Essay on gamification (mathprof bengu)

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This article is about the implications that system gamification might have on the businesses and the society at large.

This article is about the implications that system gamification might have on the businesses and the society at large.

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  • 1. BSYSTEM GAMIFICATION Relevance of Gamification in IN BUSINESS Enterprises This article is about the concept of gamification of business systems. It reviews the impact of this concept on both the society and Enterprises.
  • 2. University of Cape Town P. J. Bengu (2012) UNIVERSITY OF CAPE TOWN Department of Information SystemsPlagiarism Declaration 1. I know that plagiarism is wrong. Plagiarism is to use another‟s work and pretend that it is one‟s own. 2. I have used the APA convention for citation and referencing. Each contribution to, and quotation in, this essay from the work(s) of other people has been attributed, and has been cited and referenced. 3. This essay is my own work. 4. I have not allowed, and will not allow, anyone to copy my work with the intention of passing it off as his or her own work. 5. I acknowledge that copying someone else‟s assignment or essay, or part of it, is wrong, and declare that this is my own work. Signature: _________________ i
  • 3. University of Cape Town P. J. Bengu (2012)AbstractThe idea of embedding game techniques and mechanics in the business systems to enhancecustomer engagement and experience has recently out bursts into the business world. This idea isknown as gamification. It is believed that gamification will soon be the widespread new approach ofadvertising. Unlike a traditional way of advertising, gamification is not only about promulgating thesale of a product, but also to incentivize the customers to participate in business activities whilesatisfying their desires.The purpose of this paper is to divulge the concept of system gamification, and evaluate its relevanceto the Enterprises. In doing so, it begins by conveying the origin and background of gamification.Thereafter it looks at its future relations in respect to the business context. The major findings revealthat the growth of gamification will reach about $3.6 billion in 2017, and 80% of global Enterprises willhave adopted the use of it.The graph below illustrates the growth of market size of gamification in the next four years. From thegraph it can be seen that the adoption of gamification will grow exponentially and soon become atraditional practice in marketing strategies. Figure i (Meloni et al., 2012)Keywords: Gamfication; Digital Marketing; Human Psychology; Business ii
  • 4. University of Cape Town P. J. Bengu (2012)Table of ContentsPLAGIARISM DECLARATION .........................................................................................................................................iABSTRACT .................................................................................................................................................................. ii1. INTRODUCTION ................................................................................................................................................ 1-2 1.1. Origin, Background and Future................................................................................................................................. 1 1.2. Application in real life ............................................................................................................................................... 1 1.3. Gamification in Business ........................................................................................................................................... 22. GAMIFICATION IMPACT ON THE SOCIETY .......................................................................................................... 3-6 2.1. Consumer Behavior and game dynamics................................................................................................................. 3 2.1.1. Game appeal to human psychology ............................................................................................................... 3 2.1.2. Game mechanics ............................................................................................................................................. 4 2.2. Customer Benefits.................................................................................................................................................... 5 2.3. Social criticisms of Gamification .............................................................................................................................. 63. GAMIFICATION IMPACT ON THE BUSINESS ........................................................................................................... 7 3.1. Relevance to Enterprises ........................................................................................................................................... 7 3.2. Digital Marketing and Gamification .......................................................................................................................... 74. FUTURE PROJECTIONS OF GAMIFICATION ............................................................................................................. 8 4.1. Adoption and development of Gamification ............................................................................................................. 85. CONCLUSION ....................................................................................................................................................... 96. APPENDIX (GRAPHS) .......................................................................................................................................... 107. REFERENCES ................................................................................................................................................. 11-12
  • 5. University of Cape Town P. J. Bengu (2012)IntroductionOrigin, Background and FutureThe concept of Gamification is the idea of using game mechanics, design techniques and gamethinking in a non-game system to enhance user experience and engagement (Dixon et al., 2011).Gamification cannot be considered entirely as a new concept, it originates from back in 2008 when itwas first introduced by Gabe Zichermann. The founder and CEO of Gamification Co. Zichermann(2010) referred to the concept of gamification as “Funware”, which he defined as “the art and scienceof turning your customers` everyday interactions into games that serve your business purpose”.Gamification gained its fame and widespread in the year 2010, when it was first popularized in thedigital media industry (Dixon et al., 2011).“Many large Enterprises are starting to look at gamification as a powerful strategy to driveengagement across their internal and external programs” (Herger, 2012. p. 6). Proponents ofgamification believe it to be the next generation of advertising strategy. Customer relationship will bemade stronger and ever lasting through facilitation of entertainment for users whilst interacting withthe brand (Mind Commerce Research, 2012).Mind Commerce Research (2012) reports that gamification is expected to be employed byapproximately eighty percent of 2000 Global organizations in 2017. It also projects that the growth ofgamification will reach 3.6 billion US Dollars in this same year. Gamification is a rapidly growingconcept, and therefore it should be reviewed carefully. This paper will do just that, and it will alsoprovide examples of gamififcation usage in real life.Application in real lifeGamification in business is mostly used to incentivize customers to buy more goods and services.This is normally done through the use of loyalty club systems. The systems in which customers areprovided with club accounts, and are entitled to earn a motivational reward for every businessactivities they partake in.In academe, gamification could be used to motivate students to engage more in their studies or extramural activities by providing elements such as points, badges etc. The most common scenario intertiary institutions is whereby students, after completing a course evaluation, are exempt from fullnumber of tutorials required for that particular course as to inspire them to do the course evaluations. 1
  • 6. University of Cape Town P. J. Bengu (2012)Having said gamification is an incentive strategy, it could therefore be used, not only in the businessor academe context, but in many other forms as well. It can be used as a form of currency in theorganizations. For instance, a catering company can offer vouchers for every meal missed, and thesevouchers could then be used to purchase anything from somewhere else (Educause.edu, 2011).However this essay shall focus mainly on concept of gamification in relation to the business context.This essay will analyze the impact of system gamification on the society, by reviewing the effects ithas on the consumer behavior, and benefits it provides to the customers. It will then revise the impactand the relevance of gamification to the businesses. It will finally evaluate the criticisms ofgamification in both societal and business context, and conclude by analyzing its future projections.Gamification in BusinessNowadays competition is encountered almost everywhere, most especially in the world of business.For every single form of business there are many entities engaged in it. For instance, in a businesscenter one can find more than three retail stores situated close to each other, selling the same orsimilar products, targeting the same group of people. In such competition it is quite clear that newforms of marketing strategies are needed. This leads to the concept of gamification (Jiang, 2011).Due to the developments in marketing strategies, most of the Businesses are customer orientated.Therefore for every business decision they make, they have to consider possible reactions ofcustomers. This reactions are basically what they need to control in customers, for they don`t wantbad reactions for the sake of their financial returns. Gamification is a best tool to control this reactionbehavior of the customers.Businesses could then use it to draw consumers` attention to their brands, and manipulate orincentivize them to purchase their product more and more. They can also use it to build a longercustomer relationship through gamified brand loyalty programs. Gamification is the future ofEnterprises, and so do social media and digital marketing. This paper explains how these concepts fittogether, and most importantly how will they impact on the future of both society and Businesses.This article explains the relevance, impact and benefits of gamification to the Enterprises. In doing so,it also reviews the effects of other concepts that foster and work with gamification. 2
  • 7. University of Cape Town P. J. Bengu (2012)Gamification impact on the societyConsumer behavior and game dynamicsThe underlying objective of system gamification is typically to influence human behavior, or ratherconsumer behavior in this context. System developers do this through the implementation of gamedynamics in non-game systems. Game dynamics are elements that incline to motivate andencourage humans to engage more in a game. These motives are directed to appeal to human`sdesires, needs and wants, and this technique is archived through the study of human psychology.Game appeal to human psychologyHuman`s needs, wants and desires are the main things people are living for. Almost everyone isengaged in what they are currently doing in order to get something they need, want or desire at theend of the day. These three essentials are well categorized in what is world known as Maslow`shierarchy of needs (figure ii) (Poston, 2009). Maslow (1943) said that “Classifications of motivations must be based upon goals… or motivated behavior”. Game designs do just that, they provide goals i.e. game mechanics to motivate user behavior. In the context of system gamification this mechanics are usually the rewards consumers are earning for participating in business activities. Most common game mechanics used in gamified systems are: points, levels, challenges, goods and so forth. System developers implement this game Figure ii mechanics in non-game systems in a way that would bestcorrelate with human`s needs, desires and wants. Therefore inspire them to engage more in businessactivities whilst satisfying their needs. The matrix on the next page illustrates the correlation betweenhuman desires and game mechanics. Figure iii (Bunchball.com, 2010).The idea behind the correlation of human psychology and game designs follows from that of actualgames. Games, by origin, are designed to appeal to humans` psychology, and therefore violate theirautonomous decisions. Once a game has earned a great appeal to one`s consciousness, user tendto be addicted to it. It is because of such addiction people incline to make irrational decisions about,perhaps a game they want to play. Critics of system gamification may argue that such practiceviolates consumers` autonomous decision, and lead them to buy things they are not intending topurchase, or purchasing a lot more than intended. 3
  • 8. University of Cape Town P. J. Bengu (2012)Matrix of correlation between Game mechanics and Human desires Figure iii (Bunchball.com, 2010)Game mechanicsAs mentioned earlier, game mechanics are game rewards that are designed to trigger humans`desires and perhaps get them to engage more into the game, or rather business activities.Bunchball.com (2010, p. 9) defines game mechanics as “tools, techniques and widgets that are usedas building blocks for gamifying websites or application”. These mechanics are the key elements ofgamification, they are the building blocks of system gamification. Therefore it is important to clarifythem. 1. Points Points are typically used to reward users in various ways. A common application of this mechanism is in the mobile network industry. Most mobile network companies, such Mobile Telephone Network (MTN) use this technique to encourage their clients to purchase more airtime and to make more voice calls. They provide their clients with a certain number of points for every airtime purchased and every call made. These points could then be used to buy Short Messages (SMSs), Data bundles or airtime after having accumulated a certain number of them. 2. Levels Levels are different classes that categorize participants in a program. This technique is usually used in athletics, especially martial arts. For instance, Martial arts participants are classified in levels where each level is represented by a different colored belt. (Bunchball.com, 2010) 4
  • 9. University of Cape Town P. J. Bengu (2012) 3. Challenges This technique is closely related to competition. In this technique all participants are let to compete to earn the highest score, but only the winner will receive a reward. For instance, Vodacom, a mobile network company, lets its clients to compete on arranging nine alphabets to match theirs. In this case all Vodacom clients participate but only one or few will win. (Bunchball.com, 2010) 4. Virtual goods Virtual goods are intangible products that are purchased for use in online communities, such as social networks, online games and so forth. Ernst & Young (2010) defines Virtual goods as non-physical objects within the online community represented by animations and pictures. Users can be rewarded with these virtual goods, which they can then trade within the community in exchange of either points or actual money. (Ernst & Young, 2010) 5. Leaderboards Leaderboards are mostly used in arcade machines to rank the players. They display a hierarchy of scores to indicate how players are performing against one another. In the context of gamification, leaderboards are used to display participants` results with an aim of inspiring competition, and therefore creating valuable behavior for the business. (Bunchball.com, 2010) 6. Badges The technique of badges is about giving participants assignments to accomplish and then rewarding them for doing so. The idea is to arrange challenges based on actions that you„re tracking, and reward users for reaching certain milestones. The same approach applies to other similar forms of remunerations such as Trophies, Ribbons and Medals.Benefits of customersHaving set out the mechanics that are used in system gamification to trigger humans` behavior, it canbe said that these types of rewards are in consumers` interest. We all want to earn something in life,it could be a badge, recognition level, spendable points etc. it doesn`t matter as long as it satisfies ourdesires. Therefore proponents of system gamification believe that this ideology is not only in theinterest of Businesses, but also in the interest of customers. 5
  • 10. University of Cape Town P. J. Bengu (2012)Social criticisms of gamificationCritics of system gamification argue that gamification is not acting in the interests of customer, ratherit manipulates them. Bartle (2011) believes that gamification is basically bribery, for he defines briberyas “rewarding someone for doing something that you want them to do.” He also said that gamification,in some instances, remunerates customers with rewards that are not valuable, and invaluable rewardis not really a reward. He is basically saying that superficial motivations such as virtual goods are notenough to remunerate customers, at least in a fair sense of humor.Costa (2012) supplements Bartle`s argument by stating that “It feels like bribery if participating isclearly just a means to serve the brand, and people are going to feel used.” Gamification is not a realgame, rather a collection of game elements. This means that gamififcation is not as sophisticated asactual videos games, and therefore it could be easy for customers to be cheated or for them to cheatthe system. (Costa, 2012)Participants are rewarded too soon in the process. The remuneration should build over time to rewarda long-term commitment. If participants are remunerated too early and often, their commitment willmean nothing, because the rewards will be of a very small amount and significance. Therefore itdoes not worth the effort. (Costa, 2012)Barraud (2012) claims that gamification can demotivate genuinely interested customers. For instance,some people don‟t like competitions and they would loose interest on what they like once competitionis introduced to it. Zechermann (2011) also said that if gamification introduces competition andsubsequently removes the genuine intrinsic interests of other participants, then it will be promoting anactivity at an expense of those participants.Other philosophers believe that people in aspects such as education and work must have intrinsicmotive to engage in them. They argue that educational activities and work are kind of things peopleshould do out of their willingness, without being incentivized. Incentivized people tend to do things forthe sake of achieving a reward, instead of their greater good (Jiang, 2011). Academics and work havean instrumental value within themselves, a greater good than a gamification reward. Thereforegamification shouldn`t be practiced in academics and work. 6
  • 11. University of Cape Town P. J. Bengu (2012)Gamification impact on the BusinessesRelevance to the EnterprisesIdeologies that influence human psychology can be useful in business affiliations, for they can behelpful for inspiring and manipulating consumers purchasing behavior (Cialdini & Rhoads, 2012).Influencing consumers purchasing decisions is the most vital point in business marketing. Theobjectives of business marketing strategies are to attract new customers while keeping the existingones, and to build a stronger relationship with them (Kotler & Amstrong, 2010).These objectives are achieved in many ways such as marketing campaigns, advertising, socialresponsibility programs and so forth. The dawn of gamification concept comes about a new approachof attain these objectives, and yet satisfying consumers` desires and entrepreneurs` goals (Herger,2012). Therefore gamification is relevant to Enterprises by means of marketing, and subsequentlyprovision of desired business objectives.Digital Marketing and GamificationLusch et al. (2004) mentioned that the dominant traditional sense of marketing is moving from thetrading of goods to a more interactive customer relationship and service focused logic. This transitionis made possible by the advances in digital technology and more innovative ways of channelingbusiness operations (Bhattacharya & Bolton, 2000). With this growth in digital environments, such ase-commerce, digital marketing, e-business etc. digital information has become an integral part ofmarketing strategies (Rowley, 2002).The actual relevance of system gamification to Enterprises is wholly through digital environments, inwhich it ranks in the top four of digital marketing (Mind Commerce Research, 2012). Gamification, inbusiness, would not be efficient and effective if it is operated outside the digital environment.Consider brand loyalty program, it could be a bit tedious to manage customers` participations andrewards on a pen and paper fashion. It is easier to digitally gather, store, retrieve and manageinformation than doing it manually.The concept of digital marketing is rapidly growing in recent years and so does gamification. Thesetwo concepts are tidily linked, and are not one in the same. Digital marketing is mainly aboutperforming business activities online. For instance, advertising goods and services on the web,whereas gamification comes in to encourage users to purchase more of these goods andservices.The adoption of digital marketing and system gamification will revolutionize the world. Theseconcepts are considered to be the next new generation of handling business operations. 7
  • 12. University of Cape Town P. J. Bengu (2012)Future projections of GamificationAdoption and development of gamification“Gamification represents a promising strategy for public and commercial brands to increase customeractivity, brand loyalty, broaden reach and monetized assets.” said Mind Commerce research (2012).For this reason lots of large corporates have began to adopt and realize the opportunities thatgamification could offer.MR2 Researchers (2012) believe that digital entertainment, including gamification, will continue toattract attention of many consumers through compelling game mechanics and designs that enhanceuser experience. The more consumers are attracted and motivated, the more overall participationincreases and so do Business financial returns.The adoption and implementation of gamification is expected to grow exponentially in the next fewyears. It is forecasted to accumulate a market share of over $2.5 billion in 2016, refer to figure 1 inappendix. MR2 Research (2012) shows that currently only 47% of Enterprises have implementedgamification specifically to engage customers into business activities. It also estimates that 22% and15% of Enterprises will respectively make use of gamification to enhance Brand loyalty and Brandawareness in the future, see figure 2 in appendix.This statistical analysis illustrates that gamification is still in its infancy stage. Smart Enterpriseexecutives would see this as an opportunity for them to take advantage of gamification while it is stillearly; for it will benefit them in a long run when more and more Enterprises begin implementing it.Anderson (2012) believe that gamification is the dawn of new of commercial and social development,which might lead to the end of traditional marketing orientation, and the beginning of game-orientatedmarketing.According to Anderson (2012) the adoption of gamification will have attained critical levels by the year2020. Gamification will have been implemented in so many aspects including marketing, health,education etc., said Anderson. Other proponents say it will be just as attractive as social networks.Social networks, or rather social media are the second most used tools in digital marketing followingSearch Engine Optimization (SEO). For instance, Facebook alone occupies roughly 75% of brandawareness activities of many companies (Webmarketing Research, 2011). If digital marketing couldgrow this much through social media, then it could go over the edge through gamification. This isbecause gamification doesn`t only entail commercial and social engagements, but it includesinspirational elements for customer experience, which lead to better customer engagement. 8
  • 13. University of Cape Town P. J. Bengu (2012)ConclusionIt was never foreseeable that games could be the future of our digital world. Yet we see the conceptof gamification drastically shaping the future of the world. Though gamification is still developing, itsfuture is quite promising. Its use will not only be restricted to the business operations, but it will beadopted and used in many other fields, and it will ultimately become part of our everyday life. It willbring a change to our lives.Though critics believe that gamifiation violates consumers` autonomous decision by creating desiresfor them. At least it doesn`t expose them to any harm of whatsoever kind, rather it enhances theirexperience and enjoyment. However Enterprises should not take advantage of it and harshlymanipulate consumers` psychology.There is no doubt that gamification will be widespread in the near future. There are many otheraspects that foster its growth, including digital marketing and social media. These aspects are alsodramatically growing in recent years, and are making gamification even more crucial concept toconsider. Therefore a good understanding of how it works and early implementation might earnEnterprises a competitive advantage in the near future. Employment of gamification in Enterprises isa way to go. 9
  • 14. University of Cape Town P. J. Bengu (2012)Appendix (Graphs)Figure 1 MR2 Research 2012 Gamification Market ForecastFigure 2 MR2 Research 2012 Client ImplementationFigure 3 Webmarketing Research 2011 Brand Awareness in Social Media 10
  • 15. University of Cape Town P. J. Bengu (2012)ReferenceAmy, K. J. (2011), Gamification 101: Design the Player Journey. Game Developers Conference (GDC). SanFransisco.Anderson, J. (2012). The future of gamifiation. Future of the internet. Retrieved fromhttp://pewinternet.org/Press-Releases/2012/The-Future-of-Gamification.aspxBartle, R. A. (2011). Too much of a good thing. Gamification. Retrieved fromhttp://www.mud.co.uk/richard/Shoreditch.pdfBhattachary, C. B., & Bolton, R. N. (2000). Relationship Marketing in mass markets. Lodon, UK: SagePublication.Bunchball. (2010). An introduction to the use of Game Dynamics to influence Behavior. Gamification101.Retrieved from http://www.bunchball.com/sites/default/files/downloads/gamification101.pdfChester, J., & Montgomery, K. (2008). Digital Marketing. Digital Media and Marketing. Retrieved fromhttp://digitalads.org/documents/NPLAN_digital_mktg_memo.pdfCialdini, R. B. & Rhoads, K. L. (2012).Human Behavior and marketplace. Marketing. Retrieved fromhttp://www.influenceatwork.com/wp-content/uploads/2012/02/Marketing_Research.pdfCosta, C. D. (2012). 7 potetial pitfalls of gamification: Gamification. Retrieved fromhttp://www.imediaconnection.com/content/31753.aspDixon, D. Sicart, M. Deterding, S. O`Mara, K. Nacke, L. (2011). Using Game Design Elements in Non-gamingContexts. Gamification. Retrieved from http://delivery.acm.org/10.1145/1980000/1979575/p2425-deterding.pdf?ip=137.158.153.205&acc=ACTIVE%20SERVICE&CFID=112854713&CFTOKEN=80806596&__acm__=1347095554_3ddcab40bb0a3b5a62a07d37f7f313bEducause. (2011). 7 Things you should know about Gamification. Research and Publications. Retrieved fromhttp://net.educause.edu/ir/library/pdf/ELI7075.pdfErnst & Young. (2010). Hot Topic. Game based revenue modle. Retrieved fromhttp://www.ey.com/Publication/vwLUAssets/Revenue_recognition_on_the_sale_of_virtual_goods/$FILE/Hot%20Topic%202010-20_BB1929_Sale%20of%20virtual%20goods.pdf 11
  • 16. University of Cape Town P. J. Bengu (2012)Herger, M. (2012). SAP and gamification in the enterprise. Gamificationhttp://www.gamifiedenterprise.com/sap-and-gamification-in-the-enterpriseJiag k. (2011). Why we shouldn`t Build a game layer on Top of the World. The danger of Gamification.Retrieved fromhttp://krystlejiang.files.wordpress.com/2011/07/the-dangers-of-gamification.pdfJim Barraud (2012). The explosion of Gamification and the inevitable Backlash. Criticism of Gamification.Retrieved from http://eavesdroppingmedia.wordpress.com/tag/criticism-of-gamification/Kotler, P., & Armstrong, G. (2010). Principles of Marketing. Cape Town: Pearson Prentice Hall South Africa.Maslow, A. H. (1943). A theory of motivation. Classics in the history of Psychology. Retrieved fromhttp://psychclassics.yorku.ca/Maslow/motivation.htmMind Commerce Research (2012). Opportunities and Market Outlook for Next Generation Brand/ProductAdvertising through Embedded Gaming. Gamification 2012-2017. Retrieved fromhttp://www.mindcommerce.com/Publications/Gamification_2012-2017.phpPoston, B. (2009). Maslow Hierarchy of need. An exercise in personal exploration. Retrieved fromhttp://www.ast.org/publications/Journal%20Archive/2009/8_August_2009/CE.pdfRowley, J. (2002). Information marketing in a digital world ( Vol. 20 Iss: 3 pp.352 – 358)Stephen, V. L., & Lusch, R. F. (2004). Evolving to a new dominat logic for marketing. ( journal of marketing68(1) : 1-17)Webmarketing Report (2011). State of digital marketing report. Retrieved fromhttp://www.webmarketing123.com/wordpress/wp-content/uploads/2011/10/Webmarketing123_Digital-Marketing-Report_2011.pdfWu, M. (2011). The Psychology of Motivation. Gamification 101. Retrieved fromhttp://lithosphere.lithium.com/t5/Building-Community-the-Platform/Gamification-101-The-Psychology-of-Motivation/ba-p/21864Zichermann, G. (2010, October 26). Fun is the Future: Mastering Gamification. [Video file]. Retrieved fromhttp://www.youtube.com/watch?v=6O1gNVeaE4g&feature=player_embedded 12