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What is Gamification ? - The Most Advanced Guide.

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Smartico
Published on
Jun 8, 2022
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Gamification is the process of applying game elements to non-gaming situations to engage and motivate users better. The uses of Gamification are practically universal and can be applied in any situation or business. It can increase productivity in the workplace, encourage physical activity, boost customer retention and loyalty, and much more.

Gamification aims to inspire people to engage with content and find pleasure and fulfillment in what otherwise might be seen as mundane tasks.

Some companies tend to be untrustworthy towards gamification due to a lack of clarity about what it can do for them, how to implement it, how it benefits their customers, and what they can actually gain from it. However, when it comes to Gamification-related benefits, “the sky is the limit” is an understatement.

  • Gamification has a long and rich history, with its roots dating back to the late 1800s, showcasing its potential to engage and motivate users in various contexts.
  • Today, gamification is a powerful tool to boost customer engagement and retention in industries such as retail, sports betting, fintech, and iGaming.
  • Elements like missions, levels, points, and badges are common in gamification strategies, providing users with a sense of progress, achievement and increased motivation.
  • As technology and user interests continue to evolve, gamification will likely play an increasingly prominent role in shaping the future customer experiences.

There’s a lot of information about what Gamification is and the mechanics behind it, but if you’re thinking of incorporating it into your business or brand, you might want to learn how it came to be and how it developed through the years.

The word “Gamification” sounds like a freshly made up name (and it is), but the concept of it has its roots all the way back at the end of the 1800s.

In the following paragraphs, we will take a more in-depth look at the origins and development of Gamification, and how it became one of the most efficient marketing and customer interaction tools in history.


Image credit: Ultimate History of Video Games


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USA

1896 S&H Green Stamps

Sales people sell stamps to retailers who use them to reward loyal customers.

1908 – The Boy Scouts

The Boy Scout movement hands out achievement-based badges to their members. Kids can earn special badges if they became proficient in an activity, tightly follow the rules of the

organization, and show skills that set them apart from the rest.

1912 – American Cracker Jack

The popcorn brand American Cracker Jack starts including free gifts in every bag – a smart approach that ends up becoming extremely popular in the food industry.

1973 – The acknowledgement of the ability of games to engage employees

In 1973, The Game of Work was created by Charles A Coonradt to address the issues surrounding job productivity and engagement. Coonradt was of the mind that the fun element found in games might solve the issue with employee engagement, adding that productivity was at a low point.

1978 – The birth of MUD1 – the first multi-user dungeon game

MUD1 uses a text-based interface to ignite the fire that would eventually leads to the boom of online social gaming. It was created by Richard Bartle, an acclaimed game designer and researcher at the University of Essex in England.

1980 – Thomas W. Malone publishes a paper on how kids can learn from playing video games

Professor Thomas W. Malone from the Sloan School of Business in MIT, writes a ground-breaking paper titled “What Makes Things Fun to Learn, A Study of Intrinsically Motivating Computer Games”, in which he details how children are able to learn valuable big and small life lessons from playing video games.

1981 – Gamification becomes airborne

American Airlines creates the first frequent flier program in history. It was called AAdvantage and helped boost customer loyalty by offering rewards for common civility. This is also something that can be seen today in many popular coffee shops.

1983 – The Launching Of The First Hotel Loyalty Programs

The Holiday Inn and Marriott introduce the first hotel loyalty program simultaneously in November that year.

1983 – The first car rental rewards program

The first car rental rewards program was launched by National Car Rental.

1996 – MUD1 creator Richard Bartle strikes again

The creator of MUD1 publishes his paper “Who Plays MID1”, and makes a convincing case on categorizing how gamers make their choices when playing the game. The model would later become the basis of various gamification strategies.

1999 – Fun is taken seriously

The world starts to understand the power and potential of making mundane activities ‘fun’. Stephen W. Draper wrote a piece in which he argued that user satisfaction should be a priority for all software configurations.

Image credit: Pexels/Sony

The History Of Gamification – The 2000s

2002 – Birth of the term “Gamification”

Computer programmer and investigative writer Nick Pelling creates the term Gamification. This is also the year when the Serious Games Initiative (SGI) is established to play a key role in developing various training games for the United States military. The SGI was determined to bring about a number of policy education, exploration, and management tools while using high-end computer game designs, tech, and development skills.

2005 – The creation of Bunchball

Rajat Pahari introduces a state-of-the-art Gamification platform designed to drive user engagement on websites by incorporating game mechanics into them. He named it “Bunchball”.

2007 – The creation of the Chore Wars website

Kevan Davis created Chore Wars, a website that made it easier for people to do chores by turning them into fun games.

2008 – Gamification becomes a recognized term, PlayStation introduces trophies

In an article where he talks about his experience at the 2008 Gaming Summit, Bret Terrill used the term “Gamification” (although it was misspelled in the article) for the first time on record:

“In conversations, one of the biggest topics … is the gamification of the web. The basic idea is taking game mechanics and applying to other web properties to increase engagement.”

Also in 2008, Sony started to reward players with achievement trophies on the PlayStation 3 video game console.

Image credit: Pexels

2010 – Gamification takes the world by storm

Thanks to the power of the internet, people’s curiosity about Gamification was increasing by the day. One event that helped massively boost its popularity was a series of videos from the DICE conference, which went viral in no time.

2011 – The first Gamification summit in history

San Francisco holds the first annual Gamification summit, bringing in recognized leaders and innovators in the field.

2012 – A new estimate reveals that more than 70% of Global 2000 Companies will incorporate at least one Gamified app by the year 2014

The finding was made by technological research and consulting firm, Gartner.

Also, a book that came out the same year “Reality is Broken by Jane McGonigal” revealed that 61% of CEOs, CFOs, and other senior executives that were surveyed said they were taking gaming breaks while on the job. Half of them confessed doing so to feel more productive.

2013 – A tasty market increase projection

M2 Research - a renown market analysis company - estimates that the world market for Gamification will rise from $242 million in 2012 to $2.8 billion in 2016.

2014 – 9 out of 10 companies reveal newfound success through Gamification

LevelEleven’s report also found that 71% of those companies boosted their sales performance significantly, thanks to Gamification.

2015 – Employee training revolutionized

Gartner estimates in Forbes, that Gamification tightly focused on employees has surpassed customer-focused Gamification apps in corporations worldwide. This is a historical moment for Gamification as businesses start applying Gamification in recruitment and onboarding strategies, as well as in learning and development.

2016 – Pokemon Go takes the world by storm

Pokemon became a massive hit worldwide as soon as it was released and it is still one of the most popular game-based learning apps, crossing 1 billion downloads in 2019.

Also in 2016, Snapchat introduces Streaks, making its users happy with a unique gaming feature.

2017 – Jason Suriano releases Office Arcade

Jason Suriano publishes Office Arcade, a book which explores the benefits of Gamification as a way to drive up an HR department's results by Gamifying worker engagement, training, and talent development in the corporate world.

2018 – The Gamification industry reaches new heights

In 2018, the market value for Gamification went up to $5.5 billion, which means it almost doubled in a span of just two years since 2016.

2022 – Gamification is everywhere

Today, most apps include some form of Gamification, and it is no longer just found on elearning and keep-fit apps but also in iGaming, meditation, to-do lists, job applications, presidential elections, litter picking, wildlife spotting, food and beverage… and so on. Basically, if it exists, it can be Gamified!


It’s also not as easy to spot Gamification in our day and age because there’s just so much of it everywhere.

And it’s here to stay.

As the timeline shows, Gamification has gone through some exciting and world-changing stages in history, and it’s growing stronger and more beneficial by the year. Gamification has been recognized as an extremely potent engagement too, and software designers who don’t employ it into their programs are becoming an endangered species.

Gamification has the unique power to produce change in daily habits and catapult businesses to unexpected heights, with its applications being virtually limitless.

And if all of the above didn’t convince you that Gamification is something worth investing in, we’re not sure what could :)

The Thriving State Of Gamification

The ever-evolving landscape of Gamification has seen a massive expansion in the last few years, and not even the lockdowns were able to shake its foothold. With alluring perks such as monetary benefits, leveled rewards, leaderboards, and exciting individual and team vs team competitions, Gamification tools and techniques drive extreme engagement and are creating a revolution within many industries all across the globe.

For example, online casinos have captured the hearts and minds of many of today’s players. Their convenience is unchallenged and they offer a massive variety of games, which makes them irresistible to many.

And with its highly advanced and ever-evolving techniques, Gamification is likely the most powerful tool that any industry implement to boost engagement and make sure players and users come back for more. This is also known as customer retention.

Needless to say, some verticals are more profitable than others, and in the following chapters we’ll briefly cover some of industries that can make the most profit by embracing the power of Gamification.

Retail

Retail businesses use all sorts of engagement techniques and incentives to reach out to their customers, lift up brand awareness, and boost sales.

From exciting games to interactive puzzles, loyalty programs, and adventure-driven digital experiences, retail is likely one of the most successful industries when it comes to driving business growth to exceptional levels.

Retail marketers use Gamification as one of their key tools to drive up sales. For example, Toys’ R’ Us uses digital QR codes to boost online sales and turn regular store visitors into virtual ones. Once the customer collects a certain number of QR codes, they can redeem them for vouchers and special discounts.

Sports

Gamification plays an immense role in the world of sports and its importance is set to rise even further in the near future. No surprise there, since games and sports are, in many ways, intertwined. Adding gaming elements to sports, naturally adds value to both fans and actual athletes.

Gamification can be used in sports to increase customer engagement and retention in both active (the game is part of a real-life activity) and non-active ways (playing a game on a mobile device or computer, or placing bets on your favorite sports teams).

Sports Gamification truly does wonders to motivate users into staying active within sports circles and boosts people’s overall dedication to sport-related activities.

Fintech

Making financial services engaging is not an easy task due to their complicated and serious nature. However, more and more businesses are boosting customer engagement through digital offers, and fintech is slowly, but surely, joining the party.

Gamification helps financial businesses engage customers with ease and turn mundane tasks into joyful and rewarding experiences. Companies do this by encouraging users to set in-app goals and by offering rewards upon task completion. Here, the Gamification process is centered around helping people save up, learn vital management skills, and improve their personal finances.

iGaming

Gamification and verticals like online casinos and sports betting go hand in hand, but many businesses are unaware of how potent of a tool it can actually be when it comes to retaining players.

iGaming businesses utilize Gamification to ensure repeat visits, provide special rewards to customers, for loyalty and retention purposes, and to train people how to use a specific platform or product.

The key tools of Gamification in the iGaming sphere include:

Missions: Players earn points by performing specific actions and completing story-driven actions and quests.

Levels: Levels are the markers of progress for players throughout their adventure. When a player successfully completes a given quest, they can unlock various gifts and rewards.

Points & Badges: Players are rewarded special points and badges upon completing difficult tasks and for progressing in the story.

Store: Stores are virtual areas where players can purchase game-related items with the points they’ve earned throughout the game.

Tournaments: Players can participate in individual or team-based tournaments to compete for a top spot on the leaderboard and earn rewards in the process.

As well as iGaming CRMs...

Lottery and Gamification are natural allies. Pretty much all lottery-related activities are structured in a game-like manner. For example:

  • Buy 3 tickets - get 2 for free.
  • Guess the secret number to win the grand prize.

In the world of lottery gaming, the more you bet - the more you increase your chances of becoming a wealthy man or woman, and sort out your money woes once and for all.

In order for the integration and maintenance to be successful and fit right in with your goals and purposes, you will need more than just an ordinary Gamification provider. This is where Smartico can prove immensely valuable to you.

Smartico’s intelligent Gamification suite offers a 3-point system to provide real-time gaming experiences that are dynamically segmented to match with the profiles of your customers.

The 3-point system goes as follows:

  1. Set emotional and intellectual goals that appeal to your players.
  1. Offer Rewards that engage and motivate your players to keep playing.
  1. Place Gamification at the center of the player experience by creating recurring themes and reinforcing player routines.

“Our strategy is to engage with personalized content and relevant information at the right time (and not to over engage) – this is a real boost in customer experience.”

– Sergey Kobitskiy, Smartico CEO

Smartico’s Key Features

In order to increase engagement with users and earn their loyalty as long-time customers, Smartico provides a large set of powerful features, which include:

  • Various intuitive challenges and gaming techniques
  • High value incentives that encourage long-term loyalty and retention, elevate player value, strengthen engagement, and boost user acquisition
  • Multi-Currency/Language/Deep Brand Support
  • Missions – Engage players with fun real-time solo or multiplayer tasks
  • Points – Encourage players to keep coming back through point-based incentives and unlockables
  • Badges – Stand out from the rest with sleek badges and earn free spins/bonuses for each earned badge
  • Levels – Players gain experience and special perks when leveling-up
  • Incentives – Motivate players to come back for more with unique rewards and bonuses
  • Marketplace – Players can actualize their points by cashing them in for free spins or other rewards like online shopping vouchers
  • Mini Games – Players can reset their senses through short, reward-earning games like our Loyalty Wheel and Scratch & Catch
  • Tournaments – Set your own qualification rules and offer your customers a powerful endorphin rush with Smartico’s special tournament system
  • Leaderboards – Set daily, weekly, and monthly prizes and watch your user engagement skyrocket
  • Bonus Engine Integration - Cash bonuses, free spins, match bonuses and more

The great thing about Gamification is that you can always find something that works for your business needs and apply it. It is an extremely powerful tool when used the right way, whether it be in sports betting, online casinos, lottery, retail, fintech or anything else, and even better when used in conjunction with bonus systems.

The benefits are virtually limitless, and with a strong partner such as Smartico by your side, you can seamlessly create strategies that produce never-before-seen results.

If you want to know more about how Gamification can boost the revenue of your business, please don’t hesitate to get in touch and book a free demo of Smartico’s all-in-one Gamification solution.

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