Gamification: Insights And Emerging Trends

Editor’s note: Tim Chang is a managing director at Mayfield Fund. Follow Tim on Twitter @timechange. He’s hosting a workshop on gamification at the Mayfield Fund offices on June 6 and has reserved 10 spots for TechCrunch readers — more details at the end of this post.

I have been active in the field of gamification for the past couple of years, working with companies like Badgeville, HealthTap, Gigya, Basis and others on leveraging game mechanics for end user behavior measurement, scoring and shaping. Last week, I participated on an investor panel of at VatorSplash’s Gamification Summit and the group shared several noteworthy points:

Gamification is expanding beyond the initial verticals of media and fitness: The next target verticals are education, eCommerce, local retail (example: Belly), and financial services.

Gamification is not just for consumer end users, but also corporate employees: Corporations can not only gamify their products and services for consumers and end users, but also leverage game mechanics to make work more fun, measurable, productive, and rewarding for internal employees. In fact, the internal enterprise-facing gamification market may turn out to be just as large (if not larger) than the consumer-facing opportunity, given the budgets and SW/SaaS spending involved with worker productivity.

Companies that let customers embrace gamification in baby steps will win: Rather than slamming existing and new users into a fully gamified experience out of the gate, companies may want to allow users to opt in to the game mechanics that they find most compelling and appealing. After all, different personalities “play” in different ways, and a common mistake for businesses is to assume that a single gamification element will appeal universally to all users. That said, simply bolting on gamification-lite to an existing business is likely to flop (remember when many companies attempted to add in avatars or virtual currencies because it was the trend at the time?) Companies should first think about their key business goals and target outcomes, match appropriate game mechanics to these goals, and then weave them into the user experience as seamlessly as possible — even if this means allowing users to initially opt-out or not engage in gamification elements.

Gamification needs to address all four phases of the user life-cycle: Think about leveraging game mechanics to facilitate and graduate users along each specific phase of the user experience: 1) new user onboarding (gamification is an excellent way to implement interactive tutorials); 2) user engagement; 3) conversion of free users to paid (or opt-in data sharing); 4) retention of power users. Remember that different mechanics are best suited for certain personality types and phases.

Gamification and Social often go hand in hand: Just as games come in single-player and multi-player flavors, gamification can be oriented towards solo or social play. For many companies, implementing gamification may first require installing social plumbing. As an example, Mayfield portfolio company Gigya (www.gigya.com) is a SaaS social infrastructure company that provides a suite of tools (like Social Login) that enables any business to add a social layer to their Web presence. Interestingly, they have found that users who are logged-in with Social Login spent 30% more time on-site than users who sign in with native site login. Customers like Pepsi use Gigya to build custom co-viewing experience sites for Pepsi-sponsored TV shows like The X-Factor, The Grammies and the SuperBowl, allowing users to collect “caps” (badges) and gain social ranking by commenting, sharing, and liking other users’ comments. Verizon Wireless created a community site of local events called VerizonInsider, where users are rewarded with points and badges for interacting with content.

Gamification design is about to emerge as a specific skill set: There’s likely to be a whole new talent pool trained at places like Playdom and Zynga that will be branded as “gamification designers” – many of our portfolio companies are already actively hunting for such people!

The possibilities for gamification are universal and endless: Every aspect of the human experience is a journey of sorts, meaning that there is a learning and leveling curve, a start, mid-point, and end goal…and multiple ways and strategies to reach the destination. Gamification should be thought of as helpful signposts, markers, scorecards, feedback loops and treats to guide the user along the way, show him or her different ways to “play” and provide hints as to what may be behind choice A, B, or C that they’re about to make.

Note to Entrepreneurs: Please avoid the “gamification as panacea” trap, tacking gamification as a “badge” onto every pitch, as VCs can see through this, just as consumers will shun bolted-on game mechanics.

We will be hosting an interactive evening workshop on gamification and game mechanics on June 6 at the Mayfield Fund offices on Sandhill Road, which will cover a broad range of topics including consumer motivation, leveling curve designs, pros and cons of various gamification tools; freemium conversion tuning for microtransaction and subscriptions; and using the seven deadly sins as a design framework.

We have reserved 10 spots for TechCrunch readers/entrepreneurs. To be considered, please comment and share this post to Facebook and we will pick the folks who we think will benefit the most from the discussion.

[image via flickr/Fiona Shields]