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An Introduction

to Gamification
April, 2011

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417
It’s Going to Be Big (Maybe)

 “As Social was the last five years; Gamification


will be the next five years.”
 By 2015, 50% of companies that manage
innovation and research will use gamification to
drive innovation and engagement
 Jane McGonigal (Reality is Broken) says WOW
players have spent 5.93 billion years solving
virtual problems. Imagine if you could harness
that time and effort solving real problems

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


So What the Heck is Gamification?

 “Gamification” describes the broad trend of


using game play mechanics for non-game
applications in order to encourage people to
adopt applications or engage in desired
behaviors.
 The technique can encourage people to
perform chores that they ordinarily consider
boring, such as completing surveys, employee
performance, training, remembering to take
medicine, shopping or social change.

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Gamification Assumes Status > Cash

 Gabe Zichermann, a Gamification evangelist,


asserts that people respond to rewards in the
following order:
– Status
– Access
– Power
– Stuff
 Zichermann says that “cash isn't that good of a
reward. Status is a fantastic motivator for
getting people to do stuff."

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


What Does That Mean?

 In its simplest form, it’s about loyalty and


engagement:
– Leaderboards
– Badges
– Levels
– Being Mayor
– Embedding Games
– Progress Bars
– Virtual Points/Virtual Currencies
– Loyalty Programs

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


This Isn’t New

 We’ve had this for a long time:


– Frequent Flyer Miles
– Frequent Shopper Cards
 We’ve been engaging in it recently without
calling it Gamification
– Foursquare and “Check-Ins”
– Wii Fit
– Progress Bars in Social Media Profiles

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Categories of Gamification

 Consumer Engagement (using game


mechanics to draw consumer eyeballs and sell
more goods and services)
 Employee Incentives (using game mechanics
for more employee productivity or to
encourage employees to go through training,
etc.)
 Social Change (using game mechanics to work
social change.

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Examples of Gamification of Social Change

 U.K.'s Department for Work and Pensions Idea


Street
 World Bank: http://www.urgentevoke.com/
 U.S. military's "America's Army" video-game
recruiting tool

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Idea Street

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Idea Street

 Idea Street is an innovation game created by UK Department


of Work and Pensions to decentralize innovation and
generate ideas from its 120,000 people across the
organization.
 Idea Street is a social collaboration platform with the addition
of game mechanics, including points, leader boards and a
"buzz index."
 Within the first 18 months, the project had around four
thousand users, generated 1,400 ideas, 63 of which have
been implemented within the Department.

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Gamification Advantages

 Accelerated feedback cycles. In the real world, feedback loops are


slow (e.g., annual performance appraisals) with long periods
between milestones. Gamification increases the velocity of
feedback loops to maintain engagement.
 Clear goals and rules of play. In the real world, where goals are fuzzy
and rules selectively applied, gamification provides clear goals and
well-defined rules of play to ensure players feel empowered to
achieve goals.
 A compelling narrative. While real-world activities are rarely
compelling, gamification builds a narrative that engages players to
participate and achieve the goals of the activity.
 Tasks that are challenging but achievable. While there is no shortage
of challenges in the real world, they tend to be large and long-term.
Gamification provides many short-term, achievable goals to
maintain engagement.

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Risks of Gamification

 Poor execution
– It’s boring, it’s incompatible with your goal, etc. As a result,
at best it distracts your user; at worst it damages your
brand
 Mismanaging engagement
– In the “social” era, everyone believes that he or she is a
part owner of brands and content and they believe they
have a vested interest in the direction of the brand or
content
– And every user engaged through gamification has a free
non-legal remedy if the engagement was mismanaged.
 Legal risks

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Legal Issues

 Ownership
 Privacy
 Endorsement Guidelines
 Virtual Currency/Gift Card Rules
 False Advertising
 Brand Risks
 Alternative Reality Games; Viral Marketing Issues

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


IP and Ownership Issues

 Most gamification is handled through consultants and small


specialty developers.
 Is it established who owns what in the development process?
– Are there work for hire and invention agreements?
– Are there ownership arrangements with consultants and other
non-employees?
– Are you using open source? Creative Commons? Participating in
any collaborative community?
 Do the underlying technology and agency agreements give
the parties the rights they need?
 Have you thought about reuse of the project? Does the
gamification vendor and the social change client have the
same goals in mind?

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Virtual Currency/Gift Cards/ Contests and Sweepstakes

 Are the incentives/rewards that you offer


convertible into real goods and, therefore, run
afoul of virtual currency regulations
 Are the incentives/rewards effectively gift cards
and, therefore, run afoul of state gift card rules
 Are the games structured in a way so that they
are a legal contest or sweepstakes?

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


“Engagement” Has to Comply With Advertising Law

 Gamification that focuses on “engagement”


with customers needs to comply with the
standard advertising rules.
– Can’t be false or misleading
– Can’t make unsubstantiated claims
– Can’t misrepresent the capabilities of the product

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Be Particularly Careful Of…

 Targeted/behaviorial advertising as part of gamification


– Collecting data based on gamification activity in order to deliver
advertising intended to appeal to that individual
– The next wave, but also the area that consumers are squeamish about
and regulators are thinking about
– Expect further regulatory and legislative activity
 Social media, “word of mouth” and other consumer-based
marketing methods
– Regulatory and consumer concern about disclosure of relationships
between advertisers and “real people” who promote the products
– Applicability of unexpected legal frameworks on gamification projects
(e.g. alternative reality games)
 The next frontiers
– Location privacy

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


FTC Endorsement and Testimonial Guidelines

 The key here is not to get “cute”; the problem is that a lot of
gamification is “cute.” It’s viral, its non-obvious, etc.
 FTC is concerned about transparent endorsements
 Any blogger or endorser has to reveal any benefits he or she
received in exchange for promotional posting, reviews, etc.
 Endorsements have to be honest and cannot be deceptive
 Both blogger and advertiser can have liability
 Advertiser needs a policy and some minimum enforcement

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Employment Issues

 Gamification strategies with employees may run afoul of


employment laws.
 Are you monitoring off duty activity and making termination
decisions based information obtained through gamification?
 How are you using the information gained through the
gamification process
 NLRB Case re firing employee for employee post regarding
employer on Facebook (NLRB believes that FB is the new
water cooler and that posts are protected comments on
“working conditions”)
 Does using gamification for hiring decisions create a disparate
treatment issue?

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Privacy

 Gamification offer providers an opportunity to


collect highly detailed information about their
users.
 No comprehensive privacy law in the United
States
 Tradition in the United States is that the data
collector, not the data subject owns and
controls the data
 And with consent, all things are possible…

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


So, What’s the Problem?

 Consumer Backlash; Unpredictable Consumers


 Privacy Policies; Privacy Defaults
 Proper Consents for Sale of Information
 FTC Action; Consumer Protection Issues
 Invasion of Privacy Claims
 International Issues (Are you collecting information from non-
US users?)
 Special Issues
– Corporate Issues and Establishing Corporate Policies
– Kids
– Location Based Services

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Gamification of Sensitive Data

 Is the game involved in financial services (e.g.


encouraging savings), health care (e.g. pill
reminders), or education (optimizing
classwork)?
 If so, you probably have additional privacy
burdens because you’re handling sensitive
data.

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


Data Security

 Gamification may involve broader collection of


information from end users that could create security
obligations.
 Consumers are becoming more sensitized to companies’
handling of their data
 Operation
– Where are your servers located?
– Do you have a data breach plan?
– Have you audited partners’ security?

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417
Kraig L. Marini Baker
kraigbaker@dwt.com
206.757.8007
@bakek

© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417


© 2011 Davis Wright Tremaine LLP. All rights reserved. 877.398.8417