Gamification 101:

An Introduction to Game Dynamics

 Gamification—the application of game mechanics into non-
game activities and processes—is a proven, powerful strategy for
engaging, influencing and motivating diverse groups of people.
The business community has just begun to realize the power of
gamification to enhance customer interaction, build loyalty, and
incentivize employees and partners. And the concept has the
potential to solve a variety of obstacles outside the traditional
business environment as well, in areas such as Health & Wellness,
Education & Training and Public Policy & Government.

Understanding how and why gamification works, and in what contexts it is most
effective is essential. This report will provide a definition, basic foundation and
value proposition for gamification in the following sections:

I. Introduction: Gamification Defined

II. The Building Blocks of Gamification
III. The Business Value of Gamification
IV. Gamification: Use Cases
V. Key Questions and Best Practices of Gamification

Gamification Defined
At its core, gamification applies game mechanics to non-game activities to prompt
specific behaviors. In a business context, gamification is the process of integrating
game mechanics and dynamics into a website, business service, online community,
content portal, marketing campaign or even internal business processes, in order
to drive participation and engagement by target audiences.
The overall goal of gamification is to more deeply engage with consumers,
employees, partners and other audiences, and inspire them to participate,
collaborate, share and interact in some activity or community. A particularly
compelling, dynamic, and sustained gamification experience can be used to
accomplish a variety of mission-critical business goals.

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Game Mechanics & Game Dynamics
Game mechanics are the basic actions, processes, and control mechanisms that
are used to “gamify” an activity. They are the rules and rewards that make up game
play and create a compelling, engaging user experience. Game mechanics make
the activity challenging, fun, satisfying, or whatever other emotion the game’s
designers hope to evoke. These emotions, in turn, are the compelling desires and
motivations of the experience we call game dynamics.

GAME MECHANICS INCLUDE: GAME DYNAMICS INCLUDE:

—— Points —— Rewards
—— Levels —— Status
—— Challenges —— Achievement
—— Virtual goods and spaces —— Self-expression
—— Leaderboards —— Competition
—— Gifts and charity —— Altruism

Games Are Everywhere

FREQUENT FLYER PROGRAMS

Game mechanics are the basic actions, processes, and

control mechanisms that are used to “gamify” an
activity. They are the rules and rewards that make up
game play and create a compelling, engaging user
experience. Game mechanics make the activity
challenging, fun, satisfying, or whatever other emotion the game’s designers hope
to evoke. These emotions, in turn, are the compelling desires and motivations of
the experience we call game dynamics.

STARBUCKS

The world’s biggest coffee chain is rewarding users with virtual points
and virtual badges for visiting their retail stores. Starbucks enables their
customers to “check-in” at their retail locations on their mobile phones.
When they complete quests, like “visit five different Starbucks,” they
earn points. The points have no monetary value, and the badges don’t
have any real-world payoff. However, Starbucks provides a fun tool to get people to
visit their stores and buy more product.

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NIKE+ AND THE IPOD

The world’s largest athletic footwear manufacturer has

“gamified” exercise. Over 1.8 million runners use Nike+
to capture data such as distance, pace, and calories
burned using a GPS sensor connected to their iPods.
The Nike software rewards users when they reach a
milestone. After workouts, runners go online to upload data, track statistics, set
goals, join challenges, and connect with fellow runners in the Nike community and
other social networks. Nike+ has allowed the company to build a huge and active
fan base.

The Building Blocks of Gamification

Gamification drives participation and engagement by integrating game mechanics
and game dynamics into a website, service, online community, content portal,
marketing campaign or even internal business workflows. Gamification influences
behavior through the use of key concepts from a number of related areas,
including game design, customer loyalty programs, behavioral economics, and
community management.

GAME MECHANICS MOTIVATE BEHAVIORS

The addition of game mechanics to a site or application allows you to layer more
compelling user experiences into existing activities. These gamified activities
address and satisfy basic human desires, creating the addictive experiences that
motivate users to take specific actions, and to return more frequently.

Game mechanics are tools and techniques that act as building blocks for gamifying
a website, process or application. Used individually or together, they create a highly
motivational user experience around existing website functionality or content.
Some of the most common game mechanics include the following:

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1. POINTS
People love to earn and achieve points, making them incredible motivators. Points
can be used to reward users across multiple dimensions, and different categories
of points can be used to drive specific behaviors. Points can be used as status
indicators, users can spend them to unlock access to content, or spend them
on awards. Studies done at IBM Research and the University of Chicago have
illustrated dramatic effects that earning points can have on user behavior, even
when they have no monetary value. People simply want to be rewarded and feel
like they’ve gained something.

2. LEVELS
Levels are different classes in frequent-flyer programs, colored belts in martial
arts, job titles in industry: an indication that you’ve reached a milestone, a level
of accomplishment in a community, and should be afforded a certain amount of
respect and status. Levels are often defined as point thresholds, so that users can
automatically level up based on participation or usage to indicate status.

3. CHALLENGES, TROPHIES, BADGES, ACHIEVEMENTS

Challenges provide people with missions to accomplish and then reward them
for doing so. Challenges give people goals and the feeling they’re working toward
something. The general approach is to configure challenges based on actions that
you’re tracking, and reward users for reaching milestones.

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 Trophies, badges, ribbons, etc. are the visible recognition of having reached new
levels or completed challenges. One of the keys to making levels and challenges
effective is providing a forum for users to show off their achievements, like a
trophy case or user profile page that displays earned badges. Counterparts in the
real world include Scouting merit badges, colored credit cards that indicate high
spending limits, or gold frequent flyer cards that indicate member status.

4. VIRTUAL GOODS
For a game economy to be effective, it must have a place to spend points, provide
an incentive to earn more, and offer the ability to customize something that
reflects personal identity. Virtual goods help to achieve this and are a great vector
for creativity, competition, and self-expression in the community.
Virtual goods are non-physical, intangible objects that are purchased for use in
online communities or online games. Users purchase virtual goods like clothing,
weapons or decorations to create an identity for their virtual self while comparing
and “showing off” with their friends.

5. LEADERBOARDS
Most successful games have a “high-score table” to provide inspiration and also
indicate how each user is progressing against competitors. In the context of
gamification, leaderboards are used to track and display desired actions, using
competition to drive valuable behavior.

6. COMPETITIONS
Competitions enable your players to challenge each other for the high score at
some activity. Once everyone has completed the activity, the user with the highest
score wins a reward while the losers get consolation prizes. This is effective in
extending one-player games and other single user experiences for multi-player
use. For example: “I just scored 500,000 points at Asteroids; beat that!”

Game Dynamics Satisfy Desires

People have fundamental desires for reward, status, achievement, self-expression,
competition, and altruism, among others. These desires are universal, and
cross generations, demographics, cultures, and genders. Game designers have
known for years how to address these needs within gaming environments, and
gamification now enables these precepts to be applied more broadly. By wrapping
the appropriate set of game mechanics around your website, application, or
community, you can create an experience that drives behavior by satisfying one or
more of the following human desires:

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REWARD
Human beings are motivated by receiving rewards — something of value given for
some kind of action. A reward is presented after the occurrence of an action or
behavior with the intent to cause that behavior to occur again. With gamification,
the primary reward mechanism is through earning points or the equivalent.
Obtaining virtual goods, leveling up, and even completing achievements also satisfy
this desire.

STATUS
Most humans have a need for status, recognition, fame, prestige, attention and
the respect of others. All elements of game mechanics drive these dynamics, with
leveling-up being a primary motivator.

ACHIEVEMENT
Many people are motivated by a need to achieve, to accomplish something difficult
through prolonged and repeated efforts, to work towards goals, and to win. People
motivated by achievement tend to seek out challenges and set moderately difficult
(but achievable) goals. Their most satisfying reward is the recognition of their
achievements.

SELF-EXPRESSION
People often seek out opportunities to express their autonomy and originality, to
mark themselves as unique. This ties into the human desire to show off a sense of
style, identity, and personality and to create group affiliation. Virtual goods allow
players to create their own identity, whether earned through rewards, received as
gifts, or purchased directly. An individual’s avatar can act as a rich focal point for
expression.

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 COMPETITION
Individuals are frequently motivated by competition. It has been proven that
higher levels of performance can be achieved when a competitive environment
is established and the winner rewarded. We gain satisfaction by comparing our
performance to that of others. All elements of game mechanics tap into this desire,
but the use of leaderboards is central to display competitive results and celebrate
winners. Most games provide at least a top ten list, and using that public display
to indicate new levels achieved, rewards earned, or challenges met can be a great
motivator to all players.

ALTRUISM
Gift-giving is a strong motivator in a community where people seek to foster
relationships. Not all gifts are equal, so motivated gifters will seek out more
valuable forms of expression, either through money or through time spent earning
or creating the gift. In gamification, gifting is a powerful acquisition and retention
tool. Receiving a gift from someone pulls you into the game, and incentivizes you
to send gifts to your friends, creating an acquisition loop. Each time you receive
a gift, you are pulled back into the application to redeem it, serving as a powerful
retention vehicle.

The Business Value of Gamification

Engagement builds lasting relationships, impacts fundamental business objectives
and drives business value. When people participate and engage, they learn about
your business, your products, your services and they keep your brand top of mind.
They introduce your business to friends, familyand peers. They become customers
and they remain customers. These people become the backbone of your
business—repeat purchasers that act like a billboard for your brand. Gamification
can drive participation and engagement of every kind, including:

• Watching videos • Listening to audio

• Viewing photos • Opting in to email communication
• Creating content • Answering questions
• Making a purchase • Taking quizzes
• Searching for information • Sharing personal info
• Rating products • Reading articles
• Voting on content • Filling out registration data
• Writing comments • Participating in discussions
• Posting to forums • Taking a poll
• Visiting repeatedly • Visiting affiliated sites
• Recommending affiliated sites

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Tracking and Statistics Drive Participation
At its core, gamification is all about statistics. By capturing statistics,
communicating standings, and rewarding accomplishments, we create a method
to drive continuous and extended participation. Even though individual games
(or other activities) may have lost their initial excitement, each episode becomes
an entry into a larger game that creates a desire to make return visits in order to
reach new goals.
If two people play Monopoly every day for a week, it quickly grows boring. But if
they start capturing and displaying statistics — how many times each person won,
how many dollars each winner had, which properties were most profitable — then
the experience becomes more interesting. Statistics create another level to the
game and motivate people to play more.

The Audience for Gamification

Gamification is a strategy for influencing and motivating the behavior of people
–any people, whether they are customers, employees, partners, students, fans,
constituents, patients, and so on. Because it targets key human traits and desires,
the audience for gamification is virtually anyone you want to engage repeatedly
in order to elicit a particular behavior. The potential uses of gamification run
deep and wide across a multitude of industries, companies, divisions within those
companies, and individuals inside those divisions. The chart below just begins to
touch on the many diverse ways gamification can be used.

Wherever there are people, there are people to be motivated. Gamification can
be applied across a broad spectrum of situations where individuals need to be
motivated or incentivized to pursue specific actions or activities.
• Salespeople and channel partners can be incentivized to grow revenues and
focus on desired product mixes via competition and challenges.

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 • Call centers and customer support organizations can be motivated to deliver
superior customer service through a customer feedback mechanism or other
metrics.
• Employees can be motivated to pursue optional training initiatives that
enhance their careers and make them more valuable to the company.
• Patients and health insurance customers can be incented to adopt and
maintain healthy lifestyle choices that extend their lives and reduce healthcare
costs.

“Companies of all shapes and sizes have begun to

use games to revolutionize the way they interact with
customers and employees, becoming more competitive
and more profitable as a result.”

—— “Changing the Game”, David Edery, Ethan Mollick

Business Use Cases of Gamification

A key goal of business is to attract and engage a group of people with a common
passion or interest, and then “activate” them to purchase. Many marketers are
looking to leverage online social networking for this purpose, but the results have
been mixed. Adam Sarner, a Gartner analyst, has projected that over 75 percent
of Fortune 1000 companies will undertake some kind of online social-networking
initiative for marketing or customer relations purposes by 2014.
Through gamification, organizations can take control of their brand experience by
engaging users, encouraging them to join a community, drive active participation,
share with friends outside the community, and even recruite friends. Gamification
enables you to turn customers into fans, and fans into evangelists.

EXAMPLE: HOPELABS
HopeLab is an innovative organization whose mission is to drive healthy behavior
in young people. Fighting chronic illnesses like cancer, obesity, and depression,
HopeLab uses games and connected devices to create the most effective
motivational methods.
For example, the Zamzee device is worn on a belt or carried in a pocket, and it
monitors physical activity throughout the day. Plugging it into a computer, this
data is converted to points that can be redeemed for virtual goods and real-world
rewards. A pilot study showed that kids using the Zamzee device and website were
about 30% more active than those who did not.

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EXAMPLE: GLOBAL TECHNOLOGY COMPANY
A leading computer manufacturer recently launched a Facebook campaign to build
a community of tech-focused college students, with the goal of promoting their
educational computing site and selling more student laptops. To drive growth, they
created a gamified Facebook application that offered students a chance to win a
$5,000 scholarship and a free PC. To win, students had to earn points for doing
things like registering for the contest, inviting a friend to join, creating a team,
registering on the company’s educational computing site, and posting contest
messages and awards on their Facebook wall.
Six weeks after the launch of the gamified application, they had increased program
participation by 1,000%. Other success metrics from the campaign:

• 1 in 3 checked out the student laptop reviews

• 1 in 3 promoted the Facebook application
• 1 in 3 posted their award and new level
• 1 in 3 visited the educational computing site
• 1 in 4 recruited friends to help them
• 1 in 5 made the laptop their Facebook profile picture for a day 1 in 6
participants wrote and submitted an essay

EXAMPLE: GLOBAL CONSUMER PRODUCT

A European company opted to shift their marketing strategy for one of their top
Personal Care products to a “high engagement, online ecosystem” model. The
resulting program was a social networking application that connected participants
across the web. The goal for participants was to earn rewards by completing
challenges, such as viewing a series of web pages or playing mini-games on partner
sites. The game was designed to encourage long-term engagement of participants,
with repeat users earning frequent rewards.
The company attracted initial users via co-branding with a top-tier North
American professional sports league, and then grew the user base using viral
game mechanics that motivated participants to invite friends from their social
networks. Other game mechanics focused on activating fans, friends, and others
with brand purchases and trials via promotional integration. A microsite served
as the participants’ dashboard, providing a central location to customize their
avatar, view their progress, accept challenges and engage in social activities. The
experience further required repeat visits to the microsite, strengthening participant
association with the brand.

EXAMPLE: MAJOR ENTERTAINMENT COMPANY

One of the largest entertainment companies in the world wanted a loyalty
system that not only rewarded purchases, but also rewarded participation and

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 engagement with their content. This program gave points for purchasing Blu-ray
and regular DVDs as well as movie tickets. Buyers then redeemed those points for
dollar-value products, like more DVDs. In addition, members can earn credits for
engaging with their content, like watching movie trailers, visiting movie websites,
playing games, and contributing content. By combining offline purchase data with
online engagement and participation data, they can now build a detailed profile of
each of their customers. The resulting gamification campaign has:
• Increased consumption of promotional content
• Increased user-generated content
• Increased traffic to the individual movie sites
• Increased sale of products
• Developed a 360-degree view of their customers

Gamification:
Key Questions for Best Practices
Now that we have a basic framework for gamification, a solid best practices
program begins with a set of key questions to consider:

IS YOUR PRODUCT COMPELLING?

No matter the quality of the gamified experience, it’s only a wrapper around your
core offering. Gamification cannot make an inferior product successful, but it might
provide the tipping point that helps a good product find a larger audience, or turn
a hit into a cross-channel smash. Gamification works best when turning an exciting,
attractive product into a richer, more participatory one.

WHAT IS THE CONTEXT?

Will your audience discover your campaign on TV, in real-world stores, through
social media channels, in print ads, or somewhere else? How will your early users
help to grow your audience and through what means? Just as savvy advertisers
connect TV, online, print, and other campaigns, consider how to extend the reach
of the gamification process into other avenues.

WHAT IS THE TIMEFRAME?

Gamification should be thought of as an extended process -- the most engaging
games offer an experience that unfolds over time. This can be accomplished by
making a deep and rich experience from the outset, or by evolving the experience
over time, building its audience and drawing experienced users deeper into the
game. Gamification is a long-term strategy, not a launch-and-leave-it one.

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TIME TO MARKET?
How soon do you need to gamify your site or application? What level of effort will
be required to do this? Do you have the necessary resources to support, operate,
and enhance your gamification solution over time? What kind of expertise do you
have in-house to make this happen?

WHAT IS SUCCESS?
Most important is to have a clear sense of what your business goals are and how
you’ll go about determining if you’ve achieved them. This can be measured as
strictly ROI, but there are other measures equally as valuable.

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About the Nitro Gamification Platform
The Nitro gamification platform is a highly scalable and reliable Cloud-based
service for gamifying websites, social communities, and mobile applications –
it has served over 80 million unique users and 4 billion transactions to date.
Nitro’s flexible architecture enables our customer’s engineering teams to get up
and running quickly, while our powerful administration tools empower the site
production and marketing teams with real-time control over online user behavior.
The platform delivers the industry’s most comprehensive set of game mechanics.

THE WORLD’S MOST ADVANCED GAMIFICATION ENGINE:

Nitro is designed to make it easy for you to offer meaningful experiences to your
users. Highly flexible and scalable, Nitro can be customized to your needs, but
offers intuitive, easy set-up. Core Nitro elements include:
APIS: For tracking user behavior and retrieving generated data, such as leader
boards and newsfeeds. (These can be accessed via REST, JavaScript, and Flash.)
COMPONENTS: For easy set-up and implementation, including an avatar builder,
virtual room builder, trophy case, a toolbar and more. We have our own markup
language, NML, which enables you to embed any Nitro content into your site
without needing to write code.
ADMIN UI: Where you can configure your installation and generate reports.
Once your engineering team has integrated Nitro into your site, it’s easy for site
producers and the marketing team to change incentives, rewards and behavior,
without needing any additional engineering assistance. They can also access
Nitro’s powerful Analytics function to generate campaign data.

EASY SET-UP AND IMPLEMENTATION

ENGINEERS: Use the Nitro APIs (REST, JavaScript, Flash, Nitro Markup Language)
to instrument your site and embed widgets and other data. For quick
implementations, our Toolbar handles all the user-facing components, leaving
you to just track the behaviors that you want to encourage.
DESIGNERS: Create assets for trophies, virtual goods, widget skins, and
notifications, and insert them all into the system via the Admin UI.
MARKETERS: Set up the business rules for rewards and messaging in the Admin
UI, monitor results with Nitro Analytics, and iterate.

CONSTANT EVOLUTION
There is a Nitro release every quarter, with new functionality that is immediately
available to customers. By using Nitro, you are future-proofed.

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About Bunchball
Bunchball is the leader and innovator of engagement technology powered by gamification.
Purpose-built for the enterprise, Bunchball’s proven engagement solutions motivate employee,
partner and customer behaviors while delivering the performance intelligence needed to drive
business results. An early visionary, Bunchball wrote the book on gamification with the 2013 best
seller Loyalty 3.0, and is widely credited for numerous market innovations, including a patent
for Gamification as a Service. More than 400 enterprise customers rely upon Bunchball for the
company’s expertise, innovations and proprietary analytics that deliver proven business results,
and Bunchball is the partner of choice to industry leaders including Jive, SAP, Salesforce.com and
NICE Systems. Bunchball’s investors include Parallax Capital Fund, Granite Ventures, Northport
Investments and Correlation Ventures.

For more information, visit www.bunchball.com, our blog at www.gamification.com, or

follow @bunchball on Twitter.

www.bunchball.com
Copyright © Bunchball, Inc., 2016. All rights reserved.