Class Realm
Class Realm's mascot, Sami the Samurai Yeti, on its website.

A FEW MONTHS ago, Ben Bertoli, a teacher at Danville Middle School in Indianapolis, was grappling with a class of unmotivated students when he decided to put his love of video games to work.

Drawing inspiration from his collection of over 400 Nintendo titles, Bertoli created ClassRealm, a system in which students create virtual avatars and gain experience points for answering questions correctly in class, completing extra assignments and helping classmates.

Although the rewards were mostly abstract, the results were real. Formerly reticent pupils immediately became eager to participate. When Bertoli offered extra points for a five-paragraph essay, 20 of his 29 students rushed to write it. And they clamored to fight in Friday duels, facing off to answer questions while Pokémon battle music blared.

Some of those kids just need a push in the right direction to get them going, Bertoli said.

ClassRealm, which Bertoli is now developing into a system for all teachers to use, is a promising example of a concept known as gamification -- the application of concepts from game mechanics (the theories that are part of the process and study of game design, like progression, prestige, competition and social feedback) to non-gaming environments to change user behavior.

In the pre-digital world, gamification took the form of marketing programs like frequent flier miles, loyalty programs and supermarket coupons, which reward spending with freebies and discounts. But the Internet has taken gamification into more interactive and innovative areas.

Games are the new normal, Al Gore, the former U.S. vice president and 2007 Nobel Peace Prize co-winner, said at a conference last June. Gore is in talks with developers to use gamification to educate people about the effects of climate change.

Typical of today's gamification apps is Foursquare, a mobile program that encourages users to explore their neighborhoods by checking in at various locations to earn points and badges that can be exchanged for, among other things, restaurant or retail discounts. Over 15 million people have signed up.

That user base pales against Zynga Inc.'s achievements. The developer of the uber-popular Facebook games Farmville and Mafia Wars has attracted over 240 million subscribers through a blend of fantasy worlds, interaction with other players and endless rewards.

If the analysts are right, these success stories are just the beginning. Gartner Inc., a Stamford, Conn., Internet research firm, said that by 2014, gamification is going to be as important as Facebook, eBay and will be for the sale of consumer goods. The Internet consultancy added that 70 percent of the largest 2,000 public companies will use gamification for everything from employee training to marketing.

These numbers may be understating gamification's true potential, supporters argue. In their view, people gravitate to a virtual life because they feel a sense of control that is absent in the chaos of the physical world. People like the defined goals, the potential for heroism and the chance to compete and win on a daily basis. In short, once people are drawn to a game, they are more motivated, focused and happy inside the digital environment than outside.

Games are showing us exactly what we want out of life: more satisfying work, better hope of success, stronger social connectivity, and the chance to be a part of something bigger than ourselves, writes game designer Jane McGonigal in her book Reality Is Broken, a manifesto for using games to change the world.

The challenge -- and opportunity - is channeling the passion and satisfaction of games into solving real problems.

RAJAT PAHARIA WAS one of gamification's first evangelists. In 2005, the Stanford-educated engineer founded the company Bunchball Inc., hoping to convince social media sites like Facebook and MySpace to add games to attract more users. During these efforts, Paharia was inspired by the top site in his market, Electronic Arts' He was impressed by the site's permanent leaderboards, points and achievements -- key elements of gamification -- and how they satisfied players' cravings for tangible accomplishments.

Since then, Paharia said, I've been fascinated by this idea of motivation.

Bunchball became one of the first gamification companies, and it gained backing from Adobe Systems Inc. and Granite Ventures LLC. Later, Northport Investments, Correlation Ventures and Triangle Peak Partners Inc. added funding, bringing Bunchball's total infusion of venture capital to $17.5 million.

Although he had cash for development projects, Parahia could find few interested customers. Most businesses at the time were focused on streaming video and social media. Games were seen as juvenile, a platform for geeks.

If you're the only guy dancing in the middle of the dance floor, everyone thinks you're nuts, said Paharia.

The breakthrough came in 2007, when NBC hired Bunchball to build Dunder Mifflin Infinity, a social network for the fictional paper company in The Office. Users could join as employees, earn currency and decorate their virtual desks. Soon after, Paharia registered the domain name for $9. Bunchball says it now has over 100 clients and over 70 million users across all of its systems.

Bunchball's projects go beyond commercial interests. HopeLab, a California non-profit organization focused on teenage health, hired BunchBall to create an activity monitor that rewards exercising with points that can be traded in for virtual goods and Target gift cards. Teens participating in the program increased their physical activity by 130 percent in a month, Paharia said.

One of Bunchball's largest clients is early investor Adobe Systems. The software giant was concerned that users were overwhelmed by the interface of its Photoshop image-editing program and, as a result, switching to more lightweight alternatives. So it hired Paharia's company to create a gamification system, LevelUp, that could serve as a training guide.

The application walks users through a dozen simple photograph manipulation tasks, such as whitening teeth and removing red eye, and as people attain these skills they are awarded points. For every 400 points earned, users are entered into a monthly raffle for the Adobe Creative Suite Master Collection, which retails for $2,600.

The value of a customer is not just how much they spend, said Paharia, but in their engagement to a product. Engagement drives loyalty and gamification drives engagement, Paharia believes.

Unlike the early years, Bunchball no longer has the gamification market to itself.

One rival, Menlo Park, Calif.-based Badgeville, projects $10 million to $20 million in sales this year, and it plans to expand its staff from 60 to 100. Its work includes Samsung Nation for the South Korean electronics giant, a loyalty program that fuses marketing with social media.

The system is a way to get passive visitors active and engaged fanatics recognized, said Badgeville CEO Kris Duggan. Users have the opportunity to win products for spending time on the company's website and for sharing product pages and equipment reviews and experiences with their online friends. Beyond the material prizes, users with the most points are listed in a front page leaderboard.

Creating communities around corporations with the sole purpose of driving more sales will ultimately appeal to only a limited number of users. So for some gamification companies, a more profitable scenario may be in developing digital ecosystems that people can join for their own personal gain; in other words, a virtual world linked to improvement of one sort or another and not to a product.

That's the concept behind a New York-based gamification start-up called Fitocracy, which has developed an app designed to change the way people exercise. Users enter their workout routines into the company's website and earn points and new levels based on specific achievements. The system has quests like run one mile in under 12 minutes or do three sets of barbell bench presses in a week to push participants to try new exercises for bonus points. An enthusiastic crowd of over 275,000 users on the website offers training advice and encouragement by giving props, the site's version of Facebook's likes.

Fitness is inherently social, said Richard Talens, Fitocracy's co-founder and chief technology officer, who met Fitocracy CEO Brian Wang at the University of Pennsylvania, where they realized they both had in common a passion for weight training.

To inspire new users, Talens has two pictures of himself on his profile. On the left, a younger, chubbier Talens grins in 2002. On the right, a November 2008 image shows off Talen's six-pack abs and bulging biceps and thighs at a bodybuilding competition. Fitocracy's goal is to empower users to make their ideal selves -- probably close to how Talens looks today -- a reality.

Fitocracy, which has raised over $500,000 from investors and seed funds, hasn't settled on a revenue model yet. The company has experimented with a $5 per month premium service, known as Fitocracy Hero, which unlocks additional features, including the ability to copy other people's workouts and new game levels required to reach in order to access enhanced exercise routines.

Another potential growth area is corporate branding. Last year, Red Bull sponsored a contest in which the energy drink company challenged Fitocracy users to earn the most points in the month, awarding the top player a trip to train in Red Bull's headquarters. Other prizes included a one-year gym membership and a fitness resolution kit, which included Red Bull products.

SOME PURISTS SEE gamification and its points, badges, achievements and tangible rewards as a corruption of game design.

Ian Bogost, a professor at Georgia Institute of Technology and a founder of game developer Persuasive Games LLC, calls gamification exploitationware, claiming it exists solely to wring profits out of users and promote unworthy causes, rather than create knowledge or new skills.

Everything that happens online has been imbued with this attitude of maximizing figures and measuring metrics, rather than [to promote] values and goals, he said.

He has firsthand experience with the power of mindless satisfaction. Although it started out as a parody, his most popular game was 2010's Cow Clicker, which embraced the most toxic aspects of social gaming: repetition, social spamming and meaningless tasks. The premise was simple: players could click their cow every six hours, earning mooney currency that could be used to buy more cows with different appearances

The game exploded, attracting 56,000 users at its peak, and sending Bogost scrambling to quickly create additional cow designs to satisfy his audience. Somehow, his attempt to ridicule the phenomenon of popular social gaming applications became a hit among social gamers.

Ultimately, Bogost abandoned the project, using a Cowpocalypse to remove all of the cows. But users can still mindlessly click the patch of grass where their cows used to stand.

Like Cow Clicker, many gamification systems lack a key element of great game design, said Joshua Fouts, executive director of the technology advocacy group Science House Foundation: storytelling. The best games -- for that matter, the best works of art -- convey large ideas, provoke emotion and connect the user closely to the unique world they present; they are not focused on the single-minded pursuit of winning badges or gaining points, Fouts added: We're forgetting why people play games in the first place.

But Duggan, the CEO of Badgeville, said that naysayers are simply being elitist.

I think the definition of elitism is 'you can't have this, it's reserved for us,' he said.

What's the real objection? Duggan said. We've proven it works.

Roland Li previously wrote about competitive gaming in January.