The Wall Street Journal took advantage of the SXSW Conference last year to interview several top tier VC firms to get their perspective on the trend:
MAHA IBRAHIM, GENERAL PARTNER AT CANAAN PARTNERS (Bio)
Is gamification an industry?
We see gamification as an emerging trend that will be used by many different industries. In a similar way that data transformed advertising and entertainment, gamification has the potential to transform industries such as e-commerce, education, health care and finance.
The data services industry developed along with companies such as Omniture, and there will be an industry developed around gamification. There will also be companies that tightly couple their business model with gamification to build large businesses in their respective industries as Google and Facebook have used data in the advertising industry.
Is gamification as big as social media, mobile apps or the cloud?
The potential for gamification is quite large. Since it can be used by many different industries, its potential is far-reaching like social, mobile and cloud. With our investment in Kabam, which designs highly immersive social games, we have seen a growing acceptance of consumers to engage with game dynamics. Social and mobile games will continue to increase consumer adoption and fuel gamification in an online world where any product or service can easily incorporate game dynamics. How big gamification ultimately will be is dependent upon innovative companies to unlock this potential, like Facebook, Apple and Amazon have.
JOHN FRANKEL, FOUNDER AT FF VENTURE
CAPITAL (Bio)
What is gamification?
Making the impersonal personal. Gamification is all about making people care.
Is it a standalone industry?
No. It is an approach to solving a problem. The best classic example is the “Member Since” feature on AmEx cards. The only person that knows or cares about this is the cardholder, and they care very much about it. It stops you from canceling your card, and it makes you proud. You could call that silly, but it works in a statistically significant number of cases. Gamification today is much more sophisticated and responsive, but the core principles that make it effective remain the same.
Is it as big as social media, mobile apps or the cloud?
No, but technology is allowing us to easily add gamification to many products and services.
What is gamification?
Gamification is a simple tool to incentivize users to behave according to the rules and needs of the business through rewards and competition.
Is it a standalone industry?
Absolutely not. It is a tool. That’s not to say isn’t important. I think gamification is the single most important tool that has allowed the growth of online business. At its base it builds on our desire for recognition and reputation. The reason that eBay has a 2% default rate is we are incentivized to maintain our star rating/reputation.
One other thing that is interesting about gamification is that not only does it incentivize users but it keeps the company honest too. Once a business establishes the rules of the game, it has to stick to them.
What is gamification?
Using game theory and dynamics to encourage engagement.
Is it a standalone industry?
No. To us, it is a tactic that can be applied to many different industries.
What is gamification?
“Productization” of the human spirit to compete and win.
Is it a standalone industry?
No. Gamification is an important component that can add tremendous value to a broad range of products from sales-focused products to social gaming products, and many more.
But is the gamification space able to support many economically viable companies specifically focused on gamifying other products, create thousands of jobs and hundreds of millions of dollars in revenue? No.
Is gamification a standalone industry?
There will be and are firms (both product and service) that will grow to help other companies better integrate gamification into their products. While I think they can grow to nice businesses I’m not sure it will grow out of a niche industry.
Is it as big as social media, mobile apps or the cloud?
No it is not, these are tools that plug in to other products to make them better. I don’t see them being standalone products at any point–that industry already exists, gaming.
Interviews from the article "With SXSW Buzzing About Gamification, Venture Investors Weigh In"
