Why no-one will ever scale the gamification market accurately

May 2011

GIC has been continually scaling online games markets since the start of the last decade. We use a mixture of bottom-up and top-down methodology including lengthy and repeated company and investor interviews, extensive proprietary company and product databases, different types of company financial filings and benchmarking against other data sources. It is our belief that the gamification market will never accurately be scaled due to the following problems:

First, there's no good definition of what gamification is and it can blur at the edges into other online games markets, resulting in a risk of double-counting.

Secondly, many gamification projects have non-revenue generative objectives such as audience growth or enhancing brand engagement, the value of which is difficult if not impossible to quantify. A market scale would therefore not capture all gamification activity, nor are there softer metrics that would withstand robust analysis.

Thirdly, and most practically, even if we could agree a definition and exclude non-commercial gamification work, there are very real and insurmountable practical barriers to gathering accurate data from such a varied client base in so many different sectors (from Playboy to banking to software design to brushing your teeth and so on). Each client running a gamification project will drive revenue into / source spending from different budget lines (services, external comms, consumer marketing, internal comms, web development, games development, community management etc). Even listed companies only rarely release such expenditure and almost never to the level of detail where a gamification project could be identified and scaled.

Our method – very educated estimates based on hard data and a lot of legwork – could not be applied to gamification without Sisyphean effort and we contend no-one would be daft enough to try.

The only possible route would be to try to size a discrete sub-sector of gamification – the gamification services market (Bunchball et al) – which would give a partial picture, particularly if based solely on surveying companies. Survey-based market scaling can often be deeply unreliable if it’s not benchmarked against other data and the partiality of the sources must be robustly scrutinised. Since the gamification service companies are actively promoting how massive the market is going to be in order to persuade clients to buy their services, any data based on their market projections alone has to be seen as unreliable due to the lack of other benchmarking data, which does not exist.

All these factors combine to create a massive challenge for anyone wanting to scale the gamification market, and we cannot foresee a time that gamification will ever reliably be scaled beyond non-scientific fingers in the air (e.g. sub-$50m). Anything presenting itself as scientific market scaling should be questioned.

The same standards should be imposed on any analyst projections of the extent of gamification's penetration into multiple different markets. More than likely, such projections could be simply the opinion of an analyst based on little or no data.

Nick Gibson's article in April 2011's Develop describes how vain attempts to scale markets using surveys can be and why.