Driving Mobile App User Engagement through Gamification

Many mobile app providers offer their apps for free and base their business models on user engagement. However, declining app usage over time threatens user engagement and the ability of apps to create business value. To keep users engaged, app providers use gamification, i.e., they link their apps’ core, non-game activities to game elements (e.g., levels, points). Gamification extends traditional loyalty strategies that reward value-added activities by rewarding 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 user engagement significantly over and above value rewards, leading to a lift in business value, especially when users become closer 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, the marginal effect of game engagement on value-added engagement decreases. The authors discuss implications for gamifying reward architectures