Play to win: The game-based economy

Companies are realizing that “gamification” — using the same mechanics that hook gamers — is an effective way to generate business.

Since the advent of videogames, skeptics have questioned their inherent value: why do players spend hours accruing virtual points working towards intangible rewards?

Chalk it up to basic human behavior, which game makers have been trying to understand and appeal to for decades. The more effective a game resonates with users, the better its sales. The developer’s goal is to design a structure and system of rules in which players will a) enjoy the process or journey, and b) create a sense of added value. As gamers and developers have found, a fun process coupled with a system for incentives or rewards for a job well done can become downright addictive.

So it’s no surprise to some gamers — including yours truly — that the very same game-play mechanics that hook players are slowly wending their way into other parts of the economy, too.

With “gamification,” companies study and identify natural human tendencies and employ game-like mechanisms to give customers a sense that they’re having fun while working towards a rewards-based goal. In doing so, they hope the added value will enable and reinforce positive behavioral change across a wide spectrum of non-game-related issues — healthcare, finance, philanthropy, general lifestyle.

Check out the rest of the article by JP Mangalindan at CNNMoney.com Fortune Tech.