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  • 1. Digital Game Design Techniques for Business:Rules, Incentives, ApplicationsLGST/OPIM 640XFall 2011, 0.5cuOverviewLeading firms are engaging in the practice of gamification, using the techniques of digitalgame designers to serve objectives as varied as marketing, human resources management,productivity enhancement, training, innovation, and customer engagement. This course willexamine the mechanisms of gamification and provide an understanding of their effective usein the modern firm.Companies of all sizes are already using gamification to deliver measureable returns. Forexample, the social location startup Foursquare employs a mobile-based badge andachievements system to motivate purchases and interest in local retailers, while Google uses apoint system and leaderboard to get users to tag millions of image files for free. Venturecapitalist John Doerr called Zynga, an online social games developer that relies entirely onvirtual goods for monetization, the best investment in the storied history of his firm, KleinerPerkins. SCVNGR (pronounced “scavenger”) provides a platform for retailers to creategames based on proximity to their products, and several Fortune 100 firms are experimentingwith gamification both internally and externally.While some see just another technology fad and others raise legal or regulatory concerns, thelevel of activity continues to expand. Gamification is part of a broader trend of integrating thevirtual and the physical worlds to alter incentives, redefine marketing and management, andpromote innovation.Gamification is a discipline that, like any effective business technique, requires clearlydefined strategies and well-managed execution. Game developers have been perfecting theircraft for decades on computers, and millennia before that. Researchers in cognitive science,sociology, and education have extensively studied games’ deep psychological bases.Business fields such as management, operations, marketing, and law are now adding to thisunderstanding.This course will draw upon interdisciplinary source material as well as real-world case studiesto identify effective strategies, techniques, and metrics for the application of games tobusiness. It will also identify a number of significant pitfalls to the successful implementationof gamification techniques, notably legal and ethical issues, the difficulty of making thingsfun, and the problems with implementing radical change in established firms.
  • 2. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011InstructorsAssociate Professor Kevin Werbach Professor Dan HunterDept. of Legal Studies and Business Ethics New York Law Schoolwerbach@wharton.upenn.edu hunterd@wharton.upenn.eduLogisticsThis is an experimental course, both in content and format. Material will be delivered througha combination of weekly in-person meetings and online learning. The course will have thenormal required contact hours of a .5 cu elective, but approximately half of that time will bethrough online video lectures, real-time video links with guest speakers, and interactive onlinediscussion. Students will also be expected to participate in asynchronous web-basedcollaboration in between class meetings, through posts to faculty-mediated blogs ordiscussion boards. The course itself will employ gamification techniques, allowing studentsto experience and assess mechanics such as achievements, points and badges.The course will be offered at the MBA level. Space permitting, students in the Wharton MBAfor Executives program and students from other Penn schools (e.g., Law, Design,Engineering) may be enrolled by instructor approval on a case-by-case basis.This is an interdisciplinary course. It incorporates aspects of strategy, customer engagement,innovation, psychology, education, and sociology, in addition to legal and ethical issues.SyllabusThe course will alternate between weekly in-person meetings and web-based video lectures.In general, the web-based sessions will take the form of traditional lectures, with students ableto comment or ask questions in real-time or after the fact. The in-person sessions willemphasize student-to-student discussion and team exercises, in addition to reviewing the web-based lectures and introducing the topic of the session.Several of the course assignments involve playing games. These are intended as seriousexercises, requiring analysis and written submissions. One cannot fully understand howgames operate or affect their players without playing them. The assignments are designed toexpose students to a wide range of contemporary digital games and game mechanics, whichcan be applied to other business contexts. 2
  • 3. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 20111. Introduction to Games and Game Design (in person session) The nature of play, and its significance to humanity; what makes a game; basic terminology; the evolution of games throughout history; loyalty programs and other antecedents; financials and market dynamics of the videogame sector; the emerging gamification tools market; game design methodology. Read: McGonigal, Reality is Broken, Chapter 1 (What Exactly is a Game?) Malaby, Beyond Play Optional: Huizinga, Homo Ludens, Chapter 1 (Nature and Significance of Play as a Cultural Phenomenon) Class Prep: Complete the personal information survey on the course website. Play the multiplayer version of the game, Minecraft (http://www.minecraft.net/). You should also look at some of the articles, blog posts, and user-created resources about Minecraft available online; they are not hard to find. Then consider the following questions: • What is the goal of Minecraft? • Is Minecraft fun? If so, why? If not, why not? • Why has Minecraft been successful? • What could a business learn from Minecraft? In Class: In addition to covering the topics for this session, we will introduce the structure and technology of the course. We will discuss how the website, blog, and wiki fit into the course, and also the interaction of in-person and web-based sessions. We will divide students into small teams for the final project, and provide a guide to game design theory and methodology.2. Game Mechanics (web-based lecture) An overview of what makes games fun, and the use of various types of points, levels, badges, leaderboards, avatars, competitions, and virtual goods within the modern firm. Read: Zichermann & Linder, Game-Based Marketing, Ch. 4 (Funware Mechanics) Reeves, Malone & O’Driscoll, Leadership’s Online Labs Optional: Hamari & Lehdonvirta, Game Design as Marketing Watch: Werbach, All I Really Needed to Know I Learned in WoW, September 2010 Assignment: You will be given a trial account in World of Warcraft (WoW), a popular massively multiplayer online game. If you are not familiar with WoW, spend some time leveling up your character and exploring the game world. 3
  • 4. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011 You will be assigned a specific aspect of the game to analyze. For example, the Auction House in which players trade items for in-game currency, the fishing mini-game, or player vs. player arena combat. Document and explain why particular mechanics work to motivate the end-user to perform these tasks, and to assist the goals of the developer/business. Submit your answer to the course website. Students will be encouraged to review and comment upon each other’s submissions.3. Psychological Underpinnings (in person session) Cognitive science of play; games and happiness; extrinsic vs. intrinsic motivations. Application to business environments, and the significance of non-monetary motivation mechanisms. Read: Pink, Drive, Chapter 4 (Autonomy), 5 (Mastery) and Appendix Watch: RSA Animation of themes from Drive Optional: Deci, & Ryan, The What and Why of Goal Pursuits Assignment: Play one of the major Facebook games developed by Zynga: Farmville, Mafia Wars, Frontierville, or Cityville. Identify three specific elements of the game and explain in one page how these elements stimulate user engagement and revenue generation for Zynga. Submit your answers to the course website. In Class: In addition to reviewing the literature on self-determination theory and intrinsic motivation, we will (1) examine some traditional business practices that implement the lessons of the psychological literature, and (2) categorize the game mechanics that we have studied along the axes of the psychological literature.4. Tools for Gamification (web-based lecture) Gamifying sites vs. companies; “gamification in a box” solutions (BigDoor, Bunchball, Badgeville, etc.); enterprise gamification (Seriosity); building gamification systems. Watch: Zichermann, Fun is the Future (Google Tech Talk, November 2010) Read: Zichermann & Linder, Chapter 3 (Social Networks & Leaderboards) Robinson, Can’t Play, Won’t Play Optional: Reeves & Reed, Total Engagement, Ch. 3 (Problems Games Might Solve) 4
  • 5. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011 Assignment: Spend some time using the Foursquare application (http://www.foursquare.com), either through the web interface or, preferably, on your iPhone or Android smartphone. Foursquare is a social location service that allows you to “check in” to places you visit, with heavy use of game mechanics. Consider the following questions: • How does gamification enhance Foursquare’s service? • Do Foursquare’s game mechanics limit the market for its service? • What is it about Foursquare’s implementation of points, badges, and leaderboards that makes them particularly effective? Team Exercise: Using the mechanics of Foursquare (and only Foursquare), do a paper design of a game system that meets one business challenge in an industry that you’re familiar with.5. Whose Game is It, Anyway? (In person session) Application of intellectual property law to user-generated content; legal enforcement of online terms of service; open source and Creative Commons licenses; property rights in virtual assets; taxation of virtual goods. Read: Hunter & Lastowka, The Laws of the Virtual Worlds MDY v. Blizzard Assignment: Review the opinion in MDY v. Blizzard. Answer following questions, and submit your answers to the course website: • Should a game developer have unfettered control over uses of its game? • What arguments might be made on the other side? • Is it a good strategy for companies employing game mechanics to use contractual terms of service to exercise strict control over users? • How might firms encourage user creativity but protect their assets? Team Exercise: Submit the name of the company that your team will gamify for your final project. Present a Powerpoint discussion of the problem faced by the company, and a one slide explanation of how your project will use game mechanics to address the problem.6. Games and the Law (web-based lecture) Scope of gambling/sweepstakes laws; rules designed for protection of children; privacy considerations in use of user data; comparison of U.S. and global regimes; sectoral rules for finance and health care. Read: Lastowka, Virtual Justice, Chapter 6 (Games) Zichermann & Linder, Chapter 5 (Prizes and Games of Chance) 5
  • 6. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011 Team Exercise: Present the initial functional specification for your gamification project. The specification should discuss any legal issues that might emerge in the final game design. In Class: In addition to covering the topics for this session, we will examine the legal issues faced by each of the student projects.7. Games in Business: What We Know and Don’t Know (in person session) A guest lecture by Prof. Ethan Mollick (Management) on the business applications of games. Read: Edery & Mollick, Changing the Game, Ch. 1 (Into to Games) Von Ahn, Games with a Purpose Class Prep: Consider the following questions in preparation for the guest lecture: • How would you assess the effectiveness of a gamification project? • How much reliable data about specific business benefits would you want to see before going forward with a games-based activity? In Class: Professor Mollick will share some of his research and discuss the state of data about the effectiveness of business games and gamification.8. Serious Games (web-based session) Games for simulation and training; research applications; educational games and gamification within education; Alternate Reality Games (ARGs); games to tackle major social problems. Watch: McGonigal, Gaming Can Make a Better World Read: Edery & Mollock, Chapter 6 (Three Skills for an Interconnected World) Thomas & Brown, Why Virtual Worlds Can Matter Assignment: Play either MindSnacks (http://www.mindsnacks.com), a mobile learning game, DailyFeats (http://www.dailyfeats.com), a social networking site to reward positive actions, or Darfur is Dying (http://www.darfurisdying.com/), a simulation of Darfur refugee camps. Answer the following questions, and submit your answer to the course website: • Is a game less fun if it’s designed for doing good? • What problems are serious games trying to address? Do they do a good job of this? • What lessons can the business community draw from serious games? 6
  • 7. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 20119. Prizes and Competitions (web-based lecture) The multiplier effect of prizes; designing effective prizes and competitions; the big picture. Read: Kamenetz, Power of the Prize Class Prep: Consider the following questions in preparation for the guest lecture. • How do prizes change the dynamics of contests? • What sorts of projects lend themselves best to prizes? • Are there special consideration for gamification projects by government entities? In Class: The class will be presented by Robynn Sturm, Special Assistant to the Director, Office of Science and Technology Policy, the White House. Ms. Sturm works on the design of X-Prizes for high-value public policy and social engineering issues. In class we will undertake a worked example of designing a prize/competition for high-stakes business problems.10. Ethical Considerations (web based lecture) Gamification as stealth marketing or manipulation; commercialization of play; uncompensated servitude or “digital sharecropping”; concerns about digital autonomy and misdirection. Read: Reeves & Read, Chapter 11 (Danger) Petersen, Loser Generated Content Doctorow, Anda’s Game Optional: Zittrain, Ubiquitous Human Computing Team Exercise: Each team will give a presentation discussing the ethical issues with their project, and address the ways in which they have or will ensure that any ethical issues will not become a marketing and PR issue upon release.11. Student Presentations (in person session) Each team will present its full proposal for gamification of a real company or website before a mock meeting of the company’s board of directions. Other students will critique the presentations.12. Gamifying the World (in person session) The future of gamification; intersection of games with mobility/location; how far will gamification go?; course review and wrap-up. 7
  • 8. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011 Watch: Jesse Schell, Design Outside the Box Seth Priebach, The Game Layer on Top of the World Read: Dignan, Gamification Meets “Workstreaming” Assignment: Think about what gamification and the use of games in business will be like in the year 2021. Write an essay explaining one thing that you think will be the same, one thing that will be different, and one currently uncertain or unknown factor that could change the outcome significantly. Submit your essay to the course website. Keep in mind that some things change faster than you think, and others change more slowly. Ten years ago, the Internet was a mainstream phenomenon and broadband deployment was beginning to accelerate; but Google was a small startup, Apple was in dire straights, mobile phones had only crude text-based data capabilities, and Facebook didn’t exist.Course Requirements and GradingAs noted above, in addition to regular class meetings, students will be expected to attendonline video lectures and to utilize social media tools to participate in online interactions.Individual Assignments (25%)Many of the class sessions have required assignments, such as an analysis of particular gamemechanics. These will be submitted to the course website and graded.Team Exercises (15%)Several of the class sessions have exercises to be done in teams, developing building blocksfor the final project.Team Presentations and Papers (30%)Teams will be graded as groups for their final gamification project submission. Thisassignment includes an in-glass presentation to be critiqued by other students, as well as apaper detailing the business goals, mechanics, and design choices for the proposedimplementation.Participation (30%)This is an inherently interactive course. More than mere attendance is expected. Studentswill be assessed on their participation in both in-person class sessions as well as a variety ofonline resources, including course blog posts, course Twitter/Facebook feeds, comments onothers blog posts, and the course’s Gamification wiki. 8
  • 9. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011Reading List (alphabetical by author)• E. L. Deci & R. M. Ryan, The What and Why of Goal Pursuits: Human Needs and the Self-Determination of Behavior, 11 PSYCHOLOGICAL INQUIRY 227 (2000)• Larry Dignan, Gamification Meets “Workstreaming,” ZDNET BLOG, March 2011• Cory Doctorow, Anda’s Game, in OVERCLOCKED: STORIES OF THE FUTURE PRESENT (Running Press 2007)• David Edery & Ethan Mollick, CHANGING THE GAME: HOW VIDEO GAMES ARE TRANSFORMING THE FUTURE OF BUSINESS (FT Press 2009)• Byron Reeves, Thomas W. Malone, and Tony O’Driscoll, Leadership’s Online Labs, HARVARD BUSINESS REVIEW, May 2008• Juho Hamari & Vili Lehdonvirta, Game Design as Marketing: How Game Mechanics Create Demand for Virtual Goods, 5 INTERNATIONAL JOURNAL OF BUSINESS SCIENCE AND APPLIED MANAGEMENT 14 (2010)• Dan Hunter & F. Gregory Lastowka, The Laws of the Virtual Worlds, 92 CALIFORNIA LAW REVIEW 1 (2004)• Johan Huizinga, HOMO LUDENS (Beacon Press 1955)• Anya Kamenetz, Power of the Prize, FAST COMPANY (May 2008)• Greg Lastowka, VIRTUAL JUSTICE: THE NEW LAWS OF ONLINE WORLDS (Yale 2010)• Thomas Malaby, Beyond Play: A New Approach to Games, 2 GAMES AND CULTURE 95 (2007)• Jane McGonigal, REALITY IS BROKEN: WHY GAMES MAKE US BETTER AND HOW THEY CAN CHANGE THE WORLD (Penguin Press 2011)• MDY Industries v. Blizzard Entertainment (9th Cir., Dec. 14, 2010)• Søren Mørk Petersen, Loser Generated Content: From Participation to Exploitation, FIRST MONDAY, March 2008• Daniel H. Pink, DRIVE: THE SURPRISING TRUTH ABOUT WHAT MOTIVATES US (Riverhead Books, 2009)• Byron Reeves & Leighton Reed, TOTAL ENGAGEMENT: USING GAMES AND VIRTUAL WORLDS TO CHANGE THE WAY PEOPLE WORK AND BUSINESSES COMPETE (HBS Press 2009)• Margaret Robinson, Can’t Play, Won’t Play, HIDE AND SEEK BLOG (October 6, 2010)• Jesse Schell, THE ART OF GAME DESIGN: A BOOK OF LENSES (Morgan Kaufmann 2008) 9
  • 10. DIGITAL GAME DESIGN TECHNIQUES FOR BUSINESS FALL 2011• Douglas Thomas and John Seely Brown, Why Virtual Worlds Can Matter, 1 INTERNATIONAL JOURNAL OF LEARNING AND MEDIA 1 (2009).• Luis Von Ahn, Games With a Purpose, IEEE COMPUTER, June 2006• Gabe Zichermann & Joselin Linder, GAME-BASED MARKETING: INSPIRE CUSTOMER LOYALTY THROUGH REWARDS, CHALLENGES, AND CONTESTS (Wiley 2010)• Jonathan Zittrain, Ubiquitous Human Computing, 366 PHILOSOPHICAL TRANSACTIONS OF THE ROYAL SOCIETY 3813 (2008) 10