Minecraft?
In Class: In addition to covering the topics for this session, we will introduce the
structure and technology of the course. We will discuss how the website,
blog, and wiki fit into the course, and also the interaction of in-person and
web-based sessions.
We will divide students into small teams for the final project, and provide a
guide to game design theory and methodology.
2. Game Mechanics (web-based lecture)
An overview of what makes games fun, and the use of various types of points, levels,
badges, leaderboards, avatars, competitions, and virtual goods within the modern firm.
Read: Zichermann & Linder, Game-Based Marketing, Ch. 4 (Funware Mechanics)
Reeves, Malone & O’Driscoll, Leadership’s Online Labs
Optional: Hamari & Lehdonvirta, Game Design as Marketing
Watch: Werbach, All I Really Needed to Know I Learned in WoW, September 2010
Assignment: You will be given a trial account in World of Warcraft (WoW), a popular
massively multiplayer online game. If you are not familiar with WoW,
spend some time leveling up your character and exploring the game world.
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4. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
You will be assigned a specific aspect of the game to analyze. For example,
the Auction House in which players trade items for in-game currency, the
fishing mini-game, or player vs. player arena combat. Document and
explain why particular mechanics work to motivate the end-user to perform
these tasks, and to assist the goals of the developer/business.
Submit your answer to the course website. Students will be encouraged to
review and comment upon each other’s submissions.
3. Psychological Underpinnings (in person session)
Cognitive science of play; games and happiness; extrinsic vs. intrinsic motivations.
Application to business environments, and the significance of non-monetary motivation
mechanisms.
Read: Pink, Drive, Chapter 4 (Autonomy), 5 (Mastery) and Appendix
Watch: RSA Animation of themes from Drive
Optional: Deci, & Ryan, The What and Why of Goal Pursuits
Assignment: Play one of the major Facebook games developed by Zynga: Farmville,
Mafia Wars, Frontierville, or Cityville. Identify three specific elements of
the game and explain in one page how these elements stimulate user
engagement and revenue generation for Zynga. Submit your answers to the
course website.
In Class: In addition to reviewing the literature on self-determination theory and
intrinsic motivation, we will (1) examine some traditional business practices
that implement the lessons of the psychological literature, and (2) categorize
the game mechanics that we have studied along the axes of the
psychological literature.
4. Tools for Gamification (web-based lecture)
Gamifying sites vs. companies; “gamification in a box” solutions (BigDoor, Bunchball,
Badgeville, etc.); enterprise gamification (Seriosity); building gamification systems.
Watch: Zichermann, Fun is the Future (Google Tech Talk, November 2010)
Read: Zichermann & Linder, Chapter 3 (Social Networks & Leaderboards)
Robinson, Can’t Play, Won’t Play
Optional: Reeves & Reed, Total Engagement, Ch. 3 (Problems Games Might Solve)
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5. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
Assignment: Spend some time using the Foursquare application
(http://www.foursquare.com), either through the web interface or,
preferably, on your iPhone or Android smartphone. Foursquare is a social
location service that allows you to “check in” to places you visit, with heavy
use of game mechanics. Consider the following questions:
• How does gamification enhance Foursquare’s service?
• Do Foursquare’s game mechanics limit the market for its service?
• What is it about Foursquare’s implementation of points, badges, and
leaderboards that makes them particularly effective?
Team Exercise: Using the mechanics of Foursquare (and only Foursquare), do a paper
design of a game system that meets one business challenge in an industry
that you’re familiar with.
5. Whose Game is It, Anyway? (In person session)
Application of intellectual property law to user-generated content; legal enforcement of
online terms of service; open source and Creative Commons licenses; property rights in
virtual assets; taxation of virtual goods.
Read: Hunter & Lastowka, The Laws of the Virtual Worlds
MDY v. Blizzard
Assignment: Review the opinion in MDY v. Blizzard. Answer following questions, and
submit your answers to the course website:
• Should a game developer have unfettered control over uses of its game?
• What arguments might be made on the other side?
• Is it a good strategy for companies employing game mechanics to use
contractual terms of service to exercise strict control over users?
• How might firms encourage user creativity but protect their assets?
Team Exercise: Submit the name of the company that your team will gamify for your
final project. Present a Powerpoint discussion of the problem faced by the
company, and a one slide explanation of how your project will use game
mechanics to address the problem.
6. Games and the Law (web-based lecture)
Scope of gambling/sweepstakes laws; rules designed for protection of children; privacy
considerations in use of user data; comparison of U.S. and global regimes; sectoral rules
for finance and health care.
Read: Lastowka, Virtual Justice, Chapter 6 (Games)
Zichermann & Linder, Chapter 5 (Prizes and Games of Chance)
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6. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
Team Exercise: Present the initial functional specification for your gamification project.
The specification should discuss any legal issues that might emerge in the
final game design.
In Class: In addition to covering the topics for this session, we will examine the legal
issues faced by each of the student projects.
7. Games in Business: What We Know and Don’t Know (in person session)
A guest lecture by Prof. Ethan Mollick (Management) on the business applications of
games.
Read: Edery & Mollick, Changing the Game, Ch. 1 (Into to Games)
Von Ahn, Games with a Purpose
Class Prep: Consider the following questions in preparation for the guest lecture:
• How would you assess the effectiveness of a gamification project?
• How much reliable data about specific business benefits would you
want to see before going forward with a games-based activity?
In Class: Professor Mollick will share some of his research and discuss the state of
data about the effectiveness of business games and gamification.
8. Serious Games (web-based session)
Games for simulation and training; research applications; educational games and
gamification within education; Alternate Reality Games (ARGs); games to tackle major
social problems.
Watch: McGonigal, Gaming Can Make a Better World
Read: Edery & Mollock, Chapter 6 (Three Skills for an Interconnected World)
Thomas & Brown, Why Virtual Worlds Can Matter
Assignment: Play either MindSnacks (http://www.mindsnacks.com), a mobile learning
game, DailyFeats (http://www.dailyfeats.com), a social networking site to
reward positive actions, or Darfur is Dying (http://www.darfurisdying.com/),
a simulation of Darfur refugee camps. Answer the following questions, and
submit your answer to the course website:
• Is a game less fun if it’s designed for doing good?
• What problems are serious games trying to address? Do they do a good
job of this?
• What lessons can the business community draw from serious games?
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7. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
9. Prizes and Competitions (web-based lecture)
The multiplier effect of prizes; designing effective prizes and competitions; the big picture.
Read: Kamenetz, Power of the Prize
Class Prep: Consider the following questions in preparation for the guest lecture.
• How do prizes change the dynamics of contests?
• What sorts of projects lend themselves best to prizes?
• Are there special consideration for gamification projects by
government entities?
In Class: The class will be presented by Robynn Sturm, Special Assistant to the
Director, Office of Science and Technology Policy, the White House. Ms.
Sturm works on the design of X-Prizes for high-value public policy and
social engineering issues. In class we will undertake a worked example of
designing a prize/competition for high-stakes business problems.
10. Ethical Considerations (web based lecture)
Gamification as stealth marketing or manipulation; commercialization of play;
uncompensated servitude or “digital sharecropping”; concerns about digital autonomy
and misdirection.
Read: Reeves & Read, Chapter 11 (Danger)
Petersen, Loser Generated Content
Doctorow, Anda’s Game
Optional: Zittrain, Ubiquitous Human Computing
Team Exercise: Each team will give a presentation discussing the ethical issues with
their project, and address the ways in which they have or will ensure that
any ethical issues will not become a marketing and PR issue upon release.
11. Student Presentations (in person session)
Each team will present its full proposal for gamification of a real company or website
before a mock meeting of the company’s board of directions. Other students will critique
the presentations.
12. Gamifying the World (in person session)
The future of gamification; intersection of games with mobility/location; how far will
gamification go?; course review and wrap-up.
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8. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
Watch: Jesse Schell, Design Outside the Box
Seth Priebach, The Game Layer on Top of the World
Read: Dignan, Gamification Meets “Workstreaming”
Assignment: Think about what gamification and the use of games in business will be like
in the year 2021. Write an essay explaining one thing that you think will be
the same, one thing that will be different, and one currently uncertain or
unknown factor that could change the outcome significantly. Submit your
essay to the course website.
Keep in mind that some things change faster than you think, and others
change more slowly. Ten years ago, the Internet was a mainstream
phenomenon and broadband deployment was beginning to accelerate; but
Google was a small startup, Apple was in dire straights, mobile phones had
only crude text-based data capabilities, and Facebook didn’t exist.
Course Requirements and Grading
As noted above, in addition to regular class meetings, students will be expected to attend
online video lectures and to utilize social media tools to participate in online interactions.
Individual Assignments (25%)
Many of the class sessions have required assignments, such as an analysis of particular game
mechanics. These will be submitted to the course website and graded.
Team Exercises (15%)
Several of the class sessions have exercises to be done in teams, developing building blocks
for the final project.
Team Presentations and Papers (30%)
Teams will be graded as groups for their final gamification project submission. This
assignment includes an in-glass presentation to be critiqued by other students, as well as a
paper detailing the business goals, mechanics, and design choices for the proposed
implementation.
Participation (30%)
This is an inherently interactive course. More than mere attendance is expected. Students
will be assessed on their participation in both in-person class sessions as well as a variety of
online resources, including course blog posts, course Twitter/Facebook feeds, comments on
others' blog posts, and the course’s Gamification wiki.
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9. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
Reading List (alphabetical by author)
• E. L. Deci & R. M. Ryan, The 'What' and 'Why' of Goal Pursuits: Human Needs and the
Self-Determination of Behavior, 11 PSYCHOLOGICAL INQUIRY 227 (2000)
• Larry Dignan, Gamification Meets “Workstreaming,” ZDNET BLOG, March 2011
• Cory Doctorow, Anda’s Game, in OVERCLOCKED: STORIES OF THE FUTURE PRESENT
(Running Press 2007)
• David Edery & Ethan Mollick, CHANGING THE GAME: HOW VIDEO GAMES ARE
TRANSFORMING THE FUTURE OF BUSINESS (FT Press 2009)
• Byron Reeves, Thomas W. Malone, and Tony O’Driscoll, Leadership’s Online Labs,
HARVARD BUSINESS REVIEW, May 2008
• Juho Hamari & Vili Lehdonvirta, Game Design as Marketing: How Game Mechanics
Create Demand for Virtual Goods, 5 INTERNATIONAL JOURNAL OF BUSINESS SCIENCE AND
APPLIED MANAGEMENT 14 (2010)
• Dan Hunter & F. Gregory Lastowka, The Laws of the Virtual Worlds, 92 CALIFORNIA
LAW REVIEW 1 (2004)
• Johan Huizinga, HOMO LUDENS (Beacon Press 1955)
• Anya Kamenetz, Power of the Prize, FAST COMPANY (May 2008)
• Greg Lastowka, VIRTUAL JUSTICE: THE NEW LAWS OF ONLINE WORLDS (Yale 2010)
• Thomas Malaby, Beyond Play: A New Approach to Games, 2 GAMES AND CULTURE 95
(2007)
• Jane McGonigal, REALITY IS BROKEN: WHY GAMES MAKE US BETTER AND HOW THEY
CAN CHANGE THE WORLD (Penguin Press 2011)
• MDY Industries v. Blizzard Entertainment (9th Cir., Dec. 14, 2010)
• Søren Mørk Petersen, Loser Generated Content: From Participation to Exploitation,
FIRST MONDAY, March 2008
• Daniel H. Pink, DRIVE: THE SURPRISING TRUTH ABOUT WHAT MOTIVATES US (Riverhead
Books, 2009)
• Byron Reeves & Leighton Reed, TOTAL ENGAGEMENT: USING GAMES AND VIRTUAL
WORLDS TO CHANGE THE WAY PEOPLE WORK AND BUSINESSES COMPETE (HBS Press
2009)
• Margaret Robinson, Can’t Play, Won’t Play, HIDE AND SEEK BLOG (October 6, 2010)
• Jesse Schell, THE ART OF GAME DESIGN: A BOOK OF LENSES (Morgan Kaufmann 2008)
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10. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011
• Douglas Thomas and John Seely Brown, Why Virtual Worlds Can Matter, 1
INTERNATIONAL JOURNAL OF LEARNING AND MEDIA 1 (2009).
• Luis Von Ahn, Games With a Purpose, IEEE COMPUTER, June 2006
• Gabe Zichermann & Joselin Linder, GAME-BASED MARKETING: INSPIRE CUSTOMER
LOYALTY THROUGH REWARDS, CHALLENGES, AND CONTESTS (Wiley 2010)
• Jonathan Zittrain, Ubiquitous Human Computing, 366 PHILOSOPHICAL TRANSACTIONS OF
THE ROYAL SOCIETY 3813 (2008)
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