What's cooler than Facebook and Zynga? Combining what made each into billion-dollar companies -- social networking and gaming -- with psychology and data analytics and creating a completely new industry. It's called gamification and it's attracting an eclectic mix of employees eager to get in on the ground floor of the next big thing.
While venture capital and engineering talent are still pouring into the social and gaming sectors, hordes of game designers, salespeople, computer programmers and others are staking a claim in the burgeoning industry. While gamification is still in an "embryonic stage," it will eventually be used by 60% of mid-to-large sized organizations in the next decade, according to research firm Gartner Inc. The market for such services is estimated to reach $242 million this year and grow to $2.8 billion by 2016, according to a report by M2 Research.
In its simplest form, "gamification" is a marketing strategy that uses competition and rewards to prompt people to commit specific actions, usually buying things, but increasingly to motivate better employee performance. Just as teenagers once spent hours and pockets full of quarters at arcades so that they could get their initials at the top of the Pac-Man leaderboard, today big brands are using incentives like virtual points, trophies, and badges to keep customers buying their cars and watching their television shows and their employees making sales.
The whole business is wide open”
Combined with social networking that lets winners advertise their gains, gamification can be a powerful way to motivate behavior. "If I get a reward and I'm the only one who knows about it, it's not that big of a deal," says Kevin Akeroyd, the senior vice president of gamification company Badgeville. "When you put the social layer on top of the reward, it makes it that much more powerful."
Unlike some tech professions that treasure coding skills above all else, work in gamification offers the chance to collaborate with a diverse blend of colleagues drawn from various industries. Molly Kittle, 35, vice president of digital strategy at Bunchball, a San Jose, Calif. gamification company with 60 employees, for instance, studied experimental theater in college and learned how to code so that she could create a website to advertise her art.
At Badgeville, a Bunchball competitor based in Menlo Park, Calif., the company makes the varied expertise of its staff part of its sales pitch to customers like Samsung and eBay. "We're hiring Ph.D.s and behavioral psychologists and social game designers, so you're selling experience, psychology, game design," says Akeroyd.
Badgeville was founded in 2010 by Chief Executive Kris Duggan after 10 years in various executive sales roles, most recently as vice president of sales at Socialtext, a customer service technology company. Since then, Badgeville has quickly emerged as a leader in the gamification space. It has created gamified applications for companies like Active.com, a health and fitness site, where users get virtual high fives and status recognition from community members when they lose weight.
Among the non-traditional employees the company has hired are Oded Korczyn, a Ph.D. in cultural anthropology from Stanford, who helped create applications before leaving the company in March. Badgeville's regional vice president of sales, Omar Divina, studied philosophy at Yale.
Badgeville senior game designer Tony Ventrice has always been interested in psychology, taking classes in college on the subject and spending his free time "people watching." As a child he'd watch television commercials with an analyst's eye, trying to determine who marketers were targeting with their ads. After several stints at gaming companies including Zynga and Playdom, Ventrice joined Badgeville last June.
Shape a New Industry
The chance to shape a new industry is another attraction. "What I gained was being able to forge out this new field and be a part of defining what gamification is," says Ventrice. "No one knows how this business is going to work. There's no template. You can look at eBay and Amazon and say that's how we do it in e-commerce. Here the whole business is wide open."
Says Kittle at Bunchball: "You're following your own trail rather than following somebody else."
Bunchball was founded in 2005 by Rajat Paharia, now the chief product officer, to create social games for websites such as Facebook and MySpace. The sites couldn't then technically support such games, so Bunchball began creating gaming apps for television shows. It has built a fan community site for TV show "The Office," and a competition application for "Top Chef Texas," a cooking contestant show.
Bravo, the network behind Top Chef Texas, wanted to keep viewers engaged with the show even after their favorite contestant became eliminated. So Bunchball created a second-chance competition that lets fans complete online tasks and collect points to help their favorite chef get another chance on the show.
"It's always new; it's always exciting," says Kittle. "You're a mini-consultant for a variety of industries, all through the lens of making the customer experience more engaging and compelling. For me it's less about gamification than figuring out how to solve your problem in a way that your users love."
The abilities of gamification companies to recruit professionals like Ventrice, Kittle and others is essential to their success and so far they've been able to. "They're hiring developers from the big social game companies like Zynga and Playdom, so they have the chops to apply these mechanics," says Forrester Research analyst Elizabeth Shaw.
Write to Joseph Walker at Joseph.Walker@dowjones.com