This is why a range of industries
has turned to gamification or the use of gaming and game design principles to
better engage their own customers. Marketers are now applying gamification to
their activities to minimize customer churn. Rather than simply offering
coupons, spendable points and discounts, marketers are spicing up their loyalty
programs using new technologies to deliver engaging risk and reward
mechanics. Starbucks, for example, has an
established loyalty program that allows customers to earn better rewards the
bigger they spend. But beyond this, Starbucks has also introduced various
tech-driven campaigns over the years including mobile apps, QR codes and even
augmented reality to keep things fresh.
technology has been making some buzz as a complementary technology to games and
gamification. A blockchain’s ability to provide secure record-keeping and
facilitate transactions using crypto tokens makes it suitable for such use
cases. Various services are already finding interesting ways to marry gamification
and blockchain capabilities. Projects such as Sandblock, for instance, leverage smart contracts to power
loyalty program mechanics. The virtual game CryptoKitties also shows how blockchain technology can be used to
effectively assign ownership of digital items. Such projects also showcase how
blockchains are helping promote fairness and trust in gamified activities.
One of the common criticisms
against loyalty programs is that they’re mainly designed to maximize profit for
companies. Some, when closely scrutinized, actually have unfair
make it extremely difficult for participants to be fairly rewarded for their
efforts or for the amounts they spend. While it only makes sense for companies
to offer loyalty programs if they are sustainable, they should still provide
customers with acceptable reward rates.
Blockchain technology can
help prevent these issues through the transparency it provides. Smart contracts
can be used to keep track of the mechanics of a program or campaign. Since
these terms are transparent, it is easy to notice if companies are offering
absurd conditions. On the inverse, some unscrupulous customers may also seek to
game and abuse the system. Poorly designed gamified rules can easily be
manipulated by determined fraudsters, and thus, having transparent records
reveals which users are actually trying to throw the balance of the rewards
Sandblock, for example, provides
a blockchain protocol that handles rewards attribution and merchant rules for
rewards programs. Using the platform, merchants create their rewards program
rules on how their customers will be rewarded using their own branded crypto
tokens. Sandblock uses the Ethereum network as its
blockchain and a smart contracts platform, which means transactions and
agreements are transparent. This compels both merchants and customers to act in
The use of crypto tokens also
gives customers more flexibility with their loyalty points. Most loyalty
programs limit these points for exclusive use and redemption with their
respective brands. In contrast, crypto tokens can be mutually interchangeable
and may be exchanged for other crypto or even fiat currencies.
Virtual items are often
acquired as some form of reward from certain games and gamified activities. In
video games, for instance, items can be obtained by successfully completing tasks
or by defeating enemies. These virtual items may be made available to a player
or be tied to a particular account. However, “ownership” is determined mostly
by the game developers’ or publishers’ rules.
Since these items have some
form of utility within the games, many are willing to pay for these items.
Virtual items are estimated to be a market of around $15
sale of virtual items has become an underground economy for many gamers. Most
game developers and publishers prohibit the trading of virtual items for fiat
currencies as they consider this a violation of their terms of service.
Blockchain technology is
redefining the concept of virtual item ownership. The technology provides means
to create unique identifiers for virtual items and assigns ownership. Take the
case of CryptoKitties, a virtual game that allows users to own and take care of
virtual cats. Each of these virtual cats is distinct and even features unique
“DNA” that is validated through the blockchain. Ownership is also tracked using
Ethereum smart contracts. Each virtual cat can then be traded or sold for ether
tokens, giving gamers the incentive to nurture and breed more virtual cats.
digital marketplaces like DMarket and WAX
also seek to address issues in the growing virtual items market. Game developers
and publishers rarely have features that would allow the safe and secure trade
of virtual items within their platforms. These marketplaces use blockchains and
smart contracts that enable gamers to safely trade among themselves.
Trustworthy and Fair Mechanics
Games and gamification are
about engaging users through interesting rules and risk and rewards mechanisms.
Unfortunately, centralized authorities are inclined to create rules that often
favor them. Blockchains encourage participants to create and abide by fair
rules and establish equitable risk and rewards systems. The use of crypto
tokens even allows for rewards such as those from loyalty programs to have more
financial utility for customers. The proof of digital ownership even creates
more value for participants’ rewards. Participants can rest assured that
through such mechanisms, all parties benefit from gamified activities.