I first watched this video a while ago, but it seems to be becoming more poignant. Carnegie Mellon University Professor, Jesse Schell of Schell Games dives into a world of game development that is emerging from the “Facebook Games” era.

If it’s an area you are interested in, then I recommend reading The Art of Game Design (Amazon US or on Amazon UK). The talk attracted a huge stream of comments. While you may or may not agree with Jesse’s hypothesis that everything ends up being a game to earn points – although some corporate work environments already feel like this – there is much food for thought in what he says.

The legendary Farmville app has achieved massive success, outgrowing even Facebook itself, but making a Farmville knock off isn’t easy. It’s not just a Facebook game – it’s leading a new business model. Games have become a part of the marketing mix for brands, and game design techniques are bleeding into everything from office software to employee compensation plans.

The intersection leads to unexpected things, and nearly all of them involve psychological tricks, migrating people from free gaming experiences, to being fully paid up customers. Club Penguin is one of my favourite examples. Their  “elastic velvet rope” (around a $350million proposition) enables children to play and explore their game world, all the time rewarding them and leading them into the paid monthly experience beyond the velvet rope, with the constant lure of ‘more things you can do’ in the paid for version. A little while back, it was Mafia Wars – a text based game on Facebook that used ‘real friends’ juxtaposed into a virtual domain, where users could trade cash for (virtual world) social advantage. All cunning stuff.

Games, and the ‘freemium” model in general, often work on the ‘sunk cost’ fallacy – the psychological bias that if you’ve spent time (or money) on something,  it must therefore be valuable. It’s a ploy that bridges gaming, virtuality, and reality. Games are no longer about escaping from reality, they are about breaking through it. Gilmore and Pine’s hypothesis, in the Experience Economy and Authenticity: What Consumers Really Want,  is that the most valuable thing about products today is authenticity. That might seem strange in the context of games, but we live in a world where ‘fake’ virtual worlds are almost as valuable as the real deal. The convergence and divergence of technology is blurring the domains (even if I’m not sure I agree with Jesse’s pocket theory, I think it is more about expansion and contraction). Pockets of time can be used for crowd sourcing, by making activities into games (interesting in the context of Orange’s mobile volunteering initiative).

The next revolution is all about sensors, think of things like the gyroscope in the iPhone 4, and tilt sensors that are now in most new mobile handsets. These allow games and reality to be further blended (see Augmented Reality). I hope we don’t degenerate into the ‘life as a game’ Jesse describes at the end, but you can already see the motivational tricks being used. From the Waitrose Charity Tokens Scheme, to business games, the techniques are already being used to shape human behaviour, and that’s before we factor in phones that can overlay real-world experiences with virtual ones.

I’ll be talking about this, and more at Chinwag Local in Twickenham on Wednesday September the 8th. If you are in the area and want to meet with other local business professionals, I hope you can come along!