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Saturday, June 19, 2010

Improving Online Business Applications With Online Game Features

The success of online gaming sites has caused traditional online businesses to begin to speculate about the reasons for this success. Online businesses also want to see their online customers increase exponentially, lower their acquisition costs and get the most revenue they can out of their online customers. Entrepreneurs are off and running filling the void creating conferences and writing books on the subject of helping businesses integrate game features into traditional online business applications.

My experience running and building both online gaming and e-commerce business applications brought me to the realization a long time ago that game mechanics could easily be incorporated into standard online business applications to improve customer acquisition and retention. Traditional businesses such as the travel industry were earlier adopters of virtual currency and reward gaming mechanics to improve retention. Many other traditional businesses followed their lead with great success. The movement of traditional businesses to the online space has seen an extension of these gaming features expressed in online businesses. However, the adoption of gaming features to online properties stopped with the adaptation of tradition offline game features to online business applications.

Encouraged by the recent success of online gaming customer retention and acquisition numbers traditional online businesses are now looking to the online gaming community to help them integrate more gaming features into traditional online business models.

What is it about online games that make them so unique resulting in lower cost of acquisition numbers, high player numbers and improved player retention? What are game mechanics and why are online gaming applications taking over the social network application world leaving traditional business wondering what about us?

There are some fundamental features(mechanics) of gaming applications that appeal to people and encourage them to play online games and to "invite(viral)" other people to play with them. Individual game features have to be collectively integrated into an application to create the gaming "effect". Specific implementation of gaming features into an application do have a positive impact on the effectiveness of an application. However, the real benefit of adding game mechanics into an application are only realized when they are integrated into a cohesive interactive system.

The following are the key components of a robust online gaming business that traditional online businesses should be pondering and working to integrate into their applications.

Virtual Identity - Most online games allow a player to assume a unique identity associated with the gaming community. The identity is tied directly to the game and may have no correlation to an individuals physical identity. This allows a player to freely express themselves(with caveats) within the gaming community. Essentially, they can become something entirely different in the virtual world.

Virtual Economy - To make a gaming system work it has to be based on an economy/currency. The economy could be a traditional currency such as the dollar, euro or pound. It can also be a currency unique to the game or to a community of games. Facebook is now creating its own virtual economy/currency recognizing the success of online gaming economies within the Facebook environment.

Competition - People like to compete for the purpose of interacting with other players, to be recognized for achieving success by others and to receive rewards for their efforts. In many ways airline and credit card companies have laid the ground work for this with their point and reward systems. The missing link is in the absence of participants being recognized for their effort and giving them the ability to publicly compete to obtain these rewards.

Winning(Prizes) - Online gamers all are seeking to win something to reward them for their efforts. The prize could be nothing more then a virtual label, virtual good or the allocation of points. It could also be a high net worth item such as a car or a trip. The ultimate prize value has to have to be a high "value" in the context of the virtual game economy. Establishing a "value" in a virtual game economy is one of the big challenges. Game currency inflation can occur just as it does in the real world requiring a business to manage its currency allocation.

Recognition For Achievement - Gamers want to be recognized by others for their participation in a game. This could be as simple as a leader board entry or a message blast to other gamers in the community indicating the player has achieved certain milestones. To use the airline example, this is where they have fallen short. There is no collective awareness of how someone ranks against someone else in terms of point allocation and there is certainly no identification of these people on web sites to provide the individuals with the exposure to the rest of the airline online community.

The More The Merrier( Viral) - Games are inherently social. People want to play with other people and or be measured against other people. This is why online games are so popular in social networks. If a game is not a multiplayer game it does have to allow for the comparison of game play results between players. Online communities thrive by encouraging communication between players. Text messaging, Facebook communication, e-mails, tweets, chat, etc. are all options that can to be part of the viral communication mix.

Interesting(For Ever Changing) - Games can never be boring or tedious. The most popular games have an ever changing characteristic to them. These changes can be manifest by the entrance and exit of different players, the addition of new reward levels, adding more games or changing the game in a way that requires the gamer to engage in a new strategy to win or adding complexity to a game.

Skill Levels - Gamers like different skill levels. A good game has a low bar entry level skill requirement that let's new players enter the game and become familiar with it. The more a player participates in a game the better they become requiring the game to provide increasing levels of sophistication to keep the player engaged and interested. They gamer is constantly challenged but never discouraged. There is always a fallback level and a higher level to attain.

Players want to be recognized, ranked and recognized for their achievements. This recognition attracts other players at their skill level to engage with them in head on competition. These levels organically create sub-communities within the gaming environment allowing a player to "identify" and associate and compare themselves. Smaller groups can become support groups supplying players with tips and references.

MultiPlayer Games - Mulitplayer games can come in many different forms. Certainly poker and MMOG games such as World Of WarCraft directly engage players to compete with each other. These games are especially popular. Players like multiplayer games because they are inherently social, competitive, provide visibility for their achievement and offer a constantly changing experience as new players enter the game and the skill levels of players change.

Player Referrals - Online gamers like to encourage people in their physical world to join them in their virtual game world. Players also like to grow their virtual identities and there virtual community by inviting their virtual friends ans associated to join in.

Fun Factor - Most people find games to be a fun and enjoyable experience. The fun factor is a baseline experience that underlies all online games. The key to a successful online game is to determine how to make the game fun. All of the features mentioned contribute to the fun factor. The hard part is to figure out how to integrate all of the game mechanics into an application that clicks with the audience making it "really" fun to play. An online game could be released and have an immediate high fun factor coefficient (online poker). However, most online game properties require a series of iterations to get it right.

So how does an average online business such as a travel, e-commerce, tax return, financial services, social networking site, etc. integrate such features into their online property?

Player/Customer Profiling(characteristics) - This may sound obvious. However, one may be surprised at how little online businesses actually knows about their online visitors. Google Analytics does not tell you very much about an online visitor. All online communities have characteristics that dictate how that community prefers to interact and what it considers to be a fun and a rewarding experience. This is where business owners and team members should start.

Create a list of these key consumer characteristics and associate them with game mechanics. See where you have overlap. Pick the overlapped game mechanics and start the process of building those features into your business applications.

Introduce these features gradually into your online community. Offering key customers to become "elite" evaluators of your "new" and improved game feature set is a great way to start building your community and get good feedback. Offer a rewards to these early participants.

When a business has decided what game feature set is most appropriate for their community begin to introduce the features gradually. The initial experience has to be robust enough to engage the community but light enough so the company can back off on the feature set if it is not working or change it to accommodate feedback.

In Conclusion - Online gaming has taught us that there is something about online games that creates a buzz that ultimately results in high online customer acquisition and retention. It can also lead to high revenue per online customer if executed properly. We all can learn from successful and not so successful online game properties and integrate the best of breed into our traditional online business application.

"A Little Self Promotion: My company Gameinlane.com works with online game companies and traditional online businesses to develop games and to help businesses figure out what game mechanics will work best for their business. For more information or advice on Gameinlane services please contact Kevin Flood at kflood@gameinlane.com."

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