And what it means for developers.
Gabe Zichermann is CEO of iPhone developer beamME, and is also the co-author of a book called Game-Based Marketing, with a long history in the games industry.
He appeared this afternoon at the Develop conference talking about 'gamification', and how game mechanics are being applied to lots of things that aren't games.
"In the path today, think of me as your pimp in the walk across the dark streets of gamification!" he said, by way of an introduction. He pointed out that the games industry is now nearly a $60 billion business, but claimed there's a risk of saturation.
"At some point, you start to wonder where does the rest of the growth come from?" he asked. He also highlighted the fact that in the last three years alone, mobile, casual and social gaming have all become multi-billion dollar industries on the periphery of the traditional games sector.
So what's next? Game thinking. "People who've grown up around these tremendously powerful games that we've built, and now those games are embedded in the frame through which they see the world around them."
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Examples of game thinking: Zichermann says marketers older than 40 think that 'rewards' mean giving people cash. But for game thinkers, rewards DON'T have to be cash. And also that "keeping score is normal - we used to think of keeping score as a form of bragging. It was extremely unacceptable to walk around saying 'I have this many friends, I have collected this many assets...'"
But Zichermann says the social graph on sites like Facebook, with their friend counts, have drastically rewritten those rules. This is where the notion of gamification - "Everything could be a little bit more fun, and could start taking on like a sponge aspects of games," he said.
Examples include Foursquare, the mobile app that uses simple game mechanics - a score and badges - and applies them to people's real-world movements.
"It's super-simple - so simple that many of you probably don't think about it as a game," he said. "And absolutely no formally trained games designers were involved, which is important."
Another example of gamification: services like Swoopo and Groupon, which turn online commerce into what are effectively social games. "Most activities are more fun with your friends," said Zichermann. "People prefer simple, more structured activities. And what Swoopo and Groupon have turned on their heads... is that people are prepared to put more effort in if they see the rewards as being worth it."
Zichermann also said that a whole generation of social games on Facebook are just evolved versions of the original 'Super Poke' app - simple social interactions with friends. Zynga's Farmville is "just Super Poke with a cow!" said Zichermann, while making it clear that he's not saying that as an insult.
"People wanna interact with other people in a lightweight, non-confrontational way," he said. "I think we are on the cusp of one of the greatest changes in the history of civilisation."
Is that over-egging a bit? Not according to Zichermann. He said brands including eBay, Nike, JP Morgan Chase, Volkswagen, United Airlines and NBC are actively exploring ways to gamify their products and services.
In JP Morgan Chase's example, there's a promotion called Chase Picks Up The Tab, where people spending money on their cards during the time of the promotion may randomly get a message informing them that the bank has paid for that transaction, not them.
Zichermann also talked about what's NOT gamification. "Fun comes first, and the interaction comes second," he said. It's not about making people "buy this thing, learn this tool". And also: "This really isn't about games... The critical thing here is not to compare any of the things happening in gamification with traditional capital-G Games," he said.
Which is a polite way of saying that games developers shouldn't get sniffy about this stuff not being 'proper' gaming. Zichermann said that the gamification trend is an opportunity for games developers, because any brand or company using game mechanics for a promotion or a service will need game designers to work on it.
He did warn developers off over-designing when launching a gamified service - of trying to turn it into a big immersive virtual world type thing. "Gamification is an opportunity to create trillions of dollars worth of happiness," he said.
Zichermann was asked about gamification in the long term - once people have power users who may tire of the initial mechanisms. "We're definitely going to have badge and point system saturation," he said, while saying that may be three years off - "sometime in 2013 we'll start to have real problems with people saying 'FUCK this, I can't deal with all this shit!' and they'll leave the social graph because they'll find the badging too intense!"
But he said that dealing with these issues is simply good game design - you don't design for the high-level users from day one, but you have it in mind for the long-term. He was then asked about the battle between privacy and marketing, which he admitted will be "really complicated", not least because gamers will willingly give up all sorts of information that has traditionally been taboo for marketers to ask for - "because they need a bigger farm!".
He said that the legislative framework is currently far behind the way people are using games and gamified services, but warned that it will catch up, in time. Will gamification affect the traditional games industry, because people won't want to play 'trad' games if everything else is a game?
"It's coming sooner than we think," said Zichermann. "The first games to feel the effect of that, frankly, are social games. If you like to work out on Nike+, that's probably more fun than Farmville..."
