Gamification is the act of integrating game mechanics into a non-game experience. It was a hot topic a few years ago, and although the hype train has slowed down somewhat, companies are still gamifying their products and services.

Companies gamify their websites, their apps, and their platforms to increase the engagement of their users. After all, if your users aren’t engaged with your product or service, they’ll stop using it, and it’ll eventually die off. Gamification combats that threat by motivating users to act and be engaged. It’s another strategy to increase user loyalty.

The Gamification Hype Cycle Throughout the Years (source: Gartner)

In this article, we will discuss a few success stories of gamification, but also where it’s lacking. In the second part of this article, we will talk about why gamification needs a blockchain, but also why the blockchain needs gamification (not the same thing!).

The Plane Got There First

The first companies to successfully experiment with gamification were the airlines. Flying is inherently valuable, because it gets you from one far place to another far place faster than any other means of transport. But before the rise of budget airlines, it didn’t matter much which specific airline you chose. Many airlines offered a similar flight experience for a similar price.

Airlines mostly differentiated with their respective brands. You flew this airline because you liked its values, its aesthetic, or its messaging. That’s still the case today, but airlines have now incorporated gamification techniques to make its customers (and particularly the frequent fliers) stick to one brand over all the others.

We’re talking about loyalty schemes and airline rewards. Suddenly, you could earn points for the miles that you flew, and use those points to get upgrades to business class, get perfume discounts in the airport shops, or even get access to an exclusive area of the airport.

First checked bag free? That sounds nice, maybe I should try this out

It hardly costs an airline anything to come up with a loyalty scheme. Perhaps a website, printing off the loyalty cards, and arranging everything internally so employees understand the new mechanics and integrate it into their workflow. Peanuts when compared to the cost of an actual plane and jet fuel.

And these gamified loyalty schemes have been a huge success for airlines. The frequent flyer program of American Airlines alone brought in $1.15 billion in marketing revenue in the first half of 2018. Analysts suspect that loyalty schemes constitute a major part of airline profits these days.

Because gamification worked like a charm for airlines, companies across all industries are now integrating gamification techniques everywhere: which company has no form of points, levels, missions, badges, leaderboards, unlocks, event feeds, notifications, quizzes, or visual progress?

The Dopamine Rush of Social Media Platforms

Social media is another industry that has come to rely on gamification. Pretty much every social media platform is designed for maximum engagement, which means social media companies have integrated all the most effective gamification techniques.

The result is that we’re now glued to Facebook, Instagram, Twitter, etc… The dopamine rush of these gamified mechanics integrated into social media platforms haven’t just made us engaged, they’ve made us into addicts.

Luckily, people are increasingly realizing the destructive potential of social media, and many are trying to quit or at least curb their usage. Suffice to say it’s a sign of how effective gamification can be.

No shortage of articles showing the (destructive) power of gamification

Another Angle to Gamification

But points, notifications, and leaderboards aren’t the only way you can use gamification to have people engage with something. Sometimes, you don’t just need gaming techniques. You’ll need an actual game. The most successful example of this is America’s Army (AA).

AA is a game developed by the United States Army, where you play as an American soldier fighting terrorists. It has a comprehensive training module and its multiplayer mode is played by millions of gamers every day (including yours truly, back in the 2000s). Not only is AA an excellent game to play, but it also introduced its players to the US Army.

Briefing before my first digital parachute jump

The game was incredibly detailed and educational, but also a lot of fun. It yielded huge benefits for the US Army. In fact, the army considers it to be their most effective recruitment method. Recruiting soldiers through a video game, who would’ve thought?

What’s Wrong with Gamification?

While airlines, social media companies, and the US Army have been successful in gamifying their products and services, there are far more examples of poor integration of gamification techniques. Gamification in itself isn’t enough for people to care. I’ll give it to you straight and tell you that I really don’t care about my Starbucks points. Nor do I care about my TripAdvisor badges. Or that I’m a level four Google Maps guide.

What does this even mean?

And that’s because either the rewards are hardly worth the effort (do I really want to install another app to get a 5% discount on clothing after twenty purchases?)  or because the badges and points don’t have any inherent value. What am I going to do now that I’m a level 4 guide? How is that useful to me? If a company cannot provide an immediate answer to that question, it’s a sign they’ve only done 50% of the work. It’s not valuable enough, and people won’t be interested.

That’s where blockchain can provide a solution.

Using the Blockchain to Gamify

While the goal of each online community differs, they all use gamification for the same purpose: to increase engagement, and to recognize and reward members who act a certain way.

But currently, the value of the rewards that members receive is tied to that specific community. You can’t do anything with your Starbucks points in a Dunkin’ Donuts. Your British Airways points are useless if you fly with Lufthansa. There’s a cap to the value that loyalty rewards have, and that’s because they’re tied to the community.

Blockchain can remove that value cap. Instead of points, users can be rewarded with blockchain tokens. These tokens have monetary value and can be exchanged for other cryptocurrencies or for fiat money. That’s an immediate benefit over the current way of working, where your points hardly ever get you hard cash.

Secondly, this type of blockchain can be decoupled from a single community. The blockchain tokens can be used by all the communities using that blockchain, which means that the rewards you get here can be used elsewhere.

This significantly increases the value of tokens, and customers will flock to where they can get their points easiest. This, in turn, will lead to more competition between companies using that blockchain, which will lead to more competitive rewards; all of which is a good thing for the end consumer.

Of course, this will require some serious rethinking of the current ways that companies gamify their offering. Simply implementing a gamified blockchain mechanism is only doing 50% of the work. You’ll need to know which other companies will be on the same blockchain, and you’ll need to understand how users could use the tokens you give them. It will be a balancing exercise and you’ll have to carefully consider the number of tokens you give out versus the rewards you offer.

But, if implemented correctly, using the blockchain to gamify your offering can provide your customers with more value than any gamified offering today.

Gamifying the Blockchain

Gamification can use blockchain, but blockchain can use gamification too. Let me explain.

Blockchain is an important idea that can shake up our society and make it better in several ways. It moves power away from intermediaries to a community, improves privacy, gives people control over their data and their identity, and so on... But these weighty topics alone aren’t enough to draw a mass audience. Most people go about their lives today as they’ve done yesterday, relatively happy in their routine and at best vaguely interested in major ideological changes. This isn’t a critique; it’s human nature.

What blockchain needs to have enough people care about it is a game. Not a utility app, not some behind-the-scenes wizardry, but a game. A game that’s easy to install, easy to understand, and a lot of fun to play. Kind of like what America’s Army did to introduce people to the US Army. Something that gently introduces people to what blockchain is.

The closest any DApp (decentralized application; or a game that runs on the blockchain) has come to that lofty goal was CryptoKitties. But even then, at its peak in December 2017, there were only a few thousand monthly active users. To bring blockchain to the masses, we need a DApp that has hundreds of thousands of users (if not millions). This is how blockchain can use gamification too.

CryptoKitties is easy to start, easy to understand, and fun to play

In Conclusion

Gamification and blockchain walk hand in hand. A great game can introduce blockchain to the masses. And blockchain can help improve the gamified offerings that companies offer today. It can tie rewards to real monetary value and it allows users to transfer rewards between communities. And that’s just the start of it. Both blockchain and gamification are trends that will only become more inevitable as they mature and become integrated into our daily lives.