The Big Business of Gamification

One of the core planks of any business’ value proposition is customer engagement - “how can you make a customer spend more time interacting on your platform than your competitors’?” Mobile app developers generally track key performance indicators (KPIs) such as daily or monthly active users (DAU / MAU), screen time, login frequency, etc. to measure their ability to hold a user’s interest. To this end, user experience (UX) plays a central role in keeping customers hooked onto a platform and the concept of “gamification” presents an intuitive option for capturing a customer’s attention.

Gamification refers to the usage of “game-like” elements in non-gaming scenarios, such as introducing a fun, rudimentary task for users to complete in exchange for some form of reward. Take the example of one of Hong Kong’s eight virtual banks, ZA Bank, which launched a gamification campaign termed “ZA Quest”. As part of the campaign, ZA Bank rewarded users with “ZA Coins” for completing nominal actions such as turning on push notifications, verifying a user’s email address, depositing a token sum of money, etc., which can be spent on purchases. While these may prima facie appear to be trivial activities that surely cannot sway a user’s perception of choosing ZA Bank’s mobile app over another bank’s mobile app, by getting their customers to spend more time on their mobile app than a competitors’ ZA Bank can build a sense of trust and familiarity with users. It can function as an implicit way to incentivise customers to explore the various functionalities that ZA Bank is offering, gradually building a sense of comfort that customers may enjoy with ZA Bank over their competitors. In this manner, gamification can turn the simplest of activities into a powerful tool for driving customer engagement.

However, while gamification can help capture customer attention, it can also help monetise that attention into revenue as well. For instance, think of a mobile app game that you have downloaded onto your phone, open the app and visit the in-app purchases store. Chances are, that instead of being able to directly make an in-app purchase through fiat dollars (i.e. HKD, USD, etc.), the app may instead request you to first convert to an in-game virtual currency, similar to ZA Bank’s “ZA Coin”, and only then allow you to spend that virtual currency on making an in-app purchase. This begs the question - “why would the app developers add a seemingly redundant additional step, which makes my purchasing journey more cumbersome, and could perhaps put me off from making a purchase?” Research has shown that in-game currencies can help disarm the financial inhibitions that a person may feel before deciding to make a purchase. In layman’s terms, you may think twice before spending real money, but could psychologically feel more willing to easily spend in-game currency bought using real money. This extra step of converting real into in-game currency acts as a psychological mechanism for lowering your guard and increasing your propensity to pay for an in-app purchase. Going back to the example of ZA Bank’s virtual currency, dubbed “ZA Coin”, a user may potentially feel less apprehensive about spending this virtual currency casually, relative to the amount of care and thinking they may display before spending real-world currency.

While gamification can act as an ingenious method for squeezing out more money and attention from customers from a business standpoint, the everyday average individual at the receiving end (you, who is reading this) needs to gain awareness of the psychological traps set by companies to implicitly get their hands onto your wallet.

Further Readings:

https://centrical.com/gamification-in-business/

https://www.forbes.com/sites/jamiemadigan/2019/12/19/the-perils-of-in-game-currency/?sh=553772cc42da

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