Abstract

Many mobile app providers offer their apps for free and base their business models on user engagement. However, declining app usage over time threatens the ability of apps to add business value. To keep users engaged, app providers use gamification, i.e., they use game elements (e.g., levels, points) in their non-game apps. Complementing traditional loyalty strategies that reward value-added activities (e.g., purchases) through value rewards, gamification rewards ongoing engagement through game elements. Thus, reward architectures of many apps have become hybrid, with value- and game-reward pursuit simultaneously driving engagement. However, it is unclear to what extent gamification helps to drive user engagement and add business value. To address this question, the authors study unique data from a gamified market research app comprising daily individual-level app usage observations of 18,952 users. The findings show that game rewards increase engagement significantly over and above value rewards, leading to a lift in business value, especially when users are in closer proximity to both types of rewards. However, the analysis also shows a dark side of gamification: when users enter a state of flow in the game, game engagement has a weaker effect on value-added engagement. The authors discuss implications for gamified reward architectures.

https://doi.org/10.1177/00222437241275927