The primary distinction between gamification and traditional incentive and rewards programs is that gamification engages people in a way that is meaningful to them.


 It’s not surprising that people collect points to take advantage of a free flight—in fact, it’s illogical to leave money on the table. The primary distinction between gamification and traditional incentive and rewards programs is that gamification engages people in a way that is meaningful to them.

Understanding this distinction can help organizations focus on what makes gamification such a powerful technique to engage a target audience.

Gamification, video games, and rewards programs are similar in a few ways:

They engage “players” voluntarily.

 They use game mechanics such as points and levels.

 They are interactive.

They incorporate progression to move players to the next level.

 But the differences are more important than the similarities. Video games, rewards programs, and gamification engage people on very different levels and they have entirely different purposes.

 Games primarily engage players on a whimsical level to entertain them.

 Rewards programs primarily engage players on a transactional level to compensate them.

Gamification engages players on an emotional level to motivate them.

Games have only one mission: to entertain the players. To achieve that, video games use elaborate story lines, graphics, and animation to create realistic experiences for players. The goal is to get players immersed in the game world and the role that they play in the game.

Rewards programs focus on developing higher value and repeated transactions with customers or on rewarding employees for achieving goals. The most common of these are airline, hotel, and retailer loyalty programs, but they also include employee incentive programs and other categories as well.

This doesn’t necessarily mean that there are hard lines between video games, gamification, and rewards programs. As we will see a little later, rewards programs do provide some incentives that engage people at an emotional level. Some gamification solutions have tangible rewards in the mix of incentives.

Serious games are games with a purpose, and they have been around for decades. This category of games mixes entertaining video game elements with educational material to make learning more fun.

The distinction is really the primary engagement model, incentive structure, and purpose. To understand and distinguish the primary purpose of gamification from video games and rewards programs, it is useful to follow the money. Video games, gamification, and rewards programs all cost money. Someone provides it,someone is playing it, and one of those two is paying for it. There is a value exchange. In video games, the player pays the video game developer for the entertainment value of the game. In rewards and incentive programs, the sponsor organization (airline, hotel, retailer, or employer) pays the player with tangible rewards for the value of repeat business (with customers) or increased productivity (with employees).

In gamification, the sponsor organization and the players have overlapping goals. Typically, the sponsor organization pays for the gamified solution and the players play for free. Because the goals are shared, the value is also shared between the players and the sponsor organization, and there is no flow of money or tangible rewards between the player and the sponsor organization. As we have seen, video games, gamification, and rewards programs have different purposes, engage people at different levels, and have different value exchanges. But because they all use game mechanics such as points, levels, and leaderboards, these shared characteristics have led people to conflate the three, and this confusion is the cause of many noisy debates.


 Rewards programs typically provide members with discounts and offers such as free flights or hotel stays for repeat business. While they are often called “loyalty programs,” perhaps a more appropriate name would be “kickback scheme,” especially if the intent is to influence the buying behaviors of people traveling on corporate expense accounts with personally redeemable rewards.

 Employees are given tangible rewards in return for some specific result, perhaps a trip to Hawaii for achieving a sales target or tickets to a football game for meeting a production goal. In these cases, employees are rewarded for achieving organizational goals with scant regard to whether the employee shares the goal. It’s not necessary for the employee to share the organizational goal. The employees have a different goal: winning the prize.