The speaker on the webinar asserted that a channel loyalty program should include game theory, because a survey showed that 28% of programs now include gamification. Trouble is, game theory and gamification are not the same thing. In incentive marketing, there’s a great deal of chatter about gamification, but the thinking behind it can get pretty murky and it’s important to understand how this “must have” really works.

For starters, let’s look at the definitions.

Game Theory – Remember the film, A Beautiful Mind? It’s the true story of John Nash, Princetonian and mathematician, who advanced the concepts of game theory. It addresses the way decisions are made when there is uncertainty. It is part of the field of applied mathematics and sometimes used to predict behaviors. Some call it “decision science.” This advanced analytic approach is not really what program planners are talking about when they bring gamification to incentive programs.

Game Mechanics and Game Dynamics – These terms are used inconsistently and sometimes interchangeably, but they are actually not quite the same. As Gamification.org defines it, “Game mechanics are constructs of rules and feedback loops intended to produce enjoyable gameplay. They are the building blocks that can be applied and combined to gamify any non-game context.” In other words, how the game works and what are the rules – Think: If A, then B.  Game dynamics, though, are more fluid. This is where the behavior of the participants – including who they are and what motivates them – intersects with the mechanics of the game. Designers can work to create games with mechanics that will be used by players in a dynamic, engaged, and creative way to achieve goals or targets.

Gamification – Wikipedia’s definition of gamification is “the use of game thinking and game mechanics in a non-game context in order to engage users and solve problems.” As the Incentive Research Foundation (IRF) puts it in their article “Game Mechanics & Incentives: You Can Bet On It,” gamification is being used in incentives by businesses “for good reason. Gaming techniques such as leader boards, simulations, challenges, ‘top scorers’ and the like are natural extensions of performance-based work.”

Wait a minute… Leader boards? Top scorers? Challenges? Weren’t these elements part of incentive marketing all along? Absolutely.  The contests and programs incentive marketing companies create have always tapped into the human drives cited by the IRF: rewards, status, achievement, competition. We’ve even always used the mechanics they note: points, levels, leader boards.

The Economist article “More Than Just a Game,” states, “Level-headed management types, meanwhile, say that many of the aspects of gamification that do work are merely old ideas in trendy new clothes.”

So, what’s changed? Technology. The delivery of the challenge looks and feels more like the games we are already playing at home for fun. Do we forget we’re working when incentive program comes in the form of a video game instead of a poster in the lunchroom? Probably not, but it’s likely to be more familiar, more entertaining, and somehow less onerous.

Gamification provides a fun, new delivery of learning and goal-attainment in the workplace and feeds our innate desire for achievement. Jane McGonigal is quoted in the Financial Times’ article, “Skilful Players Can Get Ahead of the Game,” saying, “Games are not easy. They’re about being challenged. They fulfil a psychological need and they give us the feeling of mastery and success.”

It’s all about inspiring and engaging employees, after all. Games provide a fresh new way to deliver business content and to connect employees to incentive programs. It’s important, though, to keep in mind what the Economist cautions, “When a player gets bored of a video game, it is easy to buy another. When workplace games become dull, they are not so easy to put aside.”