PDF Summary:Actionable Gamification, by Yu-kai Chou

Games have the power to unlock deep reserves of human motivation that drive customer and employee behavior. However, many businesses that try to incorporate game elements into their business strategy end up failing. Yu-kai Chou can explain why. As a professional gamification consultant, he explains the most effective ways to incorporate game elements into your business strategy.

His book, Actionable Gamification, is a strategy guide for business gamification. It explores why some gamification systems are addictive while others are tedious, and why some inspire long-term devotion as others fizzle. Our guide will walk you through Chou's strategies, exploring the motivations that keep players engaged, how to balance them, and how to incorporate them into your business. You'll learn how games tell compelling stories, why so many games use "mystery rewards," and how gamification can grow your business. Our guide adds insight by further exploring the psychology behind game mechanics and comparing Chou's strategies to other theories of game design.

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Strategy #3: Tempt Players to Own and Accumulate

Players are also motivated to play games out of a desire to own and accumulate things. Chou asserts that people tend to care about something more when they feel it's their own. This is even true for virtual items and currency that only exist within a game, like collectible rings in Sonic the Hedgehog. Therefore, you can encourage players to invest themselves more deeply in a game by giving them a chance to own and accumulate things. He offers three strategies: instilling a sense of ownership, creating collection sets, and restricting availability.

1) Instill a Sense of Ownership

Chou recommends that you can motivate players to engage in your gamification system by instilling in them a sense of ownership. People are naturally more attached to something if they feel it belongs to them. Chou offers two strategies for cultivating a sense of ownership: Let players customize items, and make players feel like something already belongs to them.

First, players are more likely to feel a sense of ownership over something if they can customize it. Every time you let players make choices—even small cosmetic ones—they are investing their creativity and effort into something and "making it their own."

Second, you can get a player to feel a sense of ownership if you frame the item as a prize or reward—something they’ve won or earned. Some gamification systems utilize this by requiring players to take certain actions to "keep" their rewards. The success of these mechanics depends on whether players feel a genuine sense of ownership. For example, mail-based marketing tactics will often tell readers that they've "already won" a prize, they just need to claim it. Then claiming the prize requires complying with the goals of the marketing campaign.

Why Do People Overrate the Things They Own?

Cultivating ownership encourages people to continue investing in games because, as research shows, people tend to overestimate the value of things that they own. In Predictably Irrational, Dan Ariely offers three reasons why people tend to overvalue their possessions.

• People become emotionally attached to familiar things. Therefore, the longer you own something, the more attached to it you can become.

• People focus on potential losses more than potential gains. Because they are naturally oriented to avoid loss, they will work harder to hold onto something than to gain something else of equal value.

• People assume that others share their perception. This means that if something is valuable to you, you’ll likely assume that it's equally valuable to others even though they aren't influenced by the same loss-aversion and ownership bias.

2) Group Objects Into Collectable Sets

Chou recommends that you can make an object more desirable by making it part of a collectible set. Many players will have a strong drive to complete a set once they already have some of the items. For example, if trading cards are grouped into sets of colors, many collectors will be more attracted to a card if it belongs to a set of which they already have a few cards. Companies that sell collectible coins also often group them into sets to encourage collectors to buy the whole set.

(Shortform note: To most effectively leverage the motivational power of collectible sets, it helps to understand why so many people collect things in the first place. While many psychologists find the origins of the impulse mysterious, some have posited a few key drives that inspire collectors. Some collectors are drawn to rare and unique items because they find it satisfying to own something distinct that few others own. Others like the idea of bringing rare things together that previously existed apart. Still others enjoy the satisfaction of organizing their collections to create a sense of order. Finally, many collectors are motivated by the sense of anticipation at finding and obtaining some new object: It's the thrill of the chase.)

3) Restrict Availability

Chou stresses that you can also make an object more desirable by restricting its availability. People naturally place a higher value on something scarce, so by limiting the availability of an object, you can increase its value. The more difficult something is to obtain, the more desirable it can become.

Chou recommends two ways you could incorporate this into your gamification system. First, you could offer a lure by showing a valuable reward that can only be obtained through great time and effort. This will reinforce the desirability of the reward in the player's mind. So if you offer customers a tiered set of prizes in a loyalty rewards program, show them the biggest available prize to reinforce its desirability.

Second, you can leverage the motivating power of scarcity by reducing the available time to take an action or claim a reward. By narrowing an opportunity's availability, you will increase its value in the player's mind. For example, if a player wins a reward, you could restrict the times at which they are able to claim it, forcing them to come back later to collect.

You can also present your player with a vanishing opportunity, then provide a deadline or a countdown timer showing when the opportunity disappears. This is why many old arcade games give their players 10 seconds to continue their game with another quarter after running out of lives. Many marketing campaigns have adopted this strategy of making their offers available for only a limited time.

How Scarcity Motivates Us

In Influence, Robert B. Cialdini expands on why restricting availability makes something more desirable. He identifies two key principles at work.

First, many people use availability as a shorthand for value. Caldini attributes this to the laws of supply and demand—if there's a high demand for something but not very much of it, then the price increases. However, the scarcity of an item doesn't actually tell us anything about its demand. A rare item could be highly desired and therefore valuable, or it could just be rare and unwanted.

Second, Caldini argues that people want what is scarce because of a phenomenon called "psychological reactance." This occurs when people feel resentment at having their choices limited and therefore react against the limitation. When people can't have something, they feel that their freedom is being restricted. Therefore, they try to push back on the restrictions—in this case by trying to get the very thing they feel they're “not allowed" to have.

Strategy #4: Encourage Relationships

Humans are social creatures by nature. Therefore, many games motivate people to stay engaged and keep coming back through socializing and relationship-building. Chou suggests any game mechanic that involves teamwork, collaboration, group formation, or even competition between players can use social dynamics to keep players engaged. He offers three strategies to incorporate this into your gamification system.

1) Foster Mentorship

Chou suggests that you can leverage the motivating power of relationships by creating mentor/mentee relationships between players of differing skill levels. By being mentored, newer players will feel more motivated to engage in the game because they feel that someone else is investing their time and energy in their development. Mentorship opportunities will also give more experienced players a reason to stay invested in the game longer.

For example, many management strategies incorporate mentorship into their training programs. The mentors are the "veteran" players who get a new reason to invest in the company, while the trainees are the "newbies" who start their work at the company by investing in a social relationship.

Why Are Mentor/Mentee Relationships So Rewarding?

In designing your mentorship opportunities, it helps to take a look at why people are motivated to mentor each other and what makes for a successful mentor relationship. Writing in Drive, Daniel Pink argues that people are naturally hardwired to want to help others. Some psychologists also argue that age plays a role. When people reach middle age, they often enter a stage of life called "generativity" in which people tend to focus more on investing in the next generation.

Psychologists have also found that the best mentor/mentee relationships are founded on mutual sharing and reciprocity—that is, the more experienced party doesn't only provide information, both parties get to know each other and build a trusting relationship together. Research has also found that despite these benefits, mentor relationships don't always happen on their own. This is why it is helpful to consider giving people the option to sign up for a mentor program and then intentionally pairing them together.

2) Create Community

Chou states that you can motivate your players by fostering a sense that they are contributing to a community. People are often deeply devoted to their communities and group identities. If someone feels they belong to a community, they will naturally want to contribute to the group and keep coming back for a sense of belonging.

Chou explains that communities also motivate people to engage with a gamification system through peer pressure. If you can create a situation where player communities establish clear norms of behavior, this can motivate new users to follow suit upon joining the community. Let's say your product has a message board where users can post about their experience. New users will be more likely to start using a feature if they see others in the community doing it first.

(Shortform note: In The Power of Moments, Chip and Dan Heath shed light on why group experiences can be so rewarding. They explain that group experiences build connections between people. As people form connections, they deepen their mutual understanding, feel a sense of validation, and feel more cared about. However, Chip and Dan Heath also argue that merely spending time together in a group setting is not enough—people need to share meaningful moments together. To create these moments for people, they recommend allowing people to struggle together or connect over a shared goal or mission.)

Strategy #5: Allow for Creativity

Chou explains that many people want to play games out of an intrinsic desire to create and invent. Many players find it rewarding to make their own choices and craft something completely unique to them. This is why so many kids enjoy playing with clay or blocks, and why so many people of all ages choose artistic hobbies. Chou asserts that this motivation is the most important for keeping players engaged over the long term.

For your gamification system, Chou stresses the importance of giving players options. If there is only one path to the win condition, players may feel that they are forced into narrow, linear choices. However, once you give them a few different paths to take, it will feel as if they’re forging their own trail to victory. For example, many companies will allow customers to customize the product by providing a variety of options. However, Chou also cautions that too many options at once can be stifling or confusing, as players aren't sure how to choose between them all.

Why Do People Find Creativity So Rewarding?

In designing gamification systems for creativity, you can design a richer gaming experience by understanding why people find creativity so rewarding. Here we’ll review three explanations.

• Some psychologists have posited that creativity plays an important role in enhancing emotional well-being, as it allows people to find more rewarding solutions to their problems in life.

• Writing in Big Magic, Elizabeth Gilbert argues that creativity is rewarding because it allows for self-discovery. As you challenge yourself to come up with new solutions, you discover hidden gifts and new parts of yourself you didn't know were there.

• Brené Brown, writing in The Power of Vulnerability, focuses on the role of self-expression. She states that creativity allows people to live more wholeheartedly. By expressing their pent-up impulses and desires, they’re able to cathartically transform them into something visible.

As you design your gamification system, think about how you can give players a chance to explore and express themselves in new ways.

Strategy #6: Entice with Randomness and Mystery

Chou asserts that players are also motivated by curiosity, unpredictability, and mystery. This is because people are naturally excited and stimulated when they encounter new experiences. By adding randomness and unknown outcomes to your gamification system, you can tap into the powerful drive of curiosity to keep your players engaged. Chou recommends two strategies: offer unpredictable rewards and unpredictable outcomes.

1) Offer Unpredictable Rewards

Unpredictable rewards are ones where a player doesn't know what they're going to get. Chou explains that people are excited by the possibility, novelty, and anticipation of an unpredictable reward. If a player doesn't know what they're getting, then it feels like opening a present. This is why many game shows offer contestants the ability to trade their prizes for a mystery prize. This is also why trading cards are often sold in packs with random cards inside. The mystery makes it exciting for customers to open up the pack and see what's inside. If your gamification system includes rewards, consider offering a box whose contents are unknown to the player, or try letting players spin a prize wheel of potential awards.

Why Are Unpredictable Rewards So Compelling?

In Hooked, Nir Eyal and Ryan Hoover theorize as to why unpredictable rewards are so much more compelling than predictable ones. They argue that many of the most important rewards in human evolution were unpredictable from moment to moment. For example, hunting and gathering would yield very different results from day to day, so people may have developed a strong motivation to stay persistent in pursuing unpredictable rewards. Also, social rewards like validation and acceptance are out of people's control and therefore unpredictable. But these rewards are still very important to people’s well-being and therefore highly sought after. Eyal and Hoover argue that these evolutionary pressures encouraged humans to pursue unpredictable rewards.

2) Incorporate Unpredictable Outcomes

As well as randomizing rewards, Chou explains that a lot of games incorporate unpredictable outcomes into the gameplay. For example, just think of how many games involve rolling dice or drawing cards. Adding unpredictability to game outcomes and mechanics can add excitement and freshness each time people play. This is because with unpredictable outcomes, there's always a chance of winning and being surprised. For example, if your company is designing an app to drive engagement with your brand, consider adding randomness by giving players a chance to use random number generators or prize wheels as part of their app experience.

(Shortform note: Studies have found that a sense of suspense and unpredictability play a bigger role in a player's enjoyment than winning. Researchers have found that people are more likely to want to play a competitive game again if the outcome was close than if they won by a large margin. Once people can predict the outcome of a game, it becomes boring, even if the player gets the outcome they wanted.)

Part 3: Balancing Motivations

Chou explains that diversity of motivations by itself isn't enough for an engaging gamification system. You also need to balance these motivations and consider how they work together. Chou identifies several categories of motivation that need to be in balance to create an engaging gamification system for your business: Internal motivations need to be balanced against external motivations, and positive motivations need to be balanced against negative motivations. In this section, we'll explore these categories and how to balance them in your gamification system.

Internal vs. External Motivation

In planning your gamification system, Chou explains that you'll need to balance external and internal motivations.

External Motivations

Chou defines external motivations as drives to obtain rewards outside of the activity itself. For example, trophies, points, lottery payouts, and other prizes may motivate someone to overcome a challenge they wouldn't otherwise enjoy or find rewarding. External motivations include those we discussed such as owning, accumulating, and achievement. In your gamification system, these could be rewards for customer loyalty, bonuses for employees, or points users earn for unlocking achievements.

The Role of External Rewards in Reinforcing Habits

In Atomic Habits, James Clear elaborates on the power of external rewards in making an activity habit-forming. He explains that rewards condition people's behavior so that they will try to obtain the rewards again in the future. He breaks this process down into four parts:

• The cue occurs when the brain notices the possibility of a reward. In your gamification system, this signal will have to be part of the feedback system that gives players information.

• The craving is the emotional desire for a reward. Players experience a heightened emotional state of desire. Some games create space for this craving by allowing a window of time between the signal and the action that produces the reward.

• The response is the action that you want the player to take. In your gamification system, these will be aligned with your ideal behaviors.

• The reward is the final payoff a player receives for taking a desired action. This will reinforce the behavior and prepare the player to experience the whole cycle again once they encounter the cue again.

Internal Motivations

Chou defines internal motivations as drives to engage in an activity without obtaining an outside reward. In other words, people find the activity itself rewarding. Internal motivations include creativity, social engagement, and mystery. This is because people naturally find it satisfying to create things, make relationships, and satisfy their curiosities. In your gamification system, these could take the form of letting customers customize their product or post messages for other users on a chat forum.

Chou stresses that games need internal motivations to keep players engaged for the long term. However, a game that over-relies on internal motivations can also have its shortcomings. Players may not have a reason to engage in a game at first without an external reward. They won't know how fun it is until they try, and they won't try unless given a good reason. Therefore, balancing internal and external motivations is essential for an effective gamification system.

Let's say you want to gamify your user's experience of a learning app. If you are already giving users points for lessons completed or prizes for major milestones, then you'll need to balance these out with internal motivations. Consider adding opportunities for collaboration and building teams or diversifying choices so that users can pick their own curricula.

The Role of Learning in Internal Motivations and Game Longevity

In A Theory of Fun for Game Design, Raph Koster sheds light on why internal motivations may be more important for longevity than external motivations. Koster argues that games stay interesting so long as players are still learning. While they continue to experience novelty and recognize new patterns, players find games engaging. However, once a player understands the game and it becomes predictable, they will quickly lose interest. This explains why people can devote their careers to learning and teaching Go, a classic Chinese board game with 3361 possible board configurations, but not Duck, Duck, Goose. Go is complex enough that a player can continue learning strategy throughout their life, but Duck, Duck, Goose is simple enough that a player quickly runs out of new strategies to learn.

Chou's internal motivations all involve types of learning. When players draw on their creativity to create their own strategies, they get to keep discovering new things and testing out new ideas. Games that are unpredictable and have uncertain outcomes stay engaging because players are constantly gaining new information as they discover possibilities they couldn't predict. Finally, people find social relationships rich and rewarding because, as relationships grow deeper, people will continue learning new things about each other.

Positive vs. Negative Motivations

Most of the six motivations also fit into a second set of categories: positive vs. negative motivations. Chou argues that most successful games strike a balance between the two. In this section, we'll define each, talk about the motivations that fit into each category, and discuss how to balance them.

Positive Motivations

Chou states that positive motivations make players feel good during the game. The benefit of positive motivations is clear: People will keep playing a game if it makes them feel good. Positive motivations include a sense of purpose, growth and achievement, or creativity and invention—doing something important, gaining prizes, or making their own choices all make people feel good.

If you need to add more positive motivations to your gamification system, consider telling players an epic story about how their participation is contributing to a better world. You could give players more points and badges to earn. Or you could provide more options for customization.

(Shortform note: Researchers have sought to answer the question of why people enjoy playing games. In other words, what is it about the positive motivations that make people feel good? One theory maintains that games allow people to experience parts of their ideal selves. For example, games that foster a sense of purpose will appeal to people who want to do something impactful with their lives. Achievement or creativity will appeal to people who want to accomplish big things or create their own solutions. Therefore, when designing your gamification system, don't just try to figure out who your players are. Figure out who they want to be. Then design your gamification system to provide that experience.)

Negative Motivations

Chou identifies negative motivations as ones that make players feel pressured or compelled to take an in-game action. Negative motivations would include limited opportunities, randomness, or any situation where the player has to take a certain action to avoid loss. These include countdown timers, peer pressure, or scarcity.

These motivations can add layers of excitement and urgency that keep players coming back. For example, a countdown timer might make a video game feel more stressful, but it can also make the game more exciting and lead to a greater feeling of accomplishment if players beat the timer. Losing a poker hand may feel bad at the moment, but giving players the ability to take risks adds excitement to the game.

You can incorporate more negative motivations into your gamification system by offering players vanishing opportunities, like a prize that needs to be redeemed within a specific timeframe. The fear of not having something everyone else has is a strong negative motivation, so you could build tiers into your gamification system, where some customers are able to access perks that others will have to earn.

However, Chou offers two important caveats.

1. Negative motivations need to be used very carefully, as they can make the experience addictive. If players feel addicted, Chou warns, they will try to break the addiction by leaving the game and never coming back.
2. Chou also advises that negative motivations need to be used ethically. To implement these game mechanics ethically, you must be transparent with your players about the purpose of the game and its mechanics. This gives players a chance to knowingly opt in or out of the game before they become invested.

Can Players Become Addicted to Your Gamification System?

Chou explains that negative motivations have the ability to pressure players into becoming addicted. He explains this is usually a bad thing for gamification systems, as people who are addicted will have a negative experience and leave the gamification system for good as soon as they’re able to. Therefore, it may also help to understand some of the risk factors for addiction to games.

Researchers have found that people are at the greatest risk for getting addicted to games when they are using them as a form of escapism, often from anxiety and depression. People also struggle with game addiction if their social network excessively relies on people they know through the game. While you may not know the risk factors in your target demographic, this is still something you might want to consider. For example, if you know your product is intended to help people with depression or low self-esteem, the ethical choice may be to go easy on stressful, compulsive game mechanics.

Balance Positive and Negative Motivations

Chou encourages designers not to think of positive motivations as good and negative motivations as bad, but to keep them balanced with each other to prevent a one-sided gaming experience. Positive motivations can keep games rewarding in the long term. Negative motivations can increase the sense of urgency in a game, making them more exciting.

Let's again say that you're designing a learning app. If you already have opportunities for users to win points, collaborate, and exercise their creativity by customizing their own curriculum, then your app has plenty of positive motivations. You could balance it out by adding an element of gambling with unpredictable rewards or random outcomes. Or you could limit opportunities by making certain lessons or prizes only available at certain times. Or you could create a challenge mode where users have a countdown timer to complete lessons.

On the other hand, if you're already using unpredictable rewards, countdown timers, or vanishing opportunities, you may need to add more positive motivations. Reinforce the story that makes players feel they're accomplishing something important, add more prizes and points, or give players more options so they can creatively invent their own curriculums. By blending positive and negative motivations, you can create a learning app that is compelling enough to be habit-forming while rewarding enough for users to invest in long term.

Long-Term and Short-Term Rewards

Chou emphasizes that negative motivations can make games more compelling in the short term, while positive motivations make them more rewarding in the long term. Therefore, we can also understand how they work together by looking at how the brain pursues short-term and long-term rewards.

Researchers have found that short- and long-term rewards are pursued by different systems in the brain. These systems are often in conflict with each other: For example, should you save money for retirement or spend it on a fun experience now? One system in your brain wants the fun experience (short term), while the other wants the long-term reward of a secure retirement. Looking at gamification through this framework, we can see that successful gamification systems are able to activate both parts of the brain. You work toward long-term goals like mastery and purpose by obtaining short-term rewards like points and prizes. This reconciles the conflict between the reward systems, providing a channel for them to work in tandem.