The Psychology Behind Gaming for Successful Marketing Strategies

Games in marketing have been used for over 40 years now. Yet, it’s the development of IT capabilities in the past 2 decades that has enabled us to take it to the next level. It’s a lucky timing for many marketers.

We’ve been seeing a steady growth in customer acquisition costs for the past 5 years. Meanwhile, customer engagement is decreasing, impacting the conversions. Furthermore, client loyalty (and thus retention) remains underwhelmingly low. Introduction games into your buyer’s journey can help fix all three problems boosting your sales funnel.

However, before hopping on this shiny train of customer entertainment and endless fun, we suggest studying the psychology of gamification first. Marketing is all about changing human behavior according to our goals and needs. To achieve it, we need to understand what drives this behavior and how the available tools can help us.

This is exactly what this guide is about. You’ll learn the basics of gaming psychology, the key gamification principles, and how you can use it in marketing strategies.

Winday gamification platform for marketing campaigns.

The guide is created by the Winday team of marketing experts and game designers with extensive experience in creating games that drive engagement, and boost conversions and retention.

The Psychology Behind Gamification: Why It Works

For the longest time, psychologists and educators have been fascinated with games and their impact on human behavior. The twentieth century with its rapid industrialization and globalization took the leisure industry to the whole next level. Leisure as a marketed commodity was no longer limited to the higher classes of society.

For the first time in history, games were marketed worldwide and became extremely successful. If you are old-school enough, you can still recall the craze surrounding games like Rubik’s Cube, Monopoly, or Scrabble. Simultaneously, we witnessed the rise of video games, induced by the rapid development of IT technology.

One of the first tile-matching video games, Same Game was released almost 40 years ago in 1985.

Anthropologists were the first ones to observe the behavior-changing impact of games on humans. Educators were the first ones to try and use gaming psychology to manipulate people’s behavior (see the history of badges introduction for Boy Scouts in 1908). HR took an interest in games back in 1973 trying to get people more productive. Finally, in 1981, marketers caught up with the trend, introducing the first reward system on planes.

Almost half a century later, gamification in marketing is a powerful tool to increase engagement, incentivize purchases, and boost customer retention. In this section, we will be unpacking the powerful psychological drives that make games so efficient in driving sales to help you achieve your quarterly goals.

Did You Know?
According to Market Research Future, the size of the Gamification Market doubled YoY between 2019 and 2020 and it’s continuing to grow, though not that rapidly. The current size of the market is $12.2B. The predicted growth rate of 28% will increase the market to $69.1B in 2032.

Before we dive deep into the intricate works of gamification psychology, we need to pay tribute to Dr. Richard Bartle, a long-term researcher of human behavior in games. He introduced the four main types of players: the achiever, the explorer, the socializer, and the killer. He created two scales: player’s relations to gameplay (active vs. passive) and player interactions (with game vs. with other players).

If you ever played games and enjoyed them, you might find it hard to put yourself in one of the categories. So are most of the players. We all enjoy exploring a great storyline, and we find it delightful if we can impact it and receive a reward like a legendary sword or a rare fruit that unlocks a new location. Many of us enjoy team play where we can socialize with different types of people and find an approach to each of them. Finally, competitive by nature, we love to outsmart others, achieve more, and show off.

Now, let’s see how it all plays out in our psyche and why gamification works.

Self Exploration

Probably the basis of gamification psychology is the peculiar relations people have with self, the aspect we’ve been contemplating for millennia, rom the ancient myth about Narciss to the modern self-concept theories. For most of us, the ability to actualize and explore ourselves is paramount for a happy and fulfilled life.

Games provide a vast field for both self-exploration and self-expression. We explore self when we play through exciting stories and check how we feel about certain things or even test different choices where possible. Self-expression is possible through customization and personalization. Check out the screenshot below:

The Sims 4 Create Sim Interface.

This is an interface of one of the most successful simulation games The Sims 4. The level of customization of the character there is incredible (and very friendly to people of color). There’s a range of default features, but you can tweak them by simply moving a part of a nose or an eye. Many players love creating their digital copies in Sims. Others are more interested in replicating celebrities or creating people with exaggerated features. Your fantasy is a limit.

Intrinsic vs. Extrinsic Motivation

As a marketer, your main goal is to change the behavior of your potential or existing customers in a way that increases your company’s sales. One of the easiest ways to impact human behavior is by influencing its driving factor, motivation. Psychologists point out two types of motivations: intrinsic and extrinsic, and games conveniently appeal to both.

Short overview of the differences between intrinsic and extrinsic motivation.

Intrinsic motivation comes from within the person. It is linked to what they enjoy doing and is thus more process-oriented. Extrinsic motivation comes from the desire to achieve a certain result and get a certain reward.

Well-designed games satisfy both motivations. They give us the satisfaction of the process, be it mindless tile-matching that sends us in a state of semiconscious flow or an endless almost automated monster-killing spree in the post-apocalyptic setting. They give us the sensation of achievement when we get a new item to decorate our in-game bakery, eliminate the threat to a fictional village, or receive a small present from our favorite online shop.

Rare item dropout in Diablo 3 screenshot.

Check out the screenshot of loot dropout in Diablo 3. The game creators studied the psychology of gaming very well and applied key principles in the mechanics. Most Diablo 3 players can feel an immediate rush of dopamine just by looking at this image (and some can even hear the specific sound with which the rare item drops out in the game).

Hands clenching in search of a mouse to grab the item as fast as you can. In the game, the animation is even more mesmerizing, with the orange beam of light glimmering in the dark corridors of the Diablo 3 setting. Some players find it hard to skip checking every potential place of loot.

Such is the power of extrinsic motivation. If you want to successfully utilize gamification for marketing, we suggest using both motivations. Speaking of rewards…

Dopamine and Reward Mechanisms

To understand the psychology of gamification, we also need to understand how the human brain works. One of the critical brain systems that controls our behavior is the reward system and its main neurotransmitter dopamine, is released in bulk when reward-related or loss-aversion behavior is anticipated.

Mistakenly labeled as a pleasure chemical in mass media, dopamine helps deliver signals from one neuron to another. You see, the information within our nerve cells is transmitted electrically. However, neurons never actually touch each other or other cells thus disabling electrical conductivity between them. To pass a signal, neurons release chemicals (neurotransmitters) in the synaptic cleft (a gap between their endings and signal recipient structures). Dopamine serves as a neurotransmitter in several key neuron groups, including the nigrostriatal pathway and mesolimbic pathway in charge of reward-related cognition, wanting, liking, and positive reinforcement.

Dopamine release in synaptic cleft.

Games with their victories and losses stimulate the release of dopamine and the pleasurable sensation of reward anticipation and gain. Marketers utilize this aspect of gaming psychology to build customer experiences based on the expectations of reward. The best part? People tend to return for the sheer sensation of increasing your customer retention rate.

Illusion of Free Will

The basis of any gaming activity is free will. Some psychologists argue that people can’t play if they are forced to participate because games exist for fun.

Here’s a little story. Utrecht, a small municipality in the Netherlands, built a dam on its river. Unfortunately, the construction blocked the passage of the fish from the ocean back to the springs where they were born to reproduce. They tried to fix the issue by opening the dam once there were enough fish there. The activity attracted many predators to enjoy a free easy-to-catch meal. First, the municipality considered opening a position of a fish-watcher (which honestly can be so excruciatingly mundane) who will only be employed during the spring. However, this idea was quickly rejected.

Instead, Utrecht ecologists decided to apply the principles of gamification to solve the issue. They created a website where anyone can monitor the fish through the camera installed on the dam. Once they observe the fish, they click on a doorbell to open the dam gate. It’s called Fish Doorbell, and many participants think it’s the sweetest thing.

Fish Doorbell even shares the cutest photos of the fish that people let through the damn on their website.

More importantly, the participants of Fish Doorbell do an otherwise tedious job for free and on their own accord. Because fish monitoring is turned into a game with a clear reward, they are ready to spend time checking the murky water stream and pressing the button.

In other words, games can make people do whatever they want with contentment and eagerness. That’s why so many HR organizations and marketers are so interested in gamification principles and platforms. Every business wants to impact human behavior in a way that feels least intrusive or forceful.

Achievement and Progression

People love to see the progress of their activities. We are natural goal-setters and goal achievement improves our subjective well-being. It is strongly associated with growth and development, improving our skills, and bettering our lives. Remember, that personal growth gives us not only a sense of accomplishment and self-actualization. It also triggers our most basic needs according to the Maslow pyramid for life preservation and security. If we improve ourselves, we can become better at survival. It’s a powerful subconscious trigger and one of the core aspects of gamification psychology.

Screenshot from a guide dedicated to leveling up in Baldur’s Gate 3, one of the best games of 2023.

Games utilize our natural desire for development and growth by offering a level-up system. Simultaneously they balance this system by making challenges more complex. Once you’ve improved your skill and your character has gained new abilities and items, the ingame bosses become tougher. This enables the game to constantly keep the players on edge, engaged, and striving for more. If you look at Steam, you can see that many games offer separate sets of in-game achievements for people desiring to spice up their progress.

Tip
Make progression look and sound special. Sparkly animation and cheering sounds can help you strengthen the emotional effect of the progression.

Immersion

Immersion is one of the core aspects in the psychology of gaming. We all want to run away from the reality from time to time and human culture is instrumental in our escape. From the first myths told by our ancestors around the campfires surrounded by darkness and wolf howling the culture evolved into the game titles that enable us to relieve the same experience in safety of our homes.

Many modern video games use a great story to keep their players engaged. In fact, many gamers say that today, playing games is like watching a movie/cartoon or reading a book that you can actually control. The attempts to add gamification to the movies were made with the development of streaming platforms but the potential is yet to be fully realized.

Black Mirror: Bandersnatch is one of the first attempts of video streaming services to try gamification in a show.

In our opinion, immersive experiences and the escapism that people love about the games are yet to be explored and used by businesses. It’s definitely a future of gamified marketing as it gives so many opportunities to build your brand. Providing an immersive gaming experience consistent with your brand identity and story can help you strengthen brand recognition and attachment to it.

Social Influence and Competition

When talking about the social aspect of gamification psychology, we mentioned above that players are divided into two categories – killers and socializers. The former plays to compete, and the latter plays to connect. Social drivers are some of the most powerful ones. As a species, we achieved complete domination on the planet by utilizing our ability to cooperate and learn from one another. We tend to build strong bonds and form groups. Simultaneously we want to compete for power and authority within and outside our groups. This need is rooted in the security we can achieve through domination over others.

A screenshot of a player’s in-game achievements in Horizon Forbidden West. Check out how each achievement mentioned the percentage of players who attained this goal and how the rare ones are shimmering with gold to emphasize the player’s uniqueness compared to other players.

Some of the most popular game genres cater to these social and competitive dynamics. Many successful game titles for both casual and competitive gaming enable users to form alliances with friends against other players. Such examples include MMORPGs, MOBAs, survival games, simulation games, etc.

This screenshot is from a survival game featuring an assault on another player’s base.

Many casual games have a “social” mode, where you can form a team and help your teammates with in-game items (such as lives or boosts). You can visit their in-game spaces and check out how your friends arranged them to envy their progress, admire their taste, or boost your own ego, because you’ve achieved more.

Tip
Never underestimate the prosocial drivers. They are as powerful as our desire to compete. Prosocial behavior such as help and cooperation is linked to the powerful hormone oxytocin engaged in maternal behavior, pair bonding, and other key human behaviors. It is considered the hormone of true love.

Marketers can use prosocial behavior to boost referrals. Propose your clients to invite their friends to win amazing prizes together.

Game of Chance

Many modern games use “chance” mechanics to spice up the gameplay and gain profit, from casual games like Candy Crush to masterpieces like Baldur’s Gate 3. This is something few platforms offering gamification for marketing are ready to discuss openly because it’s borderline gambling. Well, the psychology behind it is.

There are many ways games can use “chance” or “schedules of reinforcement” as Skinner called them. They can be boiled down to 2 main types:

1. Procedural
2. Result-changing

A modernized version of Mahjong, where the outcome depends on your attention, ability to strategize, and sheer luck is a great example of a procedural chance game.

Usually, gamification for marketing uses both types of chance. You can observe the procedural chance in casual games like three-in-line or card games. You have a large field of possibilities that may or may not result in victory. Winning depends as much on the player’s choices as on mere chance (like the position of cards in the deck or the dropout of gems).

According to Wikipedia, Candy Crush which uses this specific mechanic is the most-played video game with 500M players worldwide. Furthermore, there are hundreds of games in the same genre or using the same mechanics. It indirectly signifies the efficiency of procedural chance games in engaging large audiences.

Result-changing chance is more hard-core and straightforward. In a nutshell, it’s a roulette or dice. You have several options you can get and next to no control on how it goes. For example, many online stores use roulette with various types of prizes to incentivize the completion of purchases.

Check out the example of the result-changing chance used by the Temu application to make people finalize their purchases. They also used a time limit for the offer to create a sense of urgency for the buyer.

Interesting fact
There are many theories as to why the game of chance has such a huge impact on human behavior. For example, Dr. Skinner conducted a series of experiments with randomized food schedules for pigeons conditioned to peck on a red dot for food (check out the video below). He found that the birds continued pecking behavior despite the prolonged delay in food delivery. He compared such behavior to gambling.More recent studies showed that pigeons consistently preferred randomized schedules to stable ones. Furthermore, the popularity of “chance” mechanics in games throughout human history and present in most cultures signifies that our species is also susceptible to it.

Summing up, games apply to some of our core needs such as social recognition, personal growth, the need to immerse in fictional worlds, and motivation. They also utilize deeper subconscious aspects of our psyche that are beyond our direct control, such as our strong emotional response to games of chance. And that is exactly the reason why gamification works in marketing, HR, and education. This being said, we suggest learning the key gamification principles before introducing games in your next marketing campaign. We review them in our next section.

Core Principles of Gamification in Marketing

Now that you understand the psychology of gaming, it’s time to see how it translated into marketing gamification. In this section, we’ll discuss the core principles of gamification for marketing campaigns.

Clear Objectives and Rules

This is one of the most important gamification principles. Set clear objectives for the game. For example, win the match and get a 20% discount on Product. Make it known to the user what they receive in the end. You also need to explain the rules of the game. That’s why many marketers prefer using the most popular games where rules are simple and known to the majority of Internet users.

Bubble shooters are some of the easiest and known games worldwide.

Keep in mind that it takes time to read through the rules or test the rules within the game. With a short attention span, it’s best to keep it as short and sweet as possible.

Reward Systems

We discussed how crawling for rewards lies at the core of gaming psychology. It drives dopamine surge and helps people feel fulfilled. That’s why we suggest planning the reward system for your clients.

There are several types of rewards you can apply in the game:

1. Immediate prizes (digital or real objects or discounts)
2. Points (collectible points can then be exchanged for other types of rewards)
3. Badges (status thing showing your achievements)
4. Perks (certain limited capabilities, e.g., access to limited collection)
5. Mixed rewards

If you are only embarking on this journey and you do not have any loyalty program, we suggest opting for immediate prizes or perks. First, they are easier to understand for your customers who might be lacking experience with other types of rewards. Second, they are easier to plan and manage.

An example of a points system in Steam that can be exchanged for special items like a profile background or a startup movie.

Levels and Progression

This is one of the most misunderstood gamification principles. That’s why we suggest to use it only after gaining some experience with gaming marketing. If you have a system of badges or points, it’s best to assign levels for the participants. Similar to the game, when a customer only starts their journey, gaining a new level is easy and doesn’t require many points. However, the further they go, the more points they need to level up.

This is done for several reasons. First, giving up too many discounts, freemiums or other small rewards is cost-efficient and will impact your CAC. Second, the preference for increasing difficulty of challenge lies within the psychology of gamification. If you make it easy all the time, players will lose interest very soon. At the same time, you shouldn’t overcomplicate the progression because most people will not want to engage with such system.

The Character Progress in Witcher 3 has been a target of many friendly jokes within the gaming community for its complexity. It’s something that most gamers are ready to forgive (and hard-core gamers tend to enjoy) but not something you should apply in gamification for marketing that’s for sure.

Personalization

We talked about the love of people to express themselves in games. Obviously, you can’t reach the level of personalization that an AAA title like The Sims 4 can offer. However, a bunch of avatars and backgrounds for your players can make their experience more memorable and their connection to your brand stronger.

Losing

Losing might seem counterintuitive on the surface. However, it’s at the core of game mechanics in many games for a reason. Geoffrey Engelstein, a prominent game designer, pointed out in his book that the feeling of loss is much stronger than the feeling of gain of a similar object. That’s why the aversion to loss is a powerful driver of human behavior and is one of the key principles of gamification.

Loss aversion behavior graph.

The prospect of losing a reward can sometimes force people to invest much more resources than they initially planned. This is especially true in settings like games because the actual loss of resources doesn’t seem real since it’s happening in a fictional environment.

Tip
Add a losing option to your game to make the reward more wanted and more rewarding once they get it.

Benefits of Gamification in Marketing

Often our many marketers who want to introduce gaming experience in their campaign, find it hard to communicate its advantages to the business. In this section, we explain how gamification for marketing has a positive impact on:

• User Engagement
• Brand Loyalty
• Data Collection
• Conversion Rates
• Retention

Let’s take a closer look at each of these benefits.

Enhanced User Engagement

In the era of many digital distractions, it’s hard to retain focus for a long time. Furthermore, we have a whole new generation that doesn’t remember life without smartphones (honestly, do we even remember it?) and has even smaller focus retention abilities.

Gamification can help us not only retain the focus of our customers but actually make it fun and pleasurable.

An example of a gaming experience that enables you to win a discount powered by Winday.

Increased Brand Loyalty

Gamified marketing can enhance brand recognition by creating a powerful emotional connection with your brand. It will help you stand out among other similar businesses. Furthermore, it will be a memorable experience.

Finally, by engaging your customers in repeated gaming experiences you can boost the loyalty to your brand.

Data Collection and Customer Insights

Gamified marketing platforms offer their clients the analytics on in-game behavior of their customers. It can help you track the engagement, gain valuable insights, and tweak campaigns to boost conversions and retention.

An example of a gamification marketing platform dashboard with analytics showing the engagement rates of customers with the game.

Boosting Conversion Rates

With so many saturated markets, it’s really hard to stand out against the competition, especially for retailers selling similar things. Gamified marketing techniques can help you stand out, as in many areas it is still a novelty.

Another popular issue that can be solved with gamification is the incompleted purchase. Marketers have been trying hard to incentivize such customers to return to the online shop and complete their purchases.

After a short decrease around the pandemic period, the cart abandonment rate is on the rise again.

Tip
Create a minigame that will enable your potential client to get a reward like a small discount for their first purchase. Customize it to meet your brand style. Track the performance.

Improving Retention

The best customer is the one who returns, we all know it. Many marketers struggle to keep customer acquisition costs low. Meanwhile, customer retention enables you in most cases to skip a step or two in leading the customer through your carefully built sales funnel.

Changes in the average cost of customer acquisition in 4 years: B2C segment

The growth rate of CAC wasn’t equal in different B2C industries and ranged from 20% to 100% forcing marketers to pay closer attention to customer retention techniques.

Gamification helps create memorable moments with your business and increases the chances for a customer to return for the next purchase. Furthermore, a carefully orchestrated game with multiple tiers and rewards will motivate them to return to your business to achieve a new level, get a new prize, and win even more.

Driving Upsell

It is great when a customer purchases what they planned. It is even greater when we manage to convince them to buy even more products or choose to upgrade to a premium product or service.

Games can help us achieve this goal by utilizing one of the most powerful aspects of gamification psychology, the competition for status with others.

Tips for Integrating Gamification into Marketing Strategies

Introducing gamification in marketing campaigns can have hidden pitfalls and issues. In this section, we explain how to utilise the psychology of gaming to avoid the issue and make most out of the games in your marketing campaigns.

Know Your Audience & Set Goals and Rewards Accordingly

The basis of any marketing success is a profound understanding of your target audience. This knowledge will help you pick the type of game, the reward system, and the style of your game. You need to understand what kind of prizes will incentivize them to participate in playing in the first place.

An example of a game style for a company selling racing gear created on Winday gamification platform.

Leverage Simple and Engaging Game Mechanics

You are not designing the next AAA game title, esports sensation, or casual gamers’ craze. Game mechanics must be simple and straightforward for several reasons:

1. Your goal is to sell/retain customers, the game is just a tool
2. Games with complex mechanics have a learning curve, meaning it’ll take time for people to actually achieve the major game goal (attain a discount).
3. Many players stop playing if the mechanics are too complex and not fun.

Essentially, in most cases, you don’t need to invent the game. There are plenty of available games with rules that are understood almost universally on marketing gamification platforms. They are readily available for you to choose and incorporate into your platform.

An example of standard games with known and easy mechanics offered for marketing campaigns by Winday.

Monitor and Adjust Based on User Feedback

A common mistake we’ve seen over the years is the lack of monitoring and control. Marketing is a complex process of trial and error. What works for one business doesn’t necessarily work for yours. The hands-off approach rarely brings fruit to our line of work.

Luckily, you can monitor the performance of your campaign and tweak it on the go to see how your target audience responds.

Winday Gamification Platform for Marketing Campaigns

We’ve already mentioned in passing how marketing gamification platforms can help you introduce gaming in your marketing campaigns. Now let’s talk about it more in detail.

Winday Gamification Platform Interface.

Winday is a gamification platform built to help your business integrate games into your marketing campaigns. The benefits of using Winday include:

1. Cost efficiency. Your business can save money on developing a game. You can use one of several readily available games that Winday offers to our customers.
2. Experience. When doing games for marketing in-house, you will inevitably make mistakes. Using a readily available platform can help you avoid it.
3. Launch time. Because we have all the necessary technology in place, launching your first campaign can be carried out within a day. Just pick the game, and its style, set the campaign parameters, and get a link. You can also integrate it on your website.
4. Ease of use. Winday is easy to use and has an intuitive user interface.
5. Customization. Some of our clients want unique games or apply their brand style within the default games. Both options can be arranged by our developers.