Michael Wu, Ph.D. is Lithium's Principal Scientist of Analytics, digging into the complex dynamics of social interaction and group behavior in online communities and social networks.
Michael was voted a 2010 Influential Leader by CRM Magazine for his work on predictive social analytics and its application to Social CRM.He's a regular blogger on the Lithosphere's Building Community blog and previously wrote in the Analytic Science blog. You can follow him on Twitter or Google+.
Gartner predicts that by 2015, more than 50% of the organization will gamify their innovation processes. Only time will tell if this prediction is accurate or not, but what is certain is that gamification will become more prevalent and more pervasive throughout our lives.
So this brings up an interesting question. What happens when you gamify everything in life? Will people really do everything we want them to do? This just sounds a little too good to be true! Intuitively, it seems likely that at some point, consumers must get tired of gamification. They will probably get into a state of point/badge fatigue and start to resent any type of gamified activity. This is known as the gamification backlash.
So the million dollar question is, “Whether gamification can be a long term business strategy?” And if so, how? This is precisely the question we wanted to address at the Wharton Gamification Symposium.
The Gamification Backlash: No Games Last Forever
IMHO, no single gamification strategy can bring long term sustainable values, because no games can last forever. Even avid gamers rarely play the same game for an extended period of time. Games that were once fun, may appear very boring and stupid now. People change and move on; games, as well as gamification, must adapt. Otherwise, you risk the big backlash.
A gamification backlash is often caused by the blind use of points and badges, which are extrinsic rewards. Since extrinsic incentives will ultimately decrease a person’s intrinsic motivation for the gamified behavior (a phenomenon known as overjustification). When extrinsic rewards can’t keep up, you get the backlash. Although there are gamification techniques that leverage intrinsic motivation, most commercial applications use extrinsic incentives. These include perks, special privileges, and cash prizes, which are only feasible up to a certain scale; then there are points and badges, which are virtual and scalable to the entire social web. Nevertheless, these are all extrinsic rewards, and as such, they are NOT sustainable.
Overjustification: The Moral Hazard of Game Play
One of the greatest dangers of gamification is that people may become too focused and entrenched in the actual game play (i.e. the game mechanics and game dynamics) rather than the gamified activity. Prof. Jesse Schell from Carnegie Mellon calls this the moral hazard of game play. This is precisely the overjustification effect. Although this phenomenon may sound counterintuitive, it is very real. It is well-documented in the experimental psychology literature, and books have been written about it (see Punish by Rewards).
Several psychological mechanisms have been proposed as the underlying reason for this seemingly strange human behavior. I will talk about two here:
This poses a serious problem for gamification, because most gamifications in business use external incentives that will ultimately lead to the moral hazard of game play. A classic example of these backlashes is that when the external incentives can no longer keep pace with the users’ expectation, they will lose all their motivation to perform the gamified behavior. That means, they will become harder to motivate and more resistant to doing the task that you want them to do. And if this happens a few times, user will quickly learn the recurrent theme and develop a psychological barrier to all your future gamification strategies. When that happens, it’s game over... and you lose!
Making Gamification Sustainable
Although any one gamification strategy is not sustainable, it does work in the short term. In fact, it works very well during a short period of time (i.e. its effective window). This is why the churn rate on Foursquare is so high, and it remains very high. With this understanding, there are two effective strategies that can lengthen the effective window of your gamification. Both strategies use extrinsic rewards with gamification to jumpstart some activity.
In strategy #1, while the player is carrying out the gamified activity, he creates something that has long lasting values. When the player begins to realize these values, the extrinsic rewards will become less important to him. The whole reward system becomes secondary and serves to reinforce the value he creates, which will become the primary motivator. Subsequently, the long term value created by the player (together with the secondary extrinsic reward) will self-reinforce the gamified activity. This creates a positive feedback loop that ultimately turns the gamified activity into something intrinsically motivating for the player.
So even though gamification doesn’t work long term, it doesn’t have to. It just has to work long enough for the player to realize the value he creates. The crucial requirement for this strategy to work is that the gamified activity must create something that has long term value to the player. In other words, gamification won’t fix your business problem, if your products and services don’t bring enough value to the customers. In fact, blindly applying gamification may even lead to adverse consequences. You may still drive a huge increase in awareness, but everyone will be aware of how bad your brand is.
In strategy #2, while the player is performing the activity, he leaves behind many digital footprints in the form of activity data. All of these data must be recoded and analyzed, because this strategy attempts to discover the intrinsic motivation of the player through data analysis and statistical inference. Then external rewards are used only as secondary motivators to reinforce the inferred intrinsic motivation of the player.
Again, gamification doesn’t need to work long term in this strategy. It just needs to work long enough for the gamification platform to collect enough data to accurately infer the player’s intrinsic motivation. This strategy is quite challenging, and there are three basic requirements for it to work.
This post covers a lot of concepts. It is quite involved and getting a bit long. So I will stop now and save the examples and case studies for the next post.
So far, we talked about two problems that gamification will encounter in the near future. In fact, some would say that the gamification backlash has already started.
So it seems that gamification can’t possibly be sustainable; and therefore it cannot be a long term business strategy. It is unfortunate, but this is the fact of life: Gamification won't solve your business problem; it only solves your (short-term) engagement problem. Gamification alone will not work in the long term, especially those that use extrinsic rewards.
However, there are also tried and true strategies that employ gamification in a sustainable fashion. The key realization is that gamification doesn’t have to work long term to create sustainable value. It just has to work long enough for some other processes to take over as the primary driver of value. Subsequently, gamification will become a secondary reinforcement system that facilitates the primary value drivers.
Next time, we will look at some examples of these strategies at work. In the meantime, I welcome any comments and criticisms. As usual, kudos are always welcome if you like what I wrote. I hope to see you next time.
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.