A discussion of the gamification trend and how it has developed over the past year.

1. Robin D. Steele
The Development of Gamification
Professor Eric Brey
April 10, 2012

2. Basic Overview
Sports are such an important part of culture because people thrive on the spirit of
competition. Although certain sports are more popular given the preferences of the region the
desire to win is the same regardless of cultural differences. Companies have now found ways to
integrate this spirit of competition into their business models to promote their brand and
ultimately increase profits. This trend is known as gamification and is defined as “the use of
game design techniques, game thinking and game mechanics to enhance non-game contexts”
(Bersin). Although this is not a completely new concept its emergence has spread quickly over
the past year and it is predicted that 50% of organization will gamify their innovation processes
by 2015. The basis of gamification is to make technology more engaging by encouraging users
to increase their engagement through a systemized gaming process that is challenging, yet
rewarding to users who complete the tasks. This technique can encourage consumers to engage
in tasks that are usually seen as boring such as completing surveys, reading web sites, and
inputting data. It was first seen in the hospitality sector through hotel loyalty clubs and airline
frequent flier programs. As traditional forms of marketing continue to fail companies are turning
to more unique techniques such as gamification to increase customer loyalty and overall
engagement with the brand.
There are various game mechanics that are used which fall under the gamification trend.
The point system is one of the most common because it can be used in so many different ways to
signify achievement and also to compare a person’s performance to their peers. For example,
Health Month is a site that asks its users to set up weekly health goals and stick to them for an
entire month. Each user starts with 10 “life points” and the goal is to end each month with at
least one life point. The key is that every time the user breaks a rule they lose a point, but friends
can also trade points if a user runs out of points for the month. This system promotes
competition, but in a more friendly way because users are encouraging each other to not break
their rules, while still being able to view their performance in comparison to others. Another
game mechanic that is similar to points is badges, which was made popular by sites such as
Foursquare to signify a person’s level within the game. Many times users are ranked on a
leaderboard to encourage competition amongst friends. It is also important that the game
mechanic be challenging in order to engage users, so many companies create actual challenges
for users to complete to gain a specific reward. Starbucks rewards its users with virtual points
and badges for completing tasks such as checking in to five different retail locations on
Foursquare. After completing the task the user is rewarded with a free or discounted beverage in
exchange for their efforts. Challenge is what fuels competition because even if the reward is
small people automatically want to win. Many psychologists argue that a reward is not
necessary, but rather people will be motivated by the pure spirit of competition (CITE).
Consumers are motivated by these game mechanics because of game dynamics. This
fundamental need for rewards, status, achievement, and competition among other things all work
together to motivate consumers toward a certain behavior. It is important that companies
integrate these dynamics into their business models to create an experience that drives behavior
by satisfying one or more of these human needs. The goal is to engage consumers and get them
to participate, share, and interact in some activity or community.

3. Examples of Gamification
Gamification has made a great impact on the business world because it is a technique that
crosses cultural boundaries and exploits the natural competitive spirit within all people. There
are basic implementations of this trend that have been present for years, such as loyalty
programs. It is only recently that companies have used gamification as a tool for customer
engagement and encouraging desirable website usage behavior.
Pepsi-Sound Off
Pepsi adopted the use of gamification when it created a gamified social network centered
on the TV show The X Factor. Because Pepsi is the main sponsor of the show they wanted to
increase television ratings, which would in turn increase their brand presence in the homes of
consumers. The Pepsi Sound Off platform allows fans of the show to connect with each other
and see what others are talking about without disturbing the normal conversation taking place on
other sites such as Facebook and Twitter. As soon as a user signs in using their social ID they
have the opportunity to gain “caps” which act as badges to reward users with social standing
within the larger community. The more a user engages with the site and shares back to their
social network, the more caps they receive. Fans can vote for the best post and the most popular
posts rise to the top of the Sound Off site, which gives users a chance to be mentioned on the
actual show. Because of its success the Sound Off site has expanded to include other shows such
as Dancing with the Stars and The Voice, where Pepsi is also a sponsor (“Pepsi”).
This is a great way of using gamification to increase customer loyalty because it
incorporates several of the game mechanics into one social platform. These mechanics result in
various dynamics that act as motivators for consumers to interact with the brand. Pepsi should
continue this social integration by creating commercials that are based on the activity of this
social platform. Everyone wants to be recognized on a national commercial, so Pepsi should
follow this momentum with a campaign to find the best Sound Off user. This will expand the
brand by gaining users outside of these shows and attract more users who want to compete for
this recognition. This type of social platform can be used in any other industries where users
share a common interest and desire an outlet for expression. For example, ESPN could create its
own social platform for sports fans to discuss their interests and also make predictions regarding
game winners. Those with the highest prediction rates could be awarded sports badges and listed
on a leaderboard that runs across the ESPN network screens at a given time. This would motivate
fans to become more engaged in the games and in turn they would be more engaged with ESPN.
The Huffington Post
The gamification trend has also appeared in the conservative publishing industry as a way
to engage readers. The Huffington Post has created a social news service called “Predict the
News,” which allows users to respond to questions accompanying an article. Most questions are
either yes or no responses or they involve selecting an option from a list of possible outcomes.
Points are then awarded to the users who correctly guessed the event once it has passed. For
example, The Huffington Post may post an article on the upcoming election and all of the
potential candidates. At the end of the article there is a question that asks “Will Sarah Palin run
for president in 2012?” Users will respond to this question and once the event has passed those

4. who correctly guessed the answer will receive points. These points are used to create a
leaderboard of users who best predict the news. Although this is a good tool for consumer
engagement, there are critics who argue that this type of tool compromises the integrity of the
industry. Publishers want to make sure that the information they deliver is received in a serious
manner, rather than for gaming purposes. So far there is very little participation on the Predict
the News service, but the company believes that it will be an important factor in increasing
engagement in the future (Davis).
There are certain industries that are more serious than others, so the term “gamification”
will not always be well received. Despite these concerns, there is a place for this trend in the
publishing industry because there must be an audience present to receive the news. There are
already comment boards available on most news sites, so this prediction component is just
another form of engagement. The Huffington Post could expand its service by incorporating a
sharing component and rewarding points to users who have friends that comment on the article
or participate in the prediction question. This type of social news service could also be
applicable in the finance industry where people could predict the movement of stocks. Of course
this occurs in real-life, but from a social side it could be used to get more people interested in the
stock market by first playing in a game environment before making actual investments.
The Future of Gamification
Gamification is a trend that has progressed at a rapid pace, with virtually all of the major
brands having some element incorporated in their business model. Because it stems from basic
ideas such as loyalty points which have been around for years, many industry professionals have
reduced this emerging trend to only being a fad. They believe that gamification is a buzz word
that is the result of new technology companies trying to reinvent the wheel of customer retention.
Critics argue that the gamification of business and virtual worlds creates an expectation among
people that real-life interactions follow these simple mechanics, which creates a kind of
disillusionment for the user. New York Law School professor Dan Hunter believes that
gamification is the next big trend to be used by companies around the world to reach their
customers on a deeper level. He does not completely disagree with critics in that gamification is
partially motivated by its hype, but still believes that it is a viable business strategy. “The critics
are right in that gamification is a hype word and soon we won’t talk about it as a separate entity.
My argument is that any good marketer must know what their customers will respond to and
gamification is just an extension of this knowledge. It’s been around for years in isolated
elements, but we are finally starting to see businesses integrate it into their model and experience
higher levels of customer engagement” (Hunter).
It is true that the market for gamification is growing rapidly. “EMarketer projects that
social-gaming ad revenue was $368.9 million in 2011, with about 46% of that coming from the
U.S. It forecasts that the market will grow to $672.2 million by 2014” (Delo). With this growth
technology startups such as Gigya have emerged to provide a variety of social networking
technologies for websites. Their goal is to make every website social by integrating the
gamification mechanics that drive consumer engagement. There is also an increased focused on
the education of gamification, which will be crucial to its survival. Professor Hunter along with
Professor Kevin Werbach taught a new MBA course at the Wharton School of business that is
based on the gamification topic. “It is vital that people not only understand what gamification is,
but how to properly implement it into an existing business model. We are moving toward an era

5. of integration where if a component is not properly implemented it could ruin the whole system”
(Hunter). As Hunter explains the gamification trend may no longer be recognized once it
becomes fully integrated into business models, but its impact will be noticed for years to come
(Goodman).
Because gamification is centered on customer engagement it is applicable in almost every
industry and consumer segment. Marketing is defined as the process of communicating a
message to consumers, but in order to deliver these messages consumers must be receptive and
in a position to receive the message. Gamification is simply a tool that can be used to attract
consumers by sparking their interest in competition. Hunter explains a unique application in the
political environment where the Obama campaign has created a competition by challenging its
supporters to knock on the most doors and raise the most funds for the campaign. Their progress
is tracked on a leaderboard that is available to all of the campaign workers, so that they can
monitor how they are doing against other workers. Even though there is no real winner in the
race it shows how competition can encourage a certain behavior. Hunter believes that more and
more companies will adopt this strategy because of its low-risk and high rewards. “There really
is nothing to lose by implementing this strategy because a reward isn’t necessary to motivate
behavior. In my opinion the competition is better with no reward because it relies on intrinsic
motivation” (Hunter). As long as a company has the ability to implement the structure of the
game the consumers will fuel the interaction and ultimately promote the brand.
Another great example of how gamification has made an impact in a particular industry is
the presence of games in medical research. A game developed by the University of Washington
called “FoldIt” was designed to aid in scientific research by allowing users to play with the
structure and shape of proteins. The game is designed to utilize the human ability to solve
problems by predicting protein structures in order to design drugs for them. This is fundamental
to the study of AIDS, which is developed through these protein structures. Players are awarded
points based on their ability to correctly predict the structure and they are ranked on an overall
leaderboard which shows their rank against other players. This game design has proven to be
effective because Foldit credits one of its users with solving a long standing problem associated
with AIDS research. “A problem that has puzzled scientists for years only took gamers three
weeks to solve” (“Gamification used”).
These examples show that gamification is indeed a business worthy trend that will be
used by many different industries. Moving forward the trend will become a natural component
of business (specifically marketing) that is not only implemented by companies, but taught as
part of the basic business education. Hunter describes the importance of tech companies and how
he believes they will also be integrated within companies, rather than outsourced. “Software
designers are only going to become more important in the future and companies will realize that
it is cheaper to integrate them into their companies rather than paying them to constantly
maintain these sites. I don’t expect to see companies such as Gigya and Bunchball around for
very long” (Hunter).
Gamification is a unique tool because it can encourage consumers to engage in behavior
that they wouldn’t normally do. This is intriguing to many marketers because it provides the
opportunity to reach them in a way that is not usually feasible. It can also be used internally to
motivate employees to engage in a specific behavior. This is an important factor for any
company because employees are what make the company and their level of motivation effects
business operations. In order to stay ahead of the competition companies must determine how to
successfully integrate gamification into their business model. Successful implementation will

6. motivate consumers to interact with the brand and motivate employees to create optimal brand
value for the consumers. Once these two sides of the business are operating in sync the company
will have a competitive advantage that is difficult to emulate.

7. Works Cited
Bersin, Josh. “Game On.” Chief Learning Officer. Business Source Premier. Feb. 2012 Vol. 11
No. 2 pp. 16-17.
Davis Kho, Nancy, “Getting Gamified.” Business Source Premier. March 2012, Vol. 35, No. 2
pp. 20-24.
Delo, Cotton. “What is gamification, and how can I make it useful for my brand?” Advertising
Age. Business Source Premier. Feb. 2012. Vol. 83 No. 9 pp. 58-59.
“Gamification Used To Successfully Solve AIDS Research Problem.” Simply Zesty. Online PR
& Social Media. 19 Sept. 2011.
Goodman, James. “Expert: Technology is more than a game.” Democrat and Chronicle.com. 30
March 2012. < http://www.democratandchronicle.com/article/20120330/NEWS01/30330
0045/Expert-Technology-more-than-game>
Hunter, Dan. Telephone Interview. 3 April 2012.
Pepsi Unveils New Social TV Platform, Pepsi Sound Off and Social Media Visualization Tool,
Pepsi Pulse." PR Newswire 19 Oct. 2011. Academic OneFile. Web. 10 Apr. 2012.
http://go.galegroup.com/ps/i.do?id=GALE%7CA272874408&v=2.1&u=tel_a_uofmem&
it=r&p=AONE&sw=w

8. Interview Results – Professor Dan Hunter
How would you define Gamification?
The use of game mechanics in non-game settings. A good example would be loyalty points
that motivate people to do things or buy things. Typically this results in them buying things
that they wouldn’t normally buy. Another form that has been used for many years is
employee of the month. People love to be recognized even if it’s for something small such as
coming to work every day. Companies are now finding ways to capitalize on these needs.
When did Gamification become an actual business practice that could be used to increased
profits?
Overall it’s the general process of appealing to people’s fun side. It’s a practice. We’ve had
elements for years, but now the practice of designing elements that motivates people through
competition is becoming more prevalent. It’s finally starting to stand-along as its own entity,
whereas in the past there were only bits and pieces of this trend being practiced.
Who and when was the first company to implement the techniques behind Gamification?
Like I said it’s been around for years in the form of frequent flier miles and similar programs.
The actual term came from a conference that was held about 2 years ago. This is when people
finally started seeing how gamification could be used in other forms of business, so they
wanted to meet with like minds to discuss the possibilities.
Can you give some good examples (recent) of companies who have effectively implemented
Gamification and seen great benefits?
One of the most interesting implementations that I’ve seen recently is how the Obama
campaign is making a competition out of fundraising. They are challenging their supporters
to knock on the most doors and raise money and they are tracking how much money they are
raising on an actual leaderboard. Some people may think why would people want to create an
internal competition, but it’s a great way to motivate people. There really is nothing to lose
by implementing this strategy because a reward isn’t necessary to motivate behavior. In my
opinion the competition is better with no reward because it relies on intrinsic motivation
Sometimes people are looking for a reason to get involved and they feed off of the need to be
competitive. I wouldn’t be surprised if more candidates used this strategy because it does
work, we’ve seen that.
What are potential applications of Gamification in business, specifically marketing?
There really is no limit to how gamification can be used, but to be clear it is important that
we are only talking about customer engagement. The purchase process is a whole different
issue that most likely will not be affected by the game itself. It’s about customer engagement
and retention, but what you do once you have the customer is completely different for each
company.
What is the first step in implementing gamification?

9. There is no blue print that explains how to implement gamification, but rather a company
must think about the different ways they can engage their customers. You first have to know
who your customer is before you learn how to engage them. After that it’s just about trying
some creative ideas and finding the right mix of game mechanics that will spark those
dynamics. Every platform will work differently given the consumer, but usually it is low-cost
to implement so a company can afford to make a mistake or two.
How do you respond to critics who say Gamification is just a buzzword and that it will
eventually be known as a fad?
Hahaha. They are probably right! The critics are right in that gamification is a hype word and
soon we won’t talk about it as a separate entity. My argument is that any good marketer must
know what their customers will respond to and gamification is just an extension of this
knowledge. It’s been around for years in isolated elements, but we are finally starting to see
businesses integrate it into their model and experience higher levels of customer engagement.
I don’t understand what the hype is about myself because this isn’t really new, but whenever
a company starts making money in a way that they didn’t before it’s going to be labeled as
new. Soon we won’t talk about gamification as a separate thing. It’s just a mechanism of
getting people engaged and to enjoy the brand.
How will Gamification be used moving forward?
It is vital that people not only understand what gamification is, but how to properly
implement it into an existing business model. We are moving toward an era of integration
where if a component is not properly implemented it could ruin the whole system, so
education will be crucial. As the trend itself becomes more integrated it only makes sense
that the structural design will follow suit and become integrated as well. Software designers
are only going to become more important in the future and companies will realize that it is
cheaper to integrate them into their companies rather than paying them to constantly maintain
these sites. I don’t expect to see companies such as Gigya and Bunchball around for very
long. All in all gamification has a bright future and it will only become more important
moving forward. Even though it will probably lose its name because that was a result of the
hype, its impact will affect the business world for quite some time.

10. Interviewee Biography – Professor Dan Hunter
Dan Hunter is an expert in internet law, intellectual property, and artificial intelligence and
cognitive science models of law. He joins the New York Law School faculty from the University
of Melbourne Law School (Australia) and the Wharton School, University of Pennsylvania. He
holds a Ph.D. from Cambridge University on the nature of legal reasoning, as well as computer
science and law degrees from Monash University (Australia) and a Master in Laws from the
University of Melbourne.
Hunter, who taught an MBA course on gamification at University of Pennsylvania’s Wharton
School, is a recognized speaker and teacher in areas such as Internet law, intellectual property,
and artificial intelligence and cognitive science models of law.
He also is listed as a legal and policy analyst for RIT’s Just Press Play, an achievement-based
gamification project funded in part by Microsoft that encourages students to engage in social,
academic, creative and collaborative activities.
He regularly publishes on issues dealing with the intersection of computers and law, including
papers dealing with the regulation of virtual worlds, the use of artificial intelligence in law, and
high technology aspects of intellectual property. His research has appeared in journals such as
the California Law Review (three times), the Texas Law Review, the William & Mary Law
Review, and the Journal of Legal Education. He is the co-author of one book (Building
Intelligent Legal Information Systems, Kluwer 1994), is a judge for the resolution of domain
name disputes for the World Intellectual Property Organization, and is on the editorial board of
numerous journals. His work has been supported by grants from the National Science
Foundation, the MacArthur Foundation, and the Australian Research Council. He is the recipient
of a Fulbright Fellowship, an American Council of Learned Societies Research Fellowship, a
Herchel Smith Research Fellowship in Intellectual Property Law, and a Science Commons
Fellowship.
He was one of the first scholars to examine the social significance of virtual worlds, co-founded
the scholarly blog Terra Nova (terranova.blogs.com), and ran the 2006 State of Play/Terra Nova
Conference at New York Law School, and the 2007 State of Play Conference in Singapore. He
will convene the 2009 conference back in New York.
His current projects include examination of the economics and laws relating to user-generated
content, and the social significance of luxury handbags.
http://www.nyls.edu/faculty/faculty_profiles/dan_hunter/