How game mechanics are infecting everything

And. Everyone welcome to reporters roundtable primary needle in San Francisco this is our weekly tech show. -- weekly show on a single tech topical week. This week we're talking about game mechanics. New services like foursquare and other -- and services use philosophies of game design. To pull users deeper into engaging with the service we're gonna talk about this as it applies to non game applications the success of this concept has begun to infect. Other technologies other applications from consumer web services to business applications and that is what we're gonna be talking about today the unification. But software and services we have three guest today not to -- from different perspectives and they're all quickly becoming experts in this developing field. First during studio guests through -- correct it's it's all I want to pronounce it winnings because you're in gaming. You know I -- consider changing it you should that's true -- the founder of repeatedly which is a startup that brings game mechanics to your website. Repeatedly is that my thesis is bait is basically means the and the nation of my thesis where they show but thanks very much for coming and thank you for having me. -- -- And now I first met drew through a blog post of one of our other guest David fine leave the of Mohr Davidow ventures David is also with us here you -- a blog post about adding game mechanics to your company. And you all -- -- -- let investments in other companies like that -- so high five invisible -- measures. And you're currently looking for opportunities in the space I am thank -- David nature. Through it through great to -- in their infinite thing and it -- comment. Now finally via Skype we have -- is Ackerman whose author of the book game based marketing inspire customer loyalty through awards challenges and contests. -- blogs at -- where blog dot com what you're you're interest -- in -- bringing game mechanics and your site you should read. And also. Is working on industry events in the space so that's going to be fastening gave thanks for dialing and for. Thank you so much right. So welcome everyone let's get this thing going now first I want to talk about using -- psychology in consumer products this is hardly -- we don't think about a much. But. Let's have a brief history gave -- -- it turn this on over to you let's talk about this now. There is frequent flier miles there's Weight Watchers alcoholics anonymous I mean. How much is game mechanics part of our life already. Sure and so when I talk about this and we talked about the marketing -- -- came out earlier this year we usually look at the history I'm unification of consumer products. On the timeline of loyalty programs sort pretty much starts in the nineteenth century with people going to under the local mercantile -- ten pounds of sugar getting -- for free. And that ten to one ratio does do you shop and you know local cafe continues to get out and nobody knows why -- -- -- is so compelling -- it works. In the 1930s the first virtual economy system that we we would recognized us starts with a company called S each green stamps. And that's where you earn these little green stamps in stuck in a book and eventually eat for free stuff -- participating merchants. The cool part about this and each was the figured out that if they broke the connection between earning -- redemption had a lot of control over the economics of against. And that means about Siemens -- early eighties when American Airlines launches the first frequent flier program called advantage. In about a week later united in TWA upstairs. Andy really realize that the most important thing you -- -- system is actually not redemption it's status. And he built an entire system that not only offers you free stuff and if you've tried to redeem your miles this summer. For a trip to Paris you'll know when I -- my redemption is not the focus of frequent -- program. Status really became the core. The core understanding and of those programs and and that sort of on -- -- two days. The interest -- -- duplication systems which are distinguished from all others. By the fact that they almost never give the user anything tangible in the real world there are now. You've got all the way from now. Tend to once you -- TV virtual works. It's all leveling up so the -- wouldn't you know we we see this now in. And applications where you can. Certainly games -- -- -- level level level and that is what about that is so compelling to users that they will keep pressing that button. Whatever it is in order to go from silver to gold platinum or to get the cloak of whatever I mean why is that so appealing to -- -- I think you that this status that fact you see that. When people drive their car down the street when -- have the black card instead of the gold card you see it everywhere and in light and that just is. Amazing driver of human behavior in some ways here point I think it's in it sometimes more effective. When you don't equate it with the real world. Rewards -- money -- and in fact the more abstract it is. Sometimes that can be even more powerful well at the David let's stay with you for second here and you invest your venture capitalist and you invest in new businesses. What about this is appealing to you as an investor. While -- the number one thing is the margins on virtual goods and virtual items and status there and it there in an -- you know there. I need nine point 99%. -- it's an amazing. You know part of the business model if if you can make it work that's you know it's incredibly. Compelling from that perspective and I think the other huge cost you see as an investor is. Something entrepreneurs have -- I've struggled -- you know in my start -- is. Customer and user acquisition and the united this sort of status and inner activity these dynamics can really changed. The cost of acquiring and and keeping your users and also on the manipulation to me but before we get a seriously before we get into that which I'm not saying is -- bad the. The smile on this thing you know. It's smart but before we get into that drew Europe found you found a company repeatedly yes which is all about -- -- about this business. So for us it's really about making it as simple as possible to integrate game mechanics in your site wouldn't -- Game mechanics can be quite complex a lot of people think it's just adding points and badges and that's it. We've done we've done game mechanics and now we'll move on and what we found this is that game mechanics are very similar to. How social media was getting started mean in the beginning it was very. Old school. There wasn't much thought process to -- written and so I asked for us it's how do we integrate game mechanics as simply as possible to see what. The outcome is now what are some of the mechanics that you're talking about we talk about leveling up but that's there there are others yes yes the -- -- so the game mechanics. Our system is actually based entirely around actions. On so a user does this or use it does that some. And you start off. You obviously need to know how valuable a certain action is. For you for your bottom line and from that you can -- points based on. What they're doing. Men injured internally and appoint -- awarding people do like your bookkeeping point it's points to them to as -- it right because -- -- keeping score that. We tend to think about different points systems actually -- so one of the Congdon things that people think of when he hears the word points is the immediately think redeemable points but redeemable points are really and you wanna for. Counterpoint systems that you -- -- -- experience. And those include things like XP your experience points card redemptions on social points or skill points and I'm one of my favorites which is karma points. Will whose only purpose or give them -- other people. And so there's a number of different point distance -- But redemption is a redemption he's not my fever for first implementation they're gone white wise redemption points -- -- that that's green stamps right. Yeah well -- systems have a number of issues I think we'll be offer you know the first one obviously is the cost money. The second one is that if users. Don't like this things that they can redeem points forward don't -- -- you're telling the troops it tends to have a negative effect and -- our position. When we talk about things and speaking -- eating occasion to users that matters and then we'll talk about status. That's power and -- and it put that in order of importance and in decline in increasing -- cost. And declining order -- power. So -- which are the most powerful psychologically for people. Of those different types of status is or or points. Well it's status that actually has some social -- -- that -- you know other people can see mum and status it's actually obvious sign that that has meaning that -- Those are things that we are most valuable to users and -- to the previous point eight you know status is important because. We can't often tell people easily we don't want to often -- people use what are what options are. So we need we -- representing our doubts is that not just directly like you know I 2000 dollar and write -- -- that a lot. That's one thing that's really been interesting about social media and consumer whether this is that. I mean you look a Twitter and it's like hey look at me look at all my followers. I must have something important to satan you look at FaceBook your total number of friends is saying look how popular I am. And then you have -- -- saying. Look at me look at all of the expense of things I'm buying. Foursquare look at me look and all the cool places them hanging out what foursquare does this talk about -- to because -- is one of the key nuggets of this particular show. Because foursquare seems to have. Instantiate that the whole concept of game of buying a social system. By giving you the opportunity to be a mayor to win status and more importantly the -- other people out of the status that they -- How much of that competition. Not just internal card comes with yourself -- points of whatever kind you -- get but competition to bounce other people that is part of the game -- patient in non game applications. I mean I think that's exactly it status fundamentally is especially -- in these environments is all about the competitive. Aspect of -- and when you think about. The implementation of that in the form of you know leaderboard are simple things like badges. Stuff like that that's all about showing your status to other people on I think. You know especially when you think about leader boards and points and dynamics like that. United. Human beings really find that appealing Tennessee where they are. On the on the lapels this swell up wanting LC -- -- doesn't know about that Davies. That's actually not worn out in empirical data -- funny to hear you say because one of the calm things. It comes up when I talk to people opting for teaching -- A lot of the people that I'm talking -- like for example. Venture capitalists and startup founders and you -- business executives. Tend to score -- -- skills and achievements. And one of the injuries are honest we tend to think that everyone in the world isn't it cheaper like costs and we care we care about winning and we care ericsson's. But the truth is about three the world doesn't actually cared -- cheap they just want achievements. Can you so expand and patently absurd so we we tend to think we're different actual players just comes from research in east from Richard -- You -- socialized certainly explorer -- And these are the port there's since been expanded to sixteen different kinds of where he's. -- -- are pretty and in during its first our understanding of why people Wii games. And it cheaper for one type of -- care about of course the downside of IP. Achievers is that. You know not everyone can and that creeks and -- but it would be interesting to note that achievers we -- -- make up about 10% of the population. I think about that the interesting thing there is -- you know that that dynamic. Certainly we've seen that. Drive the behavior of large number of users oh I'm not sure whether it's the achievers or not but I think. You know we can certainly see where in a very small set of users have a behavior where there sending out gifts there. -- interacting with others other users and that's driving a lot of the behavior of the other. -- users in the. And so I I wouldn't I wouldn't posit that a -- that that are the principal reason why they're urging that is actually for socialized. I don't socialize or meet the vast majority of the population need really there -- principally by. Looking wear -- non confrontational. Easy to reciprocate social interactions with other people that's the core core reason why they play. And in fact the world's most enduring games bridge -- on Domino's World of Warcraft and farm bill. All -- one critical thing in common. Which is -- socializing really easy and -- thinking this disorder are contextual. Experience. It's now how can we take the lessons from these games from -- each farm bill for example and apply it to. While say you know I'm SAP Oracle and I am looking at the way the stickiness of farm bill -- How can I get might the users of my software and therefore my customers are buying the software as engaged in. My eight you know -- map as they are part of what are some of the ailments game -- -- work in in business and give us -- stamp album and right that's -- -- it it's sunny typically. Just taking a little step back which you see is -- said it's like 1% of users will be your power users and it will contribute all the contents. -- and then you'll have like 9% 10% who are. Curators and then the other 89% is just consumption. Now the key thing is is that those all fit within Arnold's four types right -- if you're achievers who are going on to create the content. And then if the -- -- who are interacting based around that content. To -- really reached. I mean the end goal with any type Booth he unification is too. Create -- eighty atmosphere that. It's focused for every wouldn't even know different people even though they're different people right I mean they can use -- happened many different ways and so what you see this is that. The socialize is they'll come in and they'll talk and the the actions that they the -- -- have done -- create a conversation. Hmm and this is actually to be. Based -- accomplish as having with my Twitter on the -- -- of various apps through what little we can show notes but yes so BJ -- actually just take a step back BJ's. -- Research is all about. Legislation technology -- to how do we develop technology to encourage people to do a certain behavior. What he's found this is that it really can be divided into a certain. Number of categories you either want a user to do more of an action that they are already familiar with. On or you want them to do less of a certain action. And it's all of this fits into what he calls the purple past. I believe which is getting a user to do an action that they are comfortable with doing already and it's not foreign to them but getting them to do it for continued amount of time. And that's -- game mechanics play -- This it's engaging the user and -- -- to keep with that so. When it one of the issues that I have with all of the game mechanics. Especially in games -- say is they advertise to other people how much time. An effort I'm wasting inning game. And -- and I feel from I feel either like I'm revealing too much of myself. Or like I'm being just out now manipulated. And it is that a common feeling or am I just you know paranoid. Well I would distinguish first -- the sake of argument between capital G demons. Andy -- game mechanics and non game contacts. So I I think we -- -- word from the success of social change like. Know what armed on frontier to all. And certainly not like mafia wars. But -- -- what we're really talking about using them context where you're you're typically going to connect it to a brand legislator each area it's under a different. Or it's usually if you got a utility. -- -- -- -- -- -- We're gonna use game mechanics -- -- -- be eager. I don't necessarily think that though word -- -- carries the right connotation -- You know for what it is that we're trying to do you. I think what we're trying to do is we're trying to get people to crack. With. With an experience with other people are excited with the -- Lump you in a week that -- more valuable for the company and for an end user if -- not delivering value to usery the elite right. So there's no like fundamental kind of you know coercion involved in -- -- -- -- -- The good -- let's talk about that because that like that's that I IR if you manipulated. When there is an open arm don't I don't wanna eight. Ignite that addictive part of my brain here I'm scared of that at if they even. In business apps yeah -- -- example one that -- it seems a little too much like I'm being -- -- that part of the negative side router are there other negative aspects there. But if you if you look at marketing in general I think marketing. Is. You know -- the purpose of marketing often is to -- influence people to make a purchase decision nor. I'd get them to do something on on your site and so I think it's the question of finding. The balance between delivering -- great user experience and you know providing an experience that. If people do really fine valuable so they they aren't being manipulated and they aren't healing manipulated so you really wanna. I think part of this is. The real video won the big -- -- is it isn't purely achievement and isn't purely social with a mix of all these. Mechanics you can use to deliver -- really fun and engaging experience so let's say that I'm running my own start. And I -- all this buzz about game mechanics and -- want some of that Jews in my -- what I know drew this is your business this. Will say this but -- -- for the record through disqualified -- -- -- cause I don't shoot I had a great answer to it. Well I'm -- but I want to get what do I do. Aside from buying -- software -- dot -- what do I do to build the game mechanics into my -- think about. Well me you know using other software may be one of the most powerful ways together that's the history of great -- partnership is. Building on the building blocks oh. You know but I think you know it depends a lot and whether you're starting something from scratch or your. You know trying to do something incremental -- a site that party access and certainly if you're starting from scratch I think you can. Think about your whole. A user experience as a -- And you know what how do I make it engaging in -- and interactive and and do you all those things that are in -- positive side. -- And we actually go to you on this when that drew you said we're talking earlier there's a difference between fun and play. How how does that apply to how we're thinking about these game mechanics. Right so it actually goes back to what it was saying about there's -- difference between. Games with a capital G them and lower case -- -- oftentimes people field that. They don't wanna except that there are playing games C look at people who are playing social games on FaceBook -- if you ask the majority of them they won't call themselves players. They don't consider themselves game players. They're just socializing. At. -- -- And -- -- your your previous question raised about how we start a process of thinking about it. So windows book in my book into its marketing in the blog by a video blog talk a little bit about some of the techniques that -- to design unified systems. And so one -- the first exercises that I always people do is collect call up -- -- exercise. And that's basically. I how people rate down in the list. Every single activity that you want users to take and that's you know granular -- to -- annual -- -- upload a photo invite a friend invite -- France. And -- each one of those activities ask people to assign a point right. And it just -- aside with the answer redeemable -- in just a -- -- from your perspective how valuable are BTU. As -- as -- -- just. And then you -- that list according to the point -- it's. And you look at what's most important is the relative value of different actions and different points so. You used inviting a friend worth four times updating your profiles that work how -- -- under arms that's really the important thing. Freedom rank it right complexity and meet you start focusing on those activities -- -- the top laptop and -- -- Starters please start thinking that your app as with with points and I mean you you game it out yourself as a developer. Mark Zuckerberg. That's the -- FaceBook are are not a -- replace that we're talking about the Google adding social elements to Google. But you can't just add social as a layer or as widget that you have to build it that way does the same thing apply to adding game this org. Gaming is to applications can level or later on -- the property have to build a from the ground up. Either arm can do either yes okay so it. Just clarify with Mark Zuckerberg I mean. These statements very strong and it's obvious it it's a little hypocritical. If you think about it you look at the products that they're creating the social plug ins right is that not just -- -- on website. Given all the respective yes you -- -- you look at FaceBook connect it right it's going back somewhere yes but it's adding a social layer to a website wouldn't. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But I think more specific I think we're specifically here in fact unification is one of the key things that I think it's very slick new -- means that in fact -- -- -- -- really well to be layered into existing experience. And the principal concern about community any time to -- you don't do something it's perceived as cheesy -- distracting by your audience. -- -- those are actually minor concern. In the action. Why is being cheesy -- distracting a minor concern. Because frankly and it's often an obstacle that people throw up. You know -- to block -- notion of new social and unified marketing. When in fact you can almost always meek. Unified experience coherent and honest the underlying. -- underlying acting you're trying to engage. An example that I -- give people because they usually get asked this question when it if talks. What experiences do not lend themselves well unification your -- and so you know might be a good example of this is cancer. If there's not intrinsically fun discussion. You know Adobe says cancers Superfund or want to make you -- is. That when -- used systems for treating each each -- for example for patients take their medicine ask the researchers at the University of Pennsylvania recently did you know it. It how positive effect get species to follow -- Ricci and similarly in context outside of medicine. We know that when we give professionals like hypothetically doctors. You know -- system that rewards them for paying attention to patients we get. Better results in better outcomes so I don't know whether or not picking a -- system could help. Sure cancer or me cancer. Easier for people to XT luck to go after but I do you know that wouldn't be applied -- sorts of techniques and other places we had. Superior in our actions -- and it's it's also. Been used for -- teaching kids her about cancer. Or about different types of diseases and so -- I forget the name of that that there is a game where you were actually the disease. -- And you word you were the the medicine and we're killing the disease. And it really helps younger kids going through. This process uninteresting to -- visualization yes and also what. With -- following regime that's fascinating. But aren't aren't there I mean I just -- wanna there's one of your competitors -- -- leveler. They'll let this sort of I don't know how direct the -- they -- game mechanics to app so they've partnered with -- created their own app called beer B which is. Game mechanics on top of eight. Drinking game. So can we not go too far on this. That's is that -- that's just an obvious question but. -- -- you know I think yeah. It's. -- think you can go too far and with with some of these dynamics and certainly. You know kind of that thoughts behind the blog post I wrote was you know how do you take -- benefits. -- these game dynamics and and you know create value for users in your nine game applications I think when it comes -- You know some of the the other examples here you're pointing out beer drinking and so on you know that that that may be -- -- Also I'd recommend people check out the -- last Sunday's New York Times there is a great story about entrepreneurship and one of the that subject of the story with the guy named -- Three dash. Who is starting a company called scavenger which he's trying to at a game layer on top of the real world -- that's so for example. If you're playing this game you don't is certain restaurant and you fold. The Mexican restaurant folder aluminum foil -- -- Byrd then you get a certain bad connects -- some when redeemable either for that -- many windows. I do I do think this concept and obtaining. Online game yeah -- and bring it off line is is pretty -- -- you -- you don't see that in as many. Applications but there there may be some really compelling opportunities well I mean what you see is this if you look at the trends. With everything become intractable problem it's not that this information with and -- before but it's that we're now able to track it. You can create -- totally different -- -- where it's like. If you look at Twitter it's active user generated content via I have to sit there and type out my tweaks. But if you look at foursquare. Word -- for instance what's on -- tablet. On based on my taste graph -- a -- made all of these purchases in the past. Therefore we think. You'd really like this -- -- really like that that's all being passively collect it and so we're playing the game right I -- again yes the gave her. And and -- -- they teach you you know on that subject. You know I think when we think -- key mechanics and as I described them as the most powerful force in I human universe. Because they're the only thing that allows us techniques people do things that are fundamentally against their own self interest without the use of force. In a predictable way. So sex is very powerful getting people are against your self interest but it's not very predictable. And consumers -- generally present -- when you pull out a gun connected to -- had Andy and do something. So game mechanics at a different place in the sort of you know -- power hierarchy as far as you'll be able to -- user behavior. And -- in that -- to my dark side comments from before which you'd asked about. Actually think that you would probably -- -- ethical code of conduct among unification designers as far as. You certainly limits actually it's a project after a moment to -- it gets started on an out didn't you get some kind of worm going around that this year. So how far this one last question -- we were gonna run out here. How far can this go or what's next is a going to be a backlash -- -- to -- the on going game is coming into our email clients RC RM maps are ATMs -- machines how. Where we see games next and where's it going in I love this question by the way are we asked this question you can go first -- -- Okay absolutely there is going to be a backlash and and -- -- overload. But in 2015. And so for the next few years I think it's really an arms race. For folks to bring these more and teaching experience is more rewarding experiences frankly -- more consumer centric experiences -- what they're used to doing. -- the forefront and you know it's really not something that the mass market. -- we need to worry about the mass market for -- -- -- years. Can work in our chat -- since the ATM slot machine sounds like a real winner. -- the you you know I think it's easy especially here in Silicon Valley. Sort of take all these dynamics for granted and and it's in their very much mainstream but. Yeah in the context of applying. These sorts. Mechanics to enterprise applications or. Website it's you know can even consumer facing sites. That aren't pure games and I think we still very long way to get -- -- just seeing some of these techniques applied to. In the positive ways to. You you know both new startups and you know an existing companies I think -- -- Very compelling her for a number of years to come. -- I mean the fact of the matter is -- that game mechanics are very new -- and the industry is rapidly changing as we speak. Bomb game mechanics will continue to be. Become different. And really advanced then I mean it if you look at it we're -- a very simple game. Today. A couple years from now who knows. When they're probably won't be the same reaction now. Alright well gentlemen we're gonna have to stop on that drew linings is the CEO and founder of repeatedly. Sandia you can find a RE PU -- ELY dot com you bought all the valves congratulations and now. And David -- -- is a partner at Mohr Davidow ventures MTV dot com you can find his work there don't -- he's working on and gave the command is the author of the book called game based marketing and the author of the fun where blog from where blog dot com. Gentlemen thank you very much make the time comin' really appreciated the -- and -- ventures and play in the game and a lot. -- him on and it came on indeed. And if you -- out and find out what's going on reporters roundtable you can follow this blog reporters roundtable that cnet.com. You can email questions or ideas for future shows to roundtable at cnet.com. And follow me on Twitter I'm Rafe RA FE for news on what's coming up next thanks everyone.